American workers who will not qualify for Social Security retirement benefits are relatively rare. But if you are one of them, it's important to know so you can secure other sources of income or determine whether it's still possible to become eligible.
What follows are the eight most common categories of workers who don't qualify for benefits.
- Some American workers do not qualify for Social Security retirement benefits.
- Workers who have not accrued the requisite 40 credits (roughly 10 years of employment) are not eligible for Social Security.
- Those who did not pay Social Security taxes, including certain government employees and self-employed individuals, are not eligible for Social Security.
- American expatriates retiring in certain countries—and some retired immigrants to the U.S.—cannot collect Social Security benefits.
- Divorced spouses married less than 10 years cannot claim their ex's benefits.
1. Workers With Too Few Social Security Credits
A minimum requirement to collect Social Security retirement benefits is performing enough work. The Social Security Administration (SSA) defines "enough work" as earning 40 Social Security credits. More specifically, in 2021, an individual receives one credit for each $1,470 in income, and they can earn a maximum of four credits per year. So, 40 credits are roughly equal to 10 years of work.
If you earn the federal minimum wage of $7.25 an hour, you'll need 202.75 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 amass 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 so far on the Social Security website.
2. Workers Who Die Before Age 62
The minimum age to start claiming Social Security retirement benefits is 62. If someone dies young, dependent children and spouses may be entitled to survivor benefits. At age 60, for example, widows and widowers can begin receiving Social Security benefits based on their deceased spouse's earnings record. Terminally ill patients can apply for Social Security Disability Income (SSDI), 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 provide your spouse with greater benefits.
If you do not qualify for Social Security payments, you will need to ensure you have sufficient income to support your lifestyle in retirement.
3. Certain Divorced Spouses
Divorced people can sometimes be entitled to half of an ex's Social Security benefits—typically, full-time homemakers or stay-at-home parents who didn't work and thus didn't accrue benefits on their own. Those spouses will be at a disadvantage if the marriage lasted fewer than 10 years because they are not eligible to claim Social Security benefits from their former spouse's earnings record. Only those divorcés who were married more than a decade can claim the ex-spouse's benefits—provided they are single, age 62 or older, and would receive less in benefits based on their own work record.
4. Workers Who Retire in Certain Foreign Countries
U.S. citizens who travel to—or live in—most foreign countries after they retire usually can 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 will not send them Social Security payments.
Exceptions may be available in all of these countries except Cuba and North Korea. 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. Certain Government Employees
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 so are not eligible to receive Social Security benefits.
They may still qualify if they have earned benefits through another job or a spouse; however, in these cases, CSRS pension payments may reduce Social Security payouts.
Government workers who are covered by the Federal Employees Retirement System (FERS), which replaced CSRS, are eligible for Social Security benefits.
Most state and local employees have Social Security protection under a government law called a Section 218 agreement. However, some of these workers, including those who work for a public school system, college, or university, will not receive Social Security benefits if they do not pay Social Security taxes. They generally receive pension benefits from their employers.
The most someone reaching full retirement age in 2021 can get in Social Security benefits per month.
7. Self-Employed Tax Evaders
Self-employed workers pay self-employment tax to cover both their own 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 not reported income and successfully evaded taxes for a lifetime, you have no right to Social Security benefits anyway. Your illegally retained untaxed earnings will have to fund your retirement.
8. Certain Immigrants Over Age 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 their 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.
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 stop working—assuming they've reached retirement age, of course. But those who have spent little time in the U.S. workforce, whether due to full-time homemaking or working abroad, may not qualify. Some government workers are also not eligible. With luck, though, some people who do not currently qualify can still find a way to do so.