Social security question

[Dominus]

I know quite a few members here are in retirement. I have a question for you about social security benefits.

I just created an account on ssa.gov. It says this on there.



I'm in my late 30s. 40 is just right around the corner *sigh*. If I never pay into SS and Medicare taxes ever again, will I be able to draw from SS and be on medicare in my 60s? In other words, will they let me draw from it if I don't pay into it for 25-30 years leading up to retirement age?

 

[Araucaria]

I believe you will be able to draw Social Security and Medicare. However, the amount you will be able to draw is at least partly determined by the years and amount you paid into the fund, so the amount you receive may be lower than you anticipate. That happened to me. There were several periods that I was in college, periods of unemployment, and periods of working for employers who paid into their own retirement fund rather than Social Security. You will have to figure the length of employment and the payments if you plan to rely on Social Security.

 

[cityboy-stl]

I believe you will be able to draw Social Security and Medicare. However, the amount you will be able to draw is at least partly determined by the years and amount you paid into the fund, so the amount you receive may be lower than you anticipate. That happened to me. There were several periods that I was in college, periods of unemployment, and periods of working for employers who paid into their own retirement fund rather than Social Security. You will have to figure the length of employment and the payments if you plan to rely on Social Security.

^ This.

40 credits is the minimum, so you will be able to receive benefits, at least according to the law today. The amount you receive from SS is determined by how much you pay in. The earliest you can receive SS is currently 62. Who knows what it will be in 25-30 years. If you stop paying in now, you won't get much at all when the time comes.

Just me, but I would not do that unless you win the Lottery or something.

Benefits Planner | Social Security Credits and Benefit Eligibility | SSA

To be eligible for Social Security benefits you must earn Social Security Credits. You earn these credits by paying Social Security tax on your income. Read more to understand how credits work and how many you will need to qualify for benefits.

www.ssa.gov

 

[Dominus]

^ This.

40 credits is the minimum, so you will be able to receive benefits, at least according to the law today. The amount you receive from SS is determined by how much you pay in. The earliest you can receive SS is currently 62. Who knows what it will be in 25-30 years. If you stop paying in now, you won't get much at all when the time comes.

Just me, but I would not do that unless you win the Lottery or something.

Benefits Planner | Social Security Credits and Benefit Eligibility | SSA

To be eligible for Social Security benefits you must earn Social Security Credits. You earn these credits by paying Social Security tax on your income. Read more to understand how credits work and how many you will need to qualify for benefits.

www.ssa.gov

My income has changed to unearned. I file taxes under 1040-E, which doesn't include ss and Medicare tax.

 

[cityboy-stl]

My income has changed to unearned. I file taxes under 1040-E, which doesn't include ss and Medicare tax.

I'd connect them and ask about ongoing contributions then, if you want to.

 

[rareboy]

^ This. Get some guidance.

Find out how to best protect yourself for the future.

 

[NotHardUp1]

The site you reference tells you what your estimated benefits are at 62, 65, 67, or whatever age is determined to be full benefit for your age group.

There is also a link to your entire payment record to SSA. It will tell you what you paid in SS tax every year since you began paying.

I go to the site often.

Once you make a certain level of earnings and pay in, almost nothing you do can increase your benefits or diminish them, other than retiring early or late. I could make a million dollars a year for the next five years and it won't bump the needle. Likewise, I could earn $300 per year, and little impact. But I've worked full time for over 40 years now, so that's over 160 credits.

 

[NotHardUp1]

The government has a real dilemma with SS. My family is typical of many. I have four siblings on my mother's side. One has probably not even worked the 10 years required to draw SS. Another worked until about age 45 and has lived on SS disability and unreported labor for almost 20 years since. His wife has never worked. Another sibling has worked on and off and retired at age 62. Her husband works a minimal pay janitorial job and is a gun dealer on the side. On my father's side of the family, at least one sibling has worked less than minimally and is in debt. Yet everyone feels like the government owes them some good retirement benefit, even though they never paid in adequately to the system.

So my modest inputs cannot possibly support all my siblings who made minimal contributions.

 

[cityboy-stl]

After the required 40 credits, any additional credits you accrue are not relevant to the benefit amount calculation. The amount of your of monthly Social Security retirement benefit is dependent solely upon how much has been contributed by you and your employers under your SSN, up to the maximum benefit amount.

Do not confuse SSI, Supplemental Security Income otherwise known as Social Security Disability, with Social Security Retirement. Both retirement and disability are administered by the Social Security Administration, and the names are indeed confusing. But, the funding for each, is separate. Social Security Retirement is funded exclusively by your contributions to the Federal Insurance Contributions Act (FICA). No money from the general fund, goes to, nor has ever gone to, Social Security retirement benefit payments. No money from the Social Security Trust Fund has ever been part of, used by, or gone to the general fund. Similarly, no money from the retirement fund (FICA) is used, nor has ever been used to make disability payments. Social Security Disability (SSI) is entirely funded through the general fund. They are two separate, distinct accounts. They do not touch one another. This is set down in the law, and anything different - is illegal.

 

[TickTockMan]

After the required 40 credits, any additional credits you accrue are not relevant to the benefit amount calculation. The amount of your of monthly Social Security retirement benefit is dependent solely upon how much has been contributed by you and your employers under your SSN, up to the maximum benefit amount.

Do not confuse SSI, Supplemental Security Income otherwise known as Social Security Disability, with Social Security Retirement. Both retirement and disability are administered by the Social Security Administration, and the names are indeed confusing. But, the funding for each, is separate. Social Security Retirement is funded exclusively by your contributions to the Federal Insurance Contributions Act (FICA). No money from the general fund, goes to, nor has ever gone to, Social Security retirement benefit payments. No money from the Social Security Trust Fund has ever been part of, used by, or gone to the general fund. Similarly, no money from the retirement fund (FICA) is used, nor has ever been used to make disability payments. Social Security Disability (SSI) is entirely funded through the general fund. They are two separate, distinct accounts. They do not touch one another. This is set down in the law, and anything different - is illegal.

SSI and SSDI are two different things.


SSDI is for disabled people. SSI are for those that are super poor even with SS payments. You can get SSDI and SSI if you are poor enough.

 

[lockeroomguy]

Yes, you will get both social security and medicare, even if you never work again. However, the amount you will receive from social security will be next to nothing. To calculate your social security payment they take your earnings from every year worked and adjust it for inflation to reflect todays value. They then take you highest 35 years, average that amount, and your payment is a portion of that figure (varies by how soon or late you start payments between 62 and 70). If, for example, you only had earnings in 15 years, there would be 20 years of $0 calculated into the average. You would only receive a pittance. Your medicare payment would not be affected.

 

[NotHardUp1]

This social situation has actually quite a bit to do with the ongoing culture wars between conservatives and progressives, to state what is obvious to readers here above the age of 40.

Progressives have backed social programs that help provide affordable housing, education, food support, drug addiction, single parents, and those who cannot or will not work. Conservatives have typically opposed those program due to the poor administration of them and the rampant abuse by those who should not qualify. At the same time, the conservatives turn a blind eye to the military-industrial bloat and waste, and shroud all military activity as pure patriotism, above accountability.

Both factions lead to taxpayer disenchantment and disillusion, which obviously doesn't include the billionaires who manipulate their taxes with accountants who hide real income with overstated investment and losses. That also leaves a swath of unpaid taxes near the bottom by those who operate frequently and significantly in the black market and in cash. Both sides deny the impact of their unpatriotic behavior. Both sides expect the middle class to carry the weight of the government's costs.

 

[cityboy-stl]

Raise the CAP!

 

[rareboy]

It is all fairly similar to the Canadian Pension Plan and Old Age Security benefits.

We pretty much have to start drawing our pension at at 70 if we don't do it at 65. But at the end of the day, the total benefit will be the CPP plus any Guaranteed Income Supplement and of course it is all taxable income.

The goal was pretty much to ensure that any senior is provided with the merest basic income to cover fundamental living costs but for people with no equity or other retirment savings, it is pretty fucking grim...although again, the urban communities will have housing authorities that will provide subsidized housing for seniors.

But as I noted above, you should likely get advice from the Agency or a financial advisor as to how you can maximize your future benefits to help you live comfortably.

 

[NotHardUp1]

^ To be clear, in the U.S., you do NOT have to pay federal income tax on your Social Security benefits as a retiree UNLESS your income as a single exceeds $25k per year, or as a couple, $34k per year. If your income does, in the latter case, you'll pay your tax rate only on 50% of your combined income (from SS and any other source), and up to 85% of your income if it exceeds $34k per year. MANY recipients will have no income over $25k and will pay NO federal tax on the SS. State income taxes vary.

Request to withhold taxes

Submit a request to pay taxes on your Social Security benefit throughout the year instead of paying a big bill at tax time.

www.ssa.gov

 

[rareboy]

That also is pretty much the case here.

It is only when the income from private pensions and investments comes into play that the claw-back on taxes occurs on total income earned.

Which I have no issue with. I am delighted to know that my taxes keep the superannuated from abject poverty. I would only have blown the money on sex toys otherwise.

 

[NotHardUp1]

I agree. I wish the American model was need-based. Even after all the citizenry who lie about everything when it come to greed are done, at least the few who are honest would forego claiming benefits they do not need.

 

[cityboy-stl]

^ To be clear, in the U.S., you do NOT have to pay federal income tax on your Social Security benefits as a retiree UNLESS your income as a single exceeds $25k per year, or as a couple, $34k per year. If your income does, in the latter case, you'll pay your tax rate only on 50% of your combined income (from SS and any other source), and up to 85% of your income if it exceeds $34k per year. MANY recipients will have no income over $25k and will pay NO federal tax on the SS. State income taxes vary.

Request to withhold taxes

Submit a request to pay taxes on your Social Security benefit throughout the year instead of paying a big bill at tax time.

www.ssa.gov

Just to be clear, I believe this means $25K taxable income after deductions and adjustments and stuff. Your gross can be higher than $25K, but after all the calculations are done, the final, bottom line taxable amount is often less than $25K and you pay no taxes. That's what happens to me. They don't really make that clear on the SSA page.

 

[NotHardUp1]

No, the government NEVER makes taxation clear. Thanks for pointing out the calculation.

 

[peeonme]

A lawyer is a person that writes something that you have to pay another lawyer to explain to you. Taxes, S.S. benefits, mortgages and just about all things involving property and money are written in such a way as to keep the common man from truly understanding them. If you have a question that really matters pay a lawyer that is an expert in that field.