TERMS & DEFINITIONS

Average Indexed Monthly Earnings (AIME) – The dollar amount used to calculate your Social Security benefit if you attained age 62 or became disabled (or died) after 1978.  To arrive at your AIME, we adjust your actual past earnings using an "average wage index," so you won’t lose the value of your past earnings (when money was worth more) in relation to your more recent earnings.  If you attained age 62 or became disabled (or died) before 1978, we use Average Monthly Earnings (AME).  

Cost of Living Adjustment (COLA)
– Social Security benefits and Supplemental Security Income (SSI) payments may be automatically increased annually to help keep pace with increases in inflation.
 

Delayed Retirement Credits (DRC) – Social Security benefits are increased by a certain percentage (depending on date of birth) if a person delay taking retirement benefits beyond full retirement age.  

Early Retirement
– You can start getting Social Security retirement benefits as early as age 62 if you are insured, but your benefit amount will be less than you would have gotten if you waited until your full retirement age.  If you take retirement benefits early, your benefit will remain permanently reduced, based on the number of months you received benefits before you reached full retirement age.    

Family Maximum
– The maximum amount of benefits payable, to an entire family, on any one worker’s record.
 

FICA Tax
– FICA stands for "Federal Insurance Contributions Act." It’s the tax withheld from your salary or self-employment income that funds the Social Security and Medicare programs.
 

Full Retirement Age – The age at which a person may first become entitled to full or unreduced benefits based on age.  

Lump Sum Death Payment
– A one-time payment of $255 paid in addition to any monthly survivors benefits that are due.  This benefit is paid only to your widow/widower or minor children.
 

OASDI (Old Age Survivors and Disability Insurance)
– The Social Security programs that provide monthly cash benefits to workers and their dependents when they retire, die or become disabled.
 

PIA (Primary Insurance Amount) – The monthly amount payable, if you are a retired worker who begins receiving benefits at full retirement age or if you're disabled and have never received a retirement benefit reduced for age.  

Reduction Months
– Months beginning with the first month you're entitled to reduced benefits up to, but not including, the month in which you reach full retirement age.
 

Retirement Age
– Full Benefits – Full retirement age was 65 for many years.  However, beginning with the year 2000 (for workers and spouses born in 1938 or later, or widows or widowers born in 1940 or later), the retirement age increases gradually from age 65 until it reaches age 67 in the year 2022.
 

Retirement Age – Minimum
– The minimum age for retirement
– age 62 for workers, and age 60 for widows or widowers.  You can choose a reduced benefit any time before you reach full retirement age.  

Retirement Earnings Test
– If you receive monthly Social Security benefits before your full retirement age and work, your earnings from wages and/or self-employment cannot exceed a certain amount without reducing your monthly benefits.
 

Retroactive Benefits (Back Pay) – Monthly benefits that you may be entitled to before the month you actually apply, if you meet the requirements.  

Retirement Benefit
– Money that is payable to you upon retirement if you have enough Social Security credits.
 

Self-employment Income
– You are self-employed if you operate a trade, business or profession, either individually or as a partner, and have net earnings of $400 or more in a taxable year.
 

Social Security
– Social Security is based on a simple concept: While you work, you pay taxes into the Social Security system, and when you retire or become disabled, you, your spouse and your dependent children receive monthly benefits that are based on your reported earnings.
 

Social Security Number (Social Security Card) – Your first and continuous link with Social Security is your nine-digit Social Security Number.  It helps us to maintain an accurate record of your wages or self-employment earnings that are covered under the Social Security Act, and to monitor your record once you start getting Social Security benefits.  

Social Security Office – You can call the toll-free telephone number, 1-800-772-1213, to receive Social Security services.  Their TTY number is 1-800-325-0778.  This toll-free telephone number service is available from 7 a.m. to 7 p.m. any business day.  All calls are confidential.  See the Social Security Office Locator for the address of your local office. In addition, many services are now available through the Internet.  There is no charge for any of the services.

Spouse
– You are the spouse of the worker if, when he or she applied for benefits: you and the worker were married; or you would have the status of a husband or a wife for that person’s personal property if they had no will; or you went through a marriage ceremony in good faith, which would have been valid except for a legal impediment.  

Supplemental Security Income (SSI)
– A federal supplemental income program funded by general tax revenues (not Social Security taxes).  It helps aged, blind, and disabled people who have limited income and resources by providing monthly cash payments to meet basic needs for food, clothing, and shelter.
  Survivors Benefits – Benefits based on your record (if you should die) are paid to your:

  • widow/widower age 60 or older, 50 or older if disabled, or any age if caring for a child under age 16 or disabled before age 22;       
  • children, if they are unmarried and under age 18, under 19 but still in school, or 18 or older but disabled before age 22; and   
  • parents, if you provided at least one-half of their support. An ex-spouse could also be eligible for a widow/widower's benefit on your record.

Wage Earner
– A person who earns Social Security credits while working for wages or self-employment income.  Sometimes referred to as the "Number Holder" or "Worker."


Wages
– All payment for services performed for an employer.  Wages do not have to be cash.  The cash value of all compensation paid to an employee in any form other than cash is also considered wages, unless the form of payment is specifically not covered under the Social Security Act.


Widow
– You are the widow/widower of the worker if, at the time he or she died:
         
  • you and the worker were validly married; or  
  • you would have the status of a husband or a wife for that person’s personal property if he or she had no will; or
  • you went through a marriage ceremony in good faith that would have been valid except for a legal impediment.
The minimum age for widows benefits is 60, or 50 if disabled.

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