The Calculation of Social Security Credits

Understanding Social Security

Social security is a federal insurance program that provides benefits to retired or disabled individuals and their families. The program is funded by contributions from employers and employees, which are then used to provide a financial safety net for those who qualify. The program is administered by the Social Security Administration and provides benefits such as retirement, disability, and survivor's benefits.

In the case of Maggie, who earned $187 biweekly in the tax year 1990, let's break down how many social security credits she earned. With her biweekly earnings totaling $187, we can calculate her annual earnings by multiplying it by the number of weeks in a year (52). Therefore, $187 x 52 = $9,724 for the year.

Since the amount of earnings required to earn one social security credit in 1990 was $520, we can divide Maggie's total annual earnings by this amount to find out how many social security credits she earned. $9,724 / $520 = 18.7. This means Maggie earned 18.7 social security credits in 1990.

However, social security credits are typically rounded down to the nearest whole number. Therefore, Maggie would have earned 18 social security credits for the year, which is a significant amount and would contribute to her eligibility for social security benefits in the future.