Although they are not guaranteed, Social Security benefits are a lifeline for millions of seniors. Only some people may get Social Security benefits, and if you don’t, you might need to save more money than you think to get by in retirement.
It’s essential to confirm if you are eligible to get your benefits if you plan to rely on them in retirement. If you belong to one of these three categories, you could not be eligible for any Social Security payments.
Self-Employed Tax Evaders
Self-employed individuals must pay self-employment tax to cover their personal Social Security contributions and the employer’s share. When self-employed individuals file their federal tax returns, the tax is computed and paid annually.
Contrary to employees whose employers deduct and send Social Security taxes from each paycheck, Investopedia said those who do not submit tax returns do not pay taxes.
These taxpayers will only benefit if they have a history of funding the system. They do not qualify for Social Security payments if they have dodged taxes and never disclosed their income.
You’re One Of These Government Employees
There are several state, county, and municipal exclusions for workers who do not receive benefits, despite the fact that the government normally looks out for its employees. Instead, these workers contribute to and get benefits from state-funded pension programs. GoBankingRates said these consist of:
- Employees of the United States government hired before 1984: They receive pensions under the previous Civil Service Retirement System.
- Railroad workers: They have a pension plan that dates back to the 1930s.
- Foreign nationals who are employed by their home countries as ambassadors or by international organizations like the United Nations while they are abroad in the United States
- Most first responders in the safety field, including police and firemen
- Many K–12 educators
Not Enough Credits
The same GoBankingRates report, citing the American Association of Retired People, said a person should accrue “credits” via employment to pay their way into the system and qualify for these benefits.
The Social Security Administration states that the maximum number of credits a person may obtain in a calendar year is four. For somebody to be eligible for any Social Security income, they must have 40 credits. Therefore, you might only qualify for these rewards if you have put in enough labor to obtain all 40 credits.
Make sure you are eligible for the benefits before retiring. Verify your eligibility once again, and see whether you have any outstanding debts that could impact your benefits.
By conducting your research now, you may steer clear of any unexpected issues in retirement and make the most of your golden years.