Many Americans look forward to receiving Social Security payments at the end of a long career. The Social Security Administration (SSA) says that while you can start receiving benefits at age 62, you get a larger benefit each year you wait to get them until age 70. But this assumes you’ve earned enough credits to qualify.
It’ll be best to know ahead of time if these benefits aren’t available to you so you can create alternative retirement arrangements. In some instances, a worker may not have earned Social Security.
Let’s look at six reasons why you may miss out.
Insufficient S.S.I. Credits
According to the American Association of Retired People (AARP), you must work to earn “credits” that allow you to qualify for Social Security payments.
In 2021, you received one credit for every $1,470 you earned in salary or self-employment. The Social Security Administration (SSA) says you may only receive four credits each year. To qualify for any Social Security payment, a person requires 40 credits. Don’t expect to be eligible for these perks if you haven’t earned all 40 credits.
You’re One of These Types of Government Employees
While the government usually looks after its employees, there are several exceptions for employees who don’t get Social Security benefits at the state, county, or municipal levels. Instead, these employees contribute to and get benefits through state-funded pension programs. These include:
â€¢ U.S. government employees hired before 1984 receive pensions under the old Civil Service Retirement System (CSRS)
â€¢ Railroad employees, whose pension system dates back to the 1930s
â€¢ Foreign nationals working in the U. S. for their home governments, such as ambassadors or workers for the United Nations or other international organizations
â€¢ Most safety personnel/first responders, such as police and firefighters
â€¢ Many K-12 teachers
If You Owed Self-Employment Taxes
Many self-employed company owners are unaware that they must now pay into Social Security twice: as an individual and a corporation. You must pay this tax with your federal return. If you don’t file at all or file incorrectly, you may not have enough Social Security credits to retire. Moreover, if you continually don’t pay these taxes, you could get into legal trouble.
If you’re divorced and don’t have enough credits to qualify for Social Security on your own, don’t plan on obtaining half of your ex’s benefits. You must be unmarried, 62 or older, and have earned less than your ex-spouse. According to Investopedia, you cannot collect your spouse’s benefits if you are married for less than ten years.
If You Retire in Certain Foreign Countries
If you retire outside of the U.S., DC, Puerto Rico, US Virgin Islands, Guam, Northern Mariana Islands, or American Samoa, you may not qualify for Social Security benefits. Azerbaijan, Belarus, Cuba, Kazakhstan, Kyrgyzstan, Moldova, North Korea, Tajikistan, Turkmenistan, and Uzbekistan are exempt from U.S. contributions. There may be exceptions, but you must use the Social Security Administration’s “Payments Abroad Screening Tool” to evaluate your eligibility.
Immigrants who arrive later in life and have not accrued the 40 labor credits required to qualify for Social Security will be denied these benefits. The solution is to obtain six work credits in the U.S., which entitles the worker to prorated U.S. benefits. A “totalization agreement” combines this with prorated benefits from their former country.
After entering the financial services industry in 1994, it was a desire to guide people towards their financial independence that drove Aaron to start Steele Capital Management in 2013. Armed with an extensive background in financial planning and commercial banking coupled with a sincere passion for helping people, Aaron has the expertise and affinity for serving the unique needs of those in transition. Clients benefit from his objective financial solutions and education aligned solely with
helping them pursue the most comfortable financial life possible.
Born in Olympia, Washington, Aaron spent much of his childhood in Denver, Colorado. An area outside of Phoenix, Arizona, known as the East Valley, occupies a special place in Aaron’s heart. It is where he graduated from Arizona State University with a Bachelor of Science degree in Business Administration, started a family, and advanced his professional career.
Having now returned to his hometown of Olympia, and with the days of coaching his sons football and baseball teams behind him, he now has time to pursue his civic passions. Aaron is proud to serve on the Board of Regents Leadership for Thurston County as the Secretary and Treasurer for the Morningside area. His past affiliations include the West Olympia Rotary and has served on various committees for organizations throughout his community.
Aaron and his beautiful wife, Holly, a Registered Nurse, consider their greatest accomplishment having raised Thomas and Tate, their two intelligent and motivated sons. Their oldest son Tate is following in his father’s entrepreneurial footsteps and currently attends the Carson College of Business at Washington State University. Their beloved youngest son, Thomas, is a student at Olympia High School.
Focused on helping veterans and their families navigate the maze of long-term care solutions, Aaron specializes in customized strategies to avoid the financial crisis that care related expenses can create. Experience has shown him that many seniors are not prepared for the economic transition that takes place as they reach an advanced age.
With support from the American Academy of Benefit Planners – an organization with expertise and resources on the intricacies of government benefits – he helps clients close the gap between the cost of care and their income while protecting their assets from depletion.
Aaron can help you and your family to create, preserve and protect your legacy.
That’s making a difference.
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