Learn About Retirement and Disability Programs

Understanding Social Security Retirement Benefits

Social Security retirement benefits form one of the largest income sources for older Americans. As of 2024, about 48 million people receive Social Security benefits, with the average monthly payment around $1,907 for retired workers. This program has been operating since 1935 and remains a foundational part of retirement planning for millions of households.

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The Social Security system works through payroll taxes. Workers and employers each contribute 6.2% of wages to the program. Self-employed individuals pay 12.4% total. These contributions create a record of earnings that determines future benefit amounts. The more you earn during your working years, the higher your potential benefits will be.

People can begin receiving Social Security retirement benefits at age 62, though the amount increases if you wait longer. At full retirement age—which ranges from 66 to 67 depending on birth year—you receive your standard benefit amount. If you delay claiming until age 70, your monthly benefit increases by approximately 8% per year. For example, someone with a $2,000 monthly benefit at age 67 would receive about $2,640 per month if they wait until age 70.

Understanding your earning record is important because Social Security bases benefits on your highest 35 years of earnings. If you worked fewer than 35 years, they count zero-earning years in the calculation, which lowers your benefit amount. You can create a personal account on Social Security's website to view your earnings history and get an estimate of your future benefits based on different claiming ages.

Practical takeaway: Review your Social Security earnings record at least once every few years to catch any errors. Note that waiting until 70 to claim provides substantially higher monthly payments, but claiming at 62 means you receive benefits for a longer total period—a tradeoff worth understanding based on your personal situation.

Social Security Disability Insurance (SSDI) and How It Works

Social Security Disability Insurance provides monthly income to workers who cannot work due to a severe medical condition expected to last at least 12 months or result in death. As of 2024, approximately 8 million people receive SSDI benefits, with an average monthly payment of about $1,550. Unlike retirement benefits, SSDI can begin at any age if the medical criteria are met and you have sufficient work history.

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SSDI requires a work history to receive benefits. Specifically, you must have earned enough work credits through payroll taxes. The number of credits needed depends on your age at the time of disability. Younger workers need fewer credits than older workers. For example, a 24-year-old worker needs 12 credits (approximately 3 years of work), while a 55-year-old needs 35 credits (approximately 8.75 years of work). Credits are earned by working and paying Social Security taxes, with a maximum of 4 credits earned per year.

The medical review process for SSDI involves multiple steps. Social Security examiners review your medical records, test results, and doctor's statements to determine if your condition is severe enough to prevent work. They use a detailed listing of impairments—called the Blue Book—that describes conditions Social Security considers disabling. These conditions include cancer, heart disease, mental health disorders, spinal cord injuries, and many others. The review process typically takes 3 to 6 months, though some cases take longer.

An important feature of SSDI is the work incentive program. People receiving SSDI can work and earn a certain amount of money (the substantial gainful activity limit, currently $1,470 per month) while still receiving benefits. This allows people with disabilities to test their ability to work without immediately losing their benefits. In 2024, if you earn more than this amount, benefits are suspended, but you can resume them if your earnings drop back below the limit.

Practical takeaway: If you are unable to work due to a medical condition, gather comprehensive medical documentation from your healthcare providers now. Documentation that clearly describes your condition, how it limits your ability to work, and its expected duration strengthens any consideration of SSDI. Keep copies of all medical records, test results, and doctor's statements in one organized folder.

Supplemental Security Income (SSI) and Resource Limits

Supplemental Security Income provides cash payments to people with low income and limited resources who are age 65 or older, blind, or disabled. Unlike Social Security benefits, which are based on work history, SSI is a needs-based program funded by general tax revenue. As of 2024, the average SSI payment is approximately $943 per month for individuals and $1,415 for couples. About 7 million people receive SSI benefits.

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SSI has strict income and resource limits. As of 2024, a single person can have no more than $943 in monthly income and $2,000 in countable resources. For couples, the limits are $1,415 in monthly income and $3,000 in countable resources. Income includes money from wages, pensions, and other sources. However, certain types of income are not counted, including the first $65 of monthly earnings, food stamps, and some housing assistance.

Resources include things you own that can be converted to cash, such as bank accounts, stocks, and vehicles. However, some resources are not counted. Your primary home and the land it sits on do not count, regardless of value. Your vehicle generally does not count, even if it is worth more than $2,000. Personal household items, clothing, and burial plots are also excluded. This distinction matters because someone could own a home worth $500,000 and still qualify for SSI, as long as other income and resource limits are met.

The SSI program includes protection against sudden loss of benefits due to modest increases in income or resources. Called the "Plan to Achieve Self-Support," this work incentive allows people receiving SSI to set goals related to employment, education, or business ownership while keeping their benefits even if their income or resources temporarily exceed the limits. Someone pursuing job training, for example, could exceed resource limits while saving for education expenses without losing SSI.

Practical takeaway: If you think you might qualify for SSI, create a detailed list of your current income (including any part-time work, pensions, or family support) and resources (bank balances, investments, vehicles). Compare these to current limits. Keep in mind that limits adjust annually for inflation, usually in January. If you are close to the limits, ask about work incentive programs that might allow you to pursue employment or education.

Veterans Disability Benefits and Survivor Benefits

Veterans with service-connected disabilities may receive monthly disability compensation from the Department of Veterans Affairs (VA). This program is separate from Social Security and is based on military service and disability ratings rather than work history or income. Approximately 5.7 million veterans receive VA disability compensation, with average monthly payments ranging from $200 to over $4,000 depending on disability rating and family situation.

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The VA assigns disability ratings from 0% to 100% in 10% increments. A 10% rating means the disability has minimal impact on work and daily life, while a 100% rating indicates the veteran cannot work due to their service-connected condition. Monthly payments increase with higher ratings. For example, in 2024, a single veteran with a 50% disability rating receives approximately $1,267 per month, while a 100% rating provides about $4,094 monthly. If you have dependents, additional amounts are added to your payment.

The VA disability determination process involves submitting a claim with military records and medical evidence showing that your condition is connected to your service. The VA then schedules an examination, typically with a VA doctor or contract examiner, who evaluates your condition and provides a report. The VA uses this information to assign a disability rating. The process typically takes 3 to 6 months, though some cases are more complex. Veterans can appeal if they disagree with the rating assigned.

Survivors of deceased veterans may also receive benefits. If a veteran dies from a service-connected condition, or if a veteran with a 100% disability rating dies from any cause, surviving spouses and children may receive Dependency and Indemnity Compensation (DIC). As of 2024, a surviving spouse receives approximately $1,687 per month, with additional amounts for each child. These benefits continue as long as the survivor does not remarry before age 60 (for widow/widower benefits) and children receive benefits until age 19 or 23 if attending school full-time.