Social Security is a term just about everyone knows off the top of their head. From the very first paycheck you earn, you start paying into Social Security. That’s why you should familiarize yourself with common terms related to Social Security.
Social Security credits are earned as you work. They help you receive benefits should you ever need them. If you were born after 1929, you need to accrue 40 credits during your career in order to receive benefits when you retire. You can only accrue a maximum of four credits per year of work.
Delayed retirement credits can be accrued if you wait to file for retirement until after your full retirement age. If you accrue these added credits it will help to boost your retirement benefits. You will receive an eight percent increase in payments for each year you wait to file for retirement benefits.
The cost-of-living-adjustment, or COLA, is used to help those retired retain their ability to purchase items despite inflation. The COLA ensures that a person’s retirement benefit increase from year to year if there are fluctuations in the Consumer Price Index.
AIME is short for average indexed monthly earnings. This is the calculation of the amount of payments you will receive monthly. The amount is based on your highest earnings from 35 years of employment. The earnings are adjusted to match inflation so they don’t drop in value.
Do you need assistance filing for Social Security disability benefits or filing an appeal after being denied benefits? An experienced Social Security disability attorney in Indianapolis can help you with your case.
Source: USA Today, “Confused? 10 Social Security terms you need to understand,” Maurie Backman, Nov. 10, 2017