Another Dumb Social Security Question

[Charlie_Boy]

Another Dumb Social Security Question perhaps. I apologize ahead but a quick search I could not find the answer. Wife just received her Social Security Statement and that shook her up a bit.

Her background: Born, raised, and worked in Japan but we met and married and she became an American citizen. For awhile she had an arts and crafts business, never made much, but paid her business and Social Security taxes. On the statement she just received it says she has 35 credits but needs at least 40 credits for retirement, disability, and Medicare. I am an old guy and receive Social Security and Medicare and we assumed that she too will receive Social Security and Medicare when the time comes based on my employment history. Is this correct?

 

[REWahoo]

Check this out: https://www.ssa.gov/planners/retire/applying6.html

Even if you have never worked under Social Security, you may be able to get spouse’s retirement benefits if you are at least 62 years of age and your spouse is receiving retirement or disability benefits. You can also qualify for Medicare at age 65.

 

[Charlie_Boy]

Thank you. We believed and had heard that was the case but the statement caused her some concern and thought we should those in the know.

 

[Hyperborea]

She can claim half of yours without having enough credits to file on her own. She can also use the Japan-US Social Security agreement to use Japanese credits to qualify for US social security but that may be less than half of yours. She might also be eligible for a Japanese social security payment though that would reduce her US SS payment (by as much as a half of what she gets in the other system).

https://www.ssa.gov/international/agreements_overview.html

 

[REWahoo]

On the statement she just received it says she has 35 credits but needs at least 40 credits for retirement, disability, and Medicare.

This statement is referring to her ability to qualify for SS benefits on her own work record. The statement from the SS website I quoted earlier indicates she can qualify for benefits as your spouse just as you had previously understood.

IOW, don't worry, be happy!

 

[NYEXPAT]

In addition to the other ideas, Your Wife can purchase the 5 credits she needs.

 

[REWahoo]

In addition to the other ideas, Your Wife can purchase the 5 credits she needs.

I don't believe this is accurate information. There is no legal way to purchase SS credits.

 

[MichaelB]

Another Dumb Social Security Question perhaps. I apologize ahead but a quick search I could not find the answer. Wife just received her Social Security Statement and that shook her up a bit.

Her background: Born, raised, and worked in Japan but we met and married and she became an American citizen. For awhile she had an arts and crafts business, never made much, but paid her business and Social Security taxes. On the statement she just received it says she has 35 credits but needs at least 40 credits for retirement, disability, and Medicare. I am an old guy and receive Social Security and Medicare and we assumed that she too will receive Social Security and Medicare when the time comes based on my employment history. Is this correct?

My DW is also a US citizen born and raised elsewhere. She worked, but never in the US, and has no Social Security credits. She just registered for Medicare, and will register for her SS pension when I take mine. The only thing different about her signing up vs someone else was she needed to provide documents proving her US citizenship and also her marriage to me.

 

[aaronc879]

I don't believe this is accurate information.

I think this is what he meant by "purchase" the SS credits: You can claim self employment income high enough to get up to 4 credits per year. Then pay the self employment tax on that income. So if you need 4 credits then in 2017 you need to make $5200(1300/credit). Self employment tax on that is around $700. So for $700 you can get 4 credits in one year. You didn't actually earn this money so I don't think this is legal but I have heard of it being done.

 

[MichaelB]

Filing a false income tax return is a federal crime. The SSA will also pursue and prosecute. In the case of the OP there is no advantage to doing this, as his wife is already eligible for a SS pension and Medicare based on his work record.

 

[Drake3287]

I recently had a conversation with SS about my situation which is a lot like yours. I worked for a local state government and never paid into SS or Medicare for 35 years before recently retiring. Government's are not required to pay into SS and only employees hired after 1985 or so even have to pay into Medicare.

My problem is Medicare is required by my old employer when I hit 65 at which point my employer paid medical coverage becomes secondary. Not having paid into SS or Medicare all those years I was a little worried.

Turns out that as long as a spouse qualifies for Medicare, the other spouse simply gets it automatically under the others account. For me I'm covered. I'm guessing your wife will get it under your name.

Also, if I didn't already have a generous retirement plan, I would get SS under my wife's name automatically even if I never paid a dime into it. In my case I make to much in retirement to qualify for it.

 

[PERSonalTime]

I know someone with the same situation as Drake3287 and she had the same outcome as Drake's.

 

[Chuckanut]

It's that word "Social' in Social Security that is sometimes overlooked.

Because of it we have our spouses getting SS benefits and sometimes dependents getting benefits also. it also means that lower income people get a bigger bang per buck for their SS contributions than wealthier people.

 

[Drake3287]

For most government employees receiving a public retirement, they are often surprised when they hit SS age and find out they only qualify for a reduced SS benefit even though they reached the full 4 quarters required.

Many like myself paid into SS for years before being hired by a government agency but will never see a cent of the SS money they paid in. Even if your just shy of that 4 quarter mark you get nothing. I guess for some it's worth getting a part-time job in order to reach that 4 quarter mark, thus receiving a small SS benefit to go along with a pension check.

 

[Hyperborea]

For most government employees receiving a public retirement, they are often surprised when they hit SS age and find out they only qualify for a reduced SS benefit even though they reached the full 4 quarters required.

Many like myself paid into SS for years before being hired by a government agency but will never see a cent of the SS money they paid in. Even if your just shy of that 4 quarter mark you get nothing. I guess for some it's worth getting a part-time job in order to reach that 4 quarter mark, thus receiving a small SS benefit to go along with a pension check.

You need 40 quarters (10 years).

4 quarters == 1 year.

 

[Drake3287]

Correct. Like many, I worked from age 18 to 23 paying into SS and Medicare before being hired by a government agency at age 23. Having retired at age 54 with a CALPers retirement, I'd have to go back to work in a non government job for another 5 years in order to collect a reduced SS benefit.

For most people it's not worth it. I guess for someone close to that 40 quarter mark it would make sense to go back to work in order to get the benefit.

 

[Chuckanut]

Correct. Like many, I worked from age 18 to 23 paying into SS and Medicare before being hired by a government agency at age 23. Having retired at age 54 with a CALPers retirement, I'd have to go back to work in a non government job for another 5 years in order to collect a reduced SS benefit.

I remember years ago being in a pension plan that had a 10 year vesting period. Leave one day early and get nothing. After 10 years one was fully vested. So, it was not just SS. That seemed to be the way things were long ago.

Our retirement savings system needs a lot of changes to catch up with modern employment practices and lifestyles.

 

[CardsFan]

Correct. Like many, I worked from age 18 to 23 paying into SS and Medicare before being hired by a government agency at age 23. Having retired at age 54 with a CALPers retirement, I'd have to go back to work in a non government job for another 5 years in order to collect a reduced SS benefit.

For most people it's not worth it. I guess for someone close to that 40 quarter mark it would make sense to go back to work in order to get the benefit.

So, after 31 years in government, is your pension less than SSI? Don't think so. I don't get the gripe. You got a better deal.

First 12 years I worked, no pension because I never hit the the vesting years. Finally figured out I better save for myself. No pension, but FIRE'd.

SSI will be gravy.

 

[Chuckanut]

Here's an interesting take on SS IRR:

Social Security Return on Investment - Go Curry Cracker!

Want to maximize your IRR from Social Security (not your payment, your IRR) then the author recomends this:

If we wanted to maximize return on our Social Security investment (taxes), we could (in theory):
– never work (in the US) until 10 years before SS eligibility
– work for no more than 10 years (minimum qualifying credits)
– earn no more than $360k (top of the 90% “bend point”)
– start receiving SS benefits immediately upon qualification (after 10 years of work)

 

[Drake3287]

No gripe, just an interesting fact as I look into SS and Medicare down the road for myself. It's not like I didn't pay into my pension with my money also.

With most if not all pensions, it takes a certain period of time to be vested (5 years in my case) but if you leave prior to that date you still get your contribution back.