Four Terms You Need to Know About Social Security
The Plain Writing Act of 2010 requires federal agencies to communicate information clearly in a way “the public can understand and use.” The Social Security Administration (SSA) is committed to doing its part to explain its services and benefits in easy-to-understand, plain language.
An SSA blog post identifies four terms everyone needs to know:
COLA — This stands for “Cost-of-Living Adjustment.” COLAs allow Social Security benefits to keep pace with inflation. Most years, your monthly benefit amount will get a COLA, which usually means extra money.
Credits — While working, you earn credits (previously called “Quarters of Coverage”) that count toward your eligibility for future Social Security benefits. You can earn a maximum of four credits each year. Most people need 40 credits to qualify for benefits.
Earnings Record — This is the chronological history of the amount of money you earned each year during your working lifetime. Your credits remain on your Social Security earnings record even when you change jobs or have no earnings for a period of time.
FICA — You’ve probably seen these letters on your paycheck. FICA stands for “Federal Insurance Contributions Act.” It’s the tax withheld from your wages that funds Social Security.
The Seniors Trust is committed to improving the well-being of older Americans. We are doing that financially by encouraging lawmakers to enact the Social Security Expansion Act. This landmark piece of legislation will give retirees an immediate increase of about $200 a month in benefits, a fair annual COLA, increased minimum benefits, and ensure the long-term solvency of the Social Security program.
