The Social Security Administration (SSA) has updated one of the most important requirements to receive a retirement benefit. In 2027, workers will need to earn $1,970 to obtain one work credit, compared with $1,890 in 2026.
Work credits, also known as quarters of coverage, are the way the SSA measures whether a person has worked long enough to qualify for benefits. They are earned with the wages or self-employment income on which Social Security taxes are paid.
How many credits are needed to retire
Workers born in 1929 or later need 40 credits to qualify for retirement benefits. Since a maximum of four credits can be earned per year, this usually means about 10 years of work.
- One credit in 2027 | $1,970 in covered earnings.
- Four credits in 2027 (the maximum) | $7,880 in covered earnings.
- Credits needed to retire | 40.
Credits are not tied to specific quarters. A person who earns $7,880 in January 2027 already has the four credits for the whole year. The credits earned are never lost, even if the person stops working for a long time.
The taxable maximum also rises
The SSA also raised the taxable maximum, the earnings limit on which the 6.2% Social Security tax is paid. It goes from $184,500 in 2026 to $192,300 in 2027. Income above that amount is not taxed for Social Security, though it is still taxed for Medicare. We explained how this limit works in our article about the $184,500 ceiling of 2026.
Having 40 credits is not the same as a high benefit
Reaching 40 credits only opens the door to a retirement benefit. The amount depends on the 35 years of highest earnings, adjusted for wage growth, and on the age at which the person claims. Those who retire at 62 receive a permanently reduced check, as we explained in our article on retiring at 62 with 40 credits.
Disability benefits have different credit rules, which depend on the worker’s age when the disability begins. Retirees who are already collecting do not need to worry about credits: their benefit will simply rise with the 3.6% COLA in January.
