Americans who will not qualify for Social Security retirement benefits are relatively rare, but if you are one of them, you need to know so you can make sure you have other sources of retirement income.
You are most likely to fall into this group if you are an immigrant who arrived in the United States when you were 50 or older. These Americans have had significantly less time than native-born Americans and younger arrivals to earn the 40 work credits needed to qualify for benefits. But they are not the only ones who will not qualify.
Americans Who Won't Get Social Security
1. Workers with Too Few Social Security Credits
A minimum requirement to collect Social Security retirement benefits is performing enough work to earn 40 Social Security credits. Roughly, 40 credits equals 10 years of work. More specifically, in 2017, an individual receives one credit for each $1,300 in income, and they can earn a maximum of four credits per year.
If you earn the federal minimum wage of $7.25 an hour, you’ll need 179.3 hours of work to receive one credit toward Social Security. By working just 15 hours a week at this wage, you’ll earn the maximum credits per year. That means even those who work part-time so they can attend school or care for a child—or those who work part-time because they cannot find full-time work— can collect Social Security credits without too much trouble.
Earned credits never expire so anyone who has left the workforce with close to 40 credits might consider going back and doing the minimum additional work they need to qualify. You can check the number of credits you have using the information here.
2. Workers Who Die Before Age 62
The minimum age to start claiming Social Security retirement benefits is 62; those who die young will not receive the benefits they have earned. That does not necessarily mean their benefits will be lost, however. Dependent children and spouses may be entitled to survivor’s benefits. For example, at age 60, widows and widowers can begin receiving Social Security benefits on their deceased spouse’s record. Terminally ill patients can apply for Social Security Disability Income, which means they will still receive some benefit from their contributions to the system.
What if you are terminally ill and you’ve reached the minimum retirement age? If you are single, claiming right away may be the most sensible strategy. But if you have a spouse, postponing may your provide your spouse with greater benefits.
3. Certain Divorced Spouses
Some people’s spousal Social Security benefit will be higher than their own Social Security benefit—stay-at-home parents who relied on their spouse’s income to support the household. Those spouses will be at a disadvantage when claiming Social Security if their marriage lasts fewer than 10 years because they will not be eligible to claim Social Security benefits from their former spouse’s earning record. Instead, they will have to accumulate enough work credits on their own or rely on the earnings record of a new spouse.
4. Workers Who Retire in Certain Foreign Countries
U.S. citizens who travel to—or live in—most foreign countries after they retire can usually still receive Social Security benefits. But if that country is Azerbaijan, Belarus, Cuba, Georgia, Kazakhstan, Kyrgyzstan, Moldova, North Korea, Tajikistan, Turkmenistan, Ukraine, Uzbekistan or Vietnam, the government cannot send you Social Security payments. Exceptions may be available in all of these countries except Cuba and North Korea, however. Use the government’s Payments Abroad Screening Tool to see if you will be able to continue receiving Social Security benefits while living abroad.
5. Certain Legal Immigrants
Legal immigrants who have earned 40 Social Security work credits in the United States are eligible to receive full U.S. Social Security benefits. Immigrants who do not have enough U.S. credits but who come from one of the 26 countries with whom the United States has social security agreements or totalization agreements, can qualify to receive prorated benefits. These benefits are based on their work credits earned abroad combined with their U.S. work credits, an arrangement that is particularly helpful for older immigrants who are not likely to accumulate 10 years of work in the United States before retiring. Workers who have not earned at least six U.S. credits, however, cannot receive payments under totalization agreements.
6. Government Employees Who Don’t Pay Social Security Taxes
Federal government employees hired before 1984 may be grandfathered into the Civil Service Retirement System (CSRS), which provides retirement, disability, and survivor benefits. These workers do not have Social Security taxes deducted from their paychecks and are not eligible to receive Social Security benefits unless they have earned benefits through another job or a spouse. However, in these cases, CSRS pension payments may reduce Social Security benefit payments. Government workers who are covered by the Federal Employees Retirement System (FERS) are eligible for Social Security benefits.
State and local government employees, such as those who work for a state or local government agency—including a school system, college or university—will not receive Social Security benefits if they do not pay Social Security taxes, but they generally receive pension benefits from their employers. However, most state and local employees do have Social Security protection under a government law called a Section 218 agreement.
7. Self-Employed Tax Evaders
Self-employed workers pay self-employment tax to cover both the worker’s and the employer’s portion of Social Security contributions. The tax is calculated and paid each year when these workers file their federal tax returns. Those who do not file tax returns do not pay Social Security taxes, unlike employees whose employers withhold and remit their Social Security taxes from each paycheck.
If you have no record of paying into the system, you are not going to receive payouts. However, if you have successfully evaded taxes for a lifetime, you have no right to Social Security benefits. Your illegally retained untaxed earnings will have to fund your retirement.
8. Certain Immigrants Over 65
Retired people who immigrate to the United States will not have the 40 U.S. work credits they need to qualify for Social Security benefits. One way to rectify this problem is to earn six work credits in the United States and receive prorated U.S. benefits combined with prorated benefits from your former country under a totalization agreement. This solution makes sense for workers who also do not have enough benefits in their home country to qualify for that country’s equivalent of social security payments. In many cases, late-arriving immigrants come to the United States on family visas and rely on that family member for financial support.
Older immigrants who do not qualify for U.S. Social Security and whose countries’ laws allow them to receive benefit payments while residing in the United States can claim their social security or pensioner’s benefits while living abroad.
The Bottom Line
Almost all retirees in the United States do receive Social Security benefits when they retire. But those who have spent little time in the U.S. workforce, whether due to caregiving or working abroad, may not qualify. Some government workers are also not eligible. With luck, people who do not qualify for Social Security retirement benefits have another safety net they can count on, whether it’s a government pension, benefits from their home country, or a family member who supports them financially.