The Social Security Administration has announced changes for 2023, including the value of one work credit rising from $1,510 to $1,640.
According to the SSA, work credits are “building blocks” the agency uses to find out whether you have worked long enough to qualify for Social Security benefits. If you stop working before earning enough credits to qualify for benefits, any credits you’ve earned remain on your record. This means that if you choose to go back to work, you can add more to your existing credits to qualify.
Credits are based on your income during the year. If you work and pay Social Security taxes, you can earn up to four credits per year.
For 2023, you must earn $1,640 to get one Social Security or Medicare credit and $6,560 to get the maximum of four credits. No matter how high your earnings are for the year, you cannot earn more than four credits in a single year.
To qualify for Social Security benefits, you must earn at least 40 credits. However, the number of credits you earn does not affect the amount of benefits you receive. Your average earnings during your work years determine your monthly Social Security payment amount once you begin to collect benefits.
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This article originally appeared on GOBankingRates.com: Social Security Raises Work Credit Amount to $1,640 — How It Could Impact Your Retirement Benefits