Glossary
administrative law judge (ALJ) The judge who presides over an appeal about a decision related to Social Security benefits.
amyotrophic lateral sclerosis (ALS) Also known as Lou Gehrig’s disease, ALS is a progressive neurodegenerative disease that affects the brain and the spinal cord.
appeal If you disagree with a decision by the Social Security Administration (SSA), you have the right to file an appeal of the decision. You have a right to have representation for your appeal. You must have the Notice of Decision on your benefits before you begin the appeals process.
Appeals Council Review This is the third step in the appeal process, after reconsideration and the hearing. The Appeals Council is a panel of three administrative law judges (ALJs).
applicant Someone who is applying for Social Security benefits. Also known as a claimant.
assisted living Facilities offering assistance to seniors or the disabled, ranging from meals in shared dining halls to assistance going to and from activities for those with physical or mental limitations.
auxiliary benefits Social Security benefits that go to family members, based on the eligible worker’s earnings record. Also known as family benefits.
average indexed monthly earnings (AIME) The SSA takes an eligible worker’s earnings for 35 years and divides it by 12 to calculate their AIME. This amount is used when the SSA decides what an eligible claimant’s monthly benefit should be.
bend points The dollar amounts in the formula for the AIME or primary insurance amount (PIA). These are referred to as bend points because when you graph the formula, it looks like a series of line segments connecting at certain amounts.
beneficiary A recipient of Social Security benefits.
benefit period This term is applied by Original Medicare to the use of hospital and skilled nursing facility (SNF) services. The day one is admitted into a hospital or SNF as an inpatient is considered the beginning of a benefit period. It ends when no inpatient care has been received for 60 consecutive days.
break-even point A break-even point is the specific age at which you will have received the same amount of benefits no matter whether you choose to retire at 62, your full retirement age, or age 70.
child Refers to a dependent biological, adopted, or stepchild, as well as a dependent grandchild, who is eligible to receive benefits based on a worker’s work credits.
claimant Someone who files for Social Security benefits. Also known as an applicant.
co-payment The amount of a medical service you’re responsible for after Medicare or any other health-care insurance has paid for what it will cover.
Cost of Living Adjustment (COLA) An annual increase in benefits tied to increase in inflation.
deductible The amount you have to pay before Medicare or any other insurance program starts to cover some or all of the costs.
delayed retirement credit This refers to the 8 percent (on average) that Social Security benefits grow annually from the amount you would have received at your full retirement age if you instead delay starting benefits until age 70.
dependent A child, spouse, ex-spouse, or parent who is dependent on the eligible worker and who may be entitled to retirement or disability benefits from Social Security.
direct deposit The ability to deposit funds electronically into a personal bank account. Social Security benefits are deposited directly into a bank account instead of mailing a check.
disability benefits If you meet the criteria for being disabled that the Social Security Administration (SSA) follows, you’re eligible for monthly disability benefits.
Disability Determination Services (DDS) A state agency, which is funded by the federal government or the residing state, that determines if someone meets the criteria to be considered disabled or blind under the law and possibly eligible for benefits.
disabled You are considered disabled if you’re unable to engage in any substantial gainful activity due to a medically determinable physical or mental impairment that lasts for at least
12 months or is expected to cause death.
donut (or doughnut) hole The term used to describe the gap in Medicare prescription drug coverage. This coverage gap highlights the situation in which once you and your prescription drug plan have spent a certain amount of money for covered drugs, you may find yourself having to pay more for your prescription drugs up to a certain limit.
earliest eligibility age (EEA) The age when you can apply for Social Security benefits based on your own or someone else’s work record.
early retirement age The earliest age you can start taking your own benefits on your work history, which is age 62.
earnings caps See wage caps.
earnings record Also known as your earnings history, this is a list of all your earnings since you began working and your employer-paid Social Security benefits on your behalf. This record is the basis upon which the SSA will determine what your monthly benefits should be when you apply to start collecting Social Security.
eligible A designation that you have met all the legal requirements to receive a benefit. However, eligibility is only one step in the process of receiving benefits.
end stage renal disease (ESRD) A kidney disease that requires a transplant or dialysis. An ESRD diagnosis qualifies you for Social Security benefits or SSI disability benefits, and the waiting period is waived.
ex-spousal benefits If you were married for at least 10 years, you have been divorced for at least 2 years, you haven’t remarried, and your ex-spouse is eligible for Social Security benefits and has reached full retirement age, you can file for benefits on your ex-spouse’s record.
family benefits Benefits from the Social Security Administration that go to family members, such as a spouse, ex-spouse, or dependent child or parent, based on the eligible worker’s earnings record. Also referred to as auxiliary benefits.
family maximum The total benefits amount that can be paid to family members based on a worker’s earnings record.
Federal Insurance Contributions Act (FICA) tax The payroll tax for Social Security and Medicare.
file and suspend strategy When a worker files for Social Security at full retirement age, but then suspends benefits for him- or herself, which enables the spouse to file for spousal benefits. The spouse, however, continues to work and grow his or her potential benefit due to delayed retired credits, finally taking his or her benefits at the age of 70, when the benefits reach their maximum monthly amount.
financial advisor (FA) Someone trained to give financial advice. Also referred to as a financial planner or benefits consultant. The Financial Industry Regulatory Authority (FINRA) oversees the activities of brokerage houses in the United States as well as their registered representatives.
full retirement age (FRA) The age the SSA has determined at which you can receive
100 percent of your Social Security retirement benefits.
Government Pension Offset (GPO) If a worker spent some or all of his or her career working in a government job that didn’t pay Social Security, the Social Security survivors or spousal
benefits may be reduced.
hearing This is the second level in the appeal process, after reconsideration (or Request for Reconsideration) and before the Appeals Council Review.
hospital insurance See Medicare Part A.
identity theft When someone takes on someone else’s identity illegally for the purpose of opening up bank accounts or credit cards and making purchases in the other person’s name.
life expectancy How long you can be expected to live, based on actuarial tables, with the key factors being gender and date of birth.
life expectancy calculator A calculator that helps you determine what your life expectancy might be.
long-term care insurance Also known as long-term life insurance, this is insurance you can purchase privately to help cover the costs of long-term care.
Lump Sum Death Benefit (LSDB) A one-time benefit of $255 available to a child or spouse
of a worker who is eligible for Social Security benefits.
maximum family benefit See family maximum.
Medicaid A program coordinated by the U.S. government but run through individual state Medicaid programs for those who are eligible for health care and other basic needs such as food and housing.
Medicare A federally financed and administered program of health-care coverage for seniors age 65 and up and others who qualify due to disability. Medicare is commonly divided into four parts: Part A (hospitalization), Part B (medical services including doctor’s visits), Part C (additional programs you can buy privately), and Part D (prescription drugs).
Medicare Advantage See Medicare Part C.
Medicare Part A The part of the Medicare program that provides insurance covering hospitalization.
Medicare Part B The part of the Medicare program that covers physician services and visits and other medical bills.
Medicare Part C Also known as Medicare Advantage, this is a privately run part of Medicare that enables recipients to pay additional coverage for anything not covered by Original Medicare, including prescription drugs and costs that Medicare Part B does not cover.
Medicare Part D This part adds prescription drug coverage to your Original Medicare plan since drug coverage is not included. There is a wide variety in what each plan offers, including what the monthly premium will be as well as what drugs are covered and any annual caps on coverage.
Notice of Decision The formal communication from the SSA regarding their decision about what benefits, if any, you will be receiving, as well as when the first benefit payment will be issued.
Old-Age, Survivors, and Disability Insurance (OASDI) Insurance covering benefits for retirees, widows and widowers, disabled workers, and dependent family members.
primary insurance amount (PIA) The benefit amount you would receive if you begin receiving retirement benefits at your FRA. At this age, the benefit is neither reduced for early retirement nor increased for delayed retirement.
quarter of coverage (QC) The number of work credits you receive in a year, which is used to determine eligibility for Social Security benefits. You can only receive four QCs in a year.
Railroad Retirement Board (RRB) Started in 1935, this is an independent agency and part of the executive branch of the U.S. government that administers the retirement benefits available to the country’s railroad workers.
Request for Reconsideration The first step in the appeal process where you put in writing why you’re appealing the SSA’s decision. Reconsideration occurs before a hearing is set.
retirement age See full retirement age (FRA) and early retirement age.
Self-Employment Contribution Act (SECA) tax The payroll tax that those who are self-employed must pay.
Social Security A retirement benefits program started in 1935 by President Franklin D. Roosevelt that provides monthly benefits to those who qualify by being a U.S. citizen and having the minimum number of work credits. A series of compromise laws in 1952 and 1954 regarding disability benefits paved the way for the final passage of Social Security Disability Insurance in 1956. Social Security is funded through contributions from employers and employees as well as from the self-employed.
Social Security card The card you’re issued from the Social Security Administration (SSA) with your unique Social Security number on it.
Social Security number The unique nine-digit number you’re given by Social Security that will be used throughout your life to track all the earnings you’ve made in addition to your payments into Social Security through payroll taxes.
Social Security statement This statement summarizes your earnings during the previous year, in addition to your earnings from your first job forward. You should check it at least once annually, especially right before you apply for Social Security benefits the first time.
spousal benefits When you file for retirement benefits, your spouse may be eligible for a benefit based on your earnings, which can be as much as half of your primary insurance amount, depending on the spouse’s age at retirement.
Supplemental Security Income (SSI) A program administered by the SSA providing Medicaid as well as other benefits to those who are financially needy and who qualify because they’re disabled, blind, or old.
survivors benefits Benefits paid by the SSA to the surviving spouse, eligible ex-spouse, child, or dependent parent of a worker who has died.
third rail A term often used in reference to Social Security or Medicare that suggests radically reducing or eliminating either one is politically disadvantageous for any legislators or business leaders making such a recommendation.
Ticket to Work The term for the nine-month trial period you’re allowed in order to see if you’re able to return to work without having your disability benefits cancelled.
wage caps These are the caps on earnings that those receiving Social Security benefits before their full retirement age must consider or they will have to return part of the benefits. Also known as earnings caps.
widow’s or widower’s benefits See survivors benefits.
Windfall Elimination Provision If you received a pension for government work for which Social Security was not paid, your benefits may be reduced.
work credits The unit the SSA uses to determine benefit eligibility. Forty credits are the minimum number required for eligibility, and you can receive up to four annually.