Shocking Truth: 2.6 Million Americans Over 60 Will Never Receive Social Security!
If you’re planning to supplement your retirement income with Social Security, you’re in good company. In the United States, 77.2 million people are current or future beneficiaries. However, not everyone can count on receiving that monthly check during their golden years.
According to the Social Security Administration (SSA), about 2.6 million Americans aged 60 or older will never receive Social Security retirement benefits. That’s approximately 3.3% of the senior population who might miss out. So, why does this happen, and how can you ensure you’re not among them?
Understanding Eligibility: The 40-Credit Rule
To qualify for Social Security benefits, you need to earn 40 credits over your working life. This typically means you’ve worked and paid Social Security taxes for at least ten years. In 2024, you’ll earn one credit for every $1,730 you make, up to four credits per year.
Your benefit amount is calculated based on your highest 35 years of earnings. Any years without income count as zero, which can significantly lower your average and, consequently, your benefit.
Who Are the “Never Beneficiaries”?
Several groups fall into the category of never beneficiaries:
- Older Immigrants: Nearly half (49%) of new beneficiaries are immigrants who arrived in the U.S. later in life and haven’t accumulated enough work credits.
- Infrequent Workers: About 38.9% are individuals who haven’t consistently participated in the workforce. This includes people who took extended time off to raise children, care for family members, or face long-term unemployment.
- Jobs Not Covered by Social Security: Approximately 10.8% work in positions exempt from Social Security taxes, such as certain state and local government jobs. While they don’t pay into Social Security, they often receive pensions from their employers.
- Railroad Employees: Railroad workers don’t receive Social Security but have their own benefits through the Railroad Retirement Board, provided they have more than ten years of service.
- Early Deaths: A small portion (1.3%) pass away before they become eligible to claim benefits at age 62.
The Impact of Not Receiving Benefits
Missing out on Social Security can significantly affect your retirement plans. Social Security provides a safety net that helps cover basic living expenses. Without it, you may need to rely more heavily on personal savings and pensions or continue working longer than anticipated.
Steps to Secure Your Benefits
If you’re concerned about your eligibility, there are several actions you can take:
- Continue Working to Earn Credits: If you haven’t reached 40 credits, consider delaying retirement and continuing to work. Each additional year can bring you closer to qualifying.
- Check for Eligibility Under Spousal Benefits: If you’re divorced and were married for at least ten years, you might be eligible for spousal benefits based on your ex-spouse’s work record, even if you haven’t remarried. This doesn’t affect your ex’s benefits, and they won’t be notified.
- Explore Disability Benefits: If you’re unable to work due to a disability, you may qualify for Social Security Disability Insurance (SSDI), which can provide financial assistance before you reach retirement age.
- Utilize Totalization Agreements: Immigrants from one of the 30 countries with which the U.S. has a totalization agreement can combine work credits from both countries to qualify for benefits. You’ll need at least six U.S. credits to take advantage of this option.
- Verify Your Work Record: Regularly check your Social Security Statement to ensure your earnings have been correctly reported. Mistakes can happen, and unreported income can reduce your future benefits.
What If You’re Living Abroad?
U.S. citizens residing in certain countries may face restrictions on receiving Social Security payments. Countries like Azerbaijan, Belarus, Cuba, Kazakhstan, Kyrgyzstan, North Korea, Tajikistan, Turkmenistan, and Uzbekistan have specific rules.
While some nations have exceptions, Cuba and North Korea have strict prohibitions. If you’re living overseas, you can use the SSA’s Payments Abroad Screening Tool to check your eligibility.
Read More: Should Social Security Extend to Illegal Immigrants?
Maximizing Your Social Security Benefits
Beyond just qualifying, it’s essential to maximize the benefits you receive:
- Work at Least 35 Years: Aim to have earnings for at least 35 years to avoid zeros in your benefit calculation.
- Delay Claiming Benefits: If possible, delay claiming Social Security past your full retirement age (between 66 and 67, depending on your birth year). Benefits increase by about 8% for each year you delay up to age 70.
- Understand Tax Implications: Be aware that Social Security benefits may be taxable depending on your overall income. Planning can help minimize taxes and maximize your net benefit.
Planning Is Key
If you’re an infrequent worker or a recent immigrant, don’t wait to address potential gaps in your Social Security eligibility. Here’s what you can do:
- Use SSA Tools: Visit the SSA website to check your eligibility and use the Retirement Estimator to plan for the future.
- Consult a Financial Advisor: Professional guidance can help you navigate complex situations and explore all available options.
- Stay Informed: Keep up-to-date with Social Security rules and regulations, as changes can occur that might affect your eligibility or benefits.
Conclusion
Social Security remains a cornerstone of retirement planning for many Americans. Understanding the eligibility requirements and taking proactive steps to secure your benefits is crucial. Whether it’s earning additional credits, exploring spousal benefits, or strategically planning your retirement age, every action counts. Don’t leave your retirement to chance—take control of your financial future today.