By 2023, Social Security Administration beneficiaries will not only receive higher Cost of Living Adjustment (COLA) checks, which were 8.7%, but also they will need to earn more cash to earn the credits they need to retire at some point in their lives.
This change means that now, starting in 2023, a Social Security credit will be worth $1,640 and not $1,510, as stipulated for the year 2022. Work credits are “building blocks” that the agency uses to find out if you have worked enough to qualify for Social Security benefits.
If you stop working before you have the credits needed to qualify for benefits, all credits earned up to that point will remain on your record. Then, once you go back to work, you can add more credits to the ones you already had, so that you achieve your eligibility.
These 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. As you can see, it is very difficult to obtain these credits, It’s not like you accumulate a large number of credits in a short time.
In this sense, the amount of credits necessary to obtain your retirement is changing. So, by 2023, you must earn $1,640 to earn one Social Security or Medicare credit and $6,560 to earn the maximum of four credits in a year. No matter how high your income is, you will not be able to earn more than four credits in a year.
According to the Social Security Administration (SSA), in order for a person to retire, they must accumulate a minimum of 40 credits. The credits are only to give way to the people for the eligibility but it does not imply how much money seniors will receive as their benefits.
What will determine the amount that will be obtained during retirement will depend on the years worked and the income obtained during these years.