Most people have heard that you need 40 Social Security credits to receive benefits in the U.S.

While 40 credits may seem like a significant requirement, it's actually not that complicated. It simply means you need to have worked and paid taxes in the U.S. for at least 10 years. The issue arises when someone has not accumulated all 40 credits.

Those who immigrated to the U.S. after age 50, had some breaks in employment, or reported low income while self-employed may find that they are short on credits more often than expected.

At this point, it's easy to feel anxious and think, "Oh, am I not going to receive Social Security?" But there's no need to jump to conclusions.

The most practical solution is to work a little longer. You can earn up to 4 credits per year, and it doesn't have to be full-time work.

As long as you earn above a certain amount and pay Social Security taxes, you will accumulate credits. Whether part-time or simple jobs, the key is whether you reported your income correctly and paid your taxes.

So, at the age when retirement is starting to be a consideration, many people think, "If I work for another 2-3 years, I can fill my credits." Self-employed individuals can also accumulate credits by paying taxes on their business income, making it easier for them.

The crucial point here is not how much you earn, but whether you paid Social Security taxes. However, if you still can't reach 40 credits, there's another option: your spouse's or ex-spouse's Social Security benefits. If you are married and your spouse has already qualified for Social Security, you may be able to receive benefits based on their record even if you don't have your own.

The same applies if you are divorced. If you were married for at least 10 years and your ex-spouse qualifies for Social Security, you can receive benefits based on their record as long as you are not remarried. Many people are unaware of this and miss out, but there are actually quite a few cases where individuals receive benefits through this system.

However, relying solely on Social Security for retirement planning in today's world can be quite risky. You may lack enough credits, and when you calculate it, the benefit amount may be less than expected. Therefore, preparing personal retirement accounts like 401(k) or IRA, along with pension products, is a realistic strategy. Social Security is meant to provide a basic foundation, not to cover all of your retirement living expenses.

In the case of Mr. Kim, who worked for 20 years earning about $50,000 a year

Mr. Kim is now 65 years old and has consistently reported an income of $50,000 every year from age 45 to 65 since immigrating.

This means he has more than enough credits, exceeding 40. Now the question is how much will he receive monthly.

Social Security is not calculated simply as "how much you earned × how many years." It is based on the average of your highest 35 years of earnings. In Mr. Kim's case, he only has income records for 20 years, and the remaining 15 years count as zero. This is the key point. This is why benefits can be lower for those who have worked in the U.S. for a long time.

To give a rough estimate, if he earned $50,000 a year for 20 years, the total would be $1,000,000. However, dividing this by 35 years brings the average down to about $28,000 per year. Dividing that by 12 gives an average monthly income of about $2,300 for the benefit calculation.

Under these conditions, the Social Security benefit amount would realistically be around $1,300 to $1,500 per month at age 65. The exact amount can vary slightly based on individual annual income inflation adjustments, the timing of when benefits are claimed (retirement age is 66-67), and the calculation formula, but thinking "around this amount" is not far off.

If Mr. Kim claims benefits at 65 instead of waiting until retirement age, the amount will be slightly reduced. Conversely, if he waits until 67, the monthly benefit will increase a bit. And if he delays until 70, it will increase even more. This leads to the common question among people: "Should I take it now or delay?"

Here's a point that confuses many immigrants. They might think, "I earned $50,000 a year, so why is it only this much?" The reason is simple: the period of work in the U.S. is less than 35 years. Since the calculation is based on the same criteria as those born in the U.S. who have worked for 30-40 years, it is structurally disadvantageous.

Therefore, in such cases, planning retirement based solely on Social Security will not yield satisfactory results. A monthly benefit of around $1,400 may cover basic living expenses, but it is tight to cover all medical and housing costs. In such situations, one should also consider 401(k), IRA, personal savings, or the possibility of spousal benefits to get a clearer picture.

In summary, for Mr. Kim's situation, the realistic Social Security benefit amount is around $1,300 to $1,500 per month. He is not wealthy, but he is not without benefits either. This amount is a typical figure for a first-generation immigrant who worked for 20 years. Knowing this figure in advance is the starting point for retirement preparation.

If you are unsure about how many credits you have, it's a good idea to check directly with the Social Security Administration (SSA). You can verify it through an online account, and they can provide detailed explanations about spousal benefits or other alternatives during a consultation.

Ultimately, having more than 40 Social Security credits is a good minimum benchmark, but it does not guarantee retirement. You can develop a strategy by working a bit more, adjusting your income structure, utilizing spousal benefits, and filling in the gaps with other retirement assets.

The saying that the earlier you start thinking about retirement, the more options you have applies to Social Security as well.