Social Security Glossary

AIME (Average Indexed Monthly Earnings):  The dollar amount used to calculate your Social Security benefit if you attained age 62 or became disabled (or died) after 1978.

AME (Average Monthly Earnings):  The dollar amount used in calculating your monthly Social Security benefit if you attained age 62 or became disabled (or died) before 1978. The AME is determined by dividing the total earnings in the "computation years" by the number of months in those same years.

Base Years:  A worker's (wage earner) base years for computing Social Security benefits are the years after 1950 up to the year of entitlement to retirement or disability insurance benefits.

Benefits:  Social Security pays monthly benefits in five major categories - (1) Retirement, (2) Disability, (3) Family (dependents), (4) Survivors, (5) Medicare. The retirement, family (dependents), survivor and disability programs pay monthly cash benefits, and Medicare provides medical coverage.

Computation Years:  Computation years are the years with highest earnings selected from the "base years.”

Disability Benefits:  You can get diability benefits if you (1) are under full retirement age, (2) have enough social security credits, and (3) have a severe medical impairment (physical or mental) that's expected to prevent you from doing "substantial" work for a year or more, or have a condition that is expected to result in death.

Early Retirement:  You can start getting Social Security retirement benefits as early as age 62, 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 checks 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.

Food Stamps (Food Stamp Program):  The U. S. Department of Agriculture program that helps needy families buy food.

FRA (Full Retirement Age):  The age at which a person may first become entitled to full or unreduced retirement benefits.  Beginning with year 2000 for workers and spouses born 1938 or later and widows/widowers born 1940 or later, the retirement age increases gradually from age 65 until it reaches age 67 in the year 2022. This increase affects the amount of the reduction for persons who begin receiving reduced benefits.

If you or a loved one is looking for information regarding social security, contact one of our social security attorneys in your area today!Lump Sum Death Payment:  A one-time payment of $255 paid in addition to any monthly survivors insurance benefits that are due.  This benefit is paid only to your widow/widower or minor children.

Maximum Earnings:  The maximum amount of earnings we can count in any calendar year when computing your Social Security benefit.

Representative Payee:  If you receive Social Security benefits or Supplemental Security Income and become unable to handle your own financial affairs, after a careful investigation, we appoint a relative, a friend, or an interested party to handle your Social Security matters. Representative payees are required to maintain complete accounting records and periodically provide reports to Social Security.

SEI (Self-employment/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. Also, your survivors can collect benefits if you die.

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).If you or a loved one is looking for information regarding social security, contact one of our social security attorneys in your area today!