What Is the Social Security Special Minimum Benefit?
The Social Security special minimum benefit is a program that was enacted in 1972 in order to provide benefits to those who earn a low wage. It provides a certain primary insurance amount, or PIA, from the government for low-earning workers, which is used to calculate your monthly payments. Unlike regular Social Security, which pays out retirement benefits according to your past income, special minimum benefits are calculated based on how many years you’ve worked.
Under the special minimum benefit, the lowest minimum primary insurance amount you can qualify for in 2023, with at least 11 years of work, is $49.40 per month. The full minimum primary insurance amount, which you can qualify for with at least 30 years of work, is $1,033.50 per month.
But the monthly amount you’ll actually receive if you qualify for this benefit varies based on when you file for Social Security retirement benefits:
You’ll receive less if you file early. You can file for benefits starting at age 62, but the amount will be reduced if you file before full retirement age, which is 67 for those born after 1960 (and a little lower for those born before 1960).
You’ll receive 100% at full retirement age or later. Unlike with regular retirement benefits, you won’t receive a higher payout if you file past full retirement age, the Social Security Administration confirms.
Who receives the special minimum Social Security benefit?
To qualify for the special minimum Social Security benefit, you need to have worked at least 11 years while earning at least a certain amount of taxable income. In 2023, that minimum income threshold is $17,820.
The benefit caps out at 30 years of work, at which time you’ll qualify for the full special minimum as the primary insurance amount, which is $1,033.50 per month in 2023. The total monthly benefit will be reduced if you file early. You won’t receive a larger benefit if you file past full retirement age.
Note that you’ll receive the higher of two benefits when you retire: either the special minimum benefit or regular Social Security retirement benefits. You can’t receive both payments at the same time.
As wages have increased, the number of people taking advantage of the special minimum benefit has dwindled over the years. In the early 1990s, about 200,000 people took advantage of this program, according to the Social Security Administration. In 2022, that number has dropped below 23,000.
What factors affect your benefit amount?
If you qualify for the special minimum, there are two main factors that affect your monthly payout:
How long you worked. The number of years that you work directly affects the income that you’ll receive. You’re eligible for the prorated special minimum benefit after just 11 years of work, but sticking it out for a full 30 years will net you the highest monthly payments possible.
When you file for benefits. The monthly payouts for your retirement benefits will be lower if you file as soon as you’re eligible at age 62. The full retirement age for those born after 1960 is 67, though it’s a little lower if you were born earlier.
If you choose to retire at 62 and start receiving your benefits, you’ll be getting about 30% less than if you waited until you were 67.
Though filing early can result in a lower monthly payout, doing so could be worth it in some situations, such as if you’re struggling with expenses and need the extra money.
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