Social Security is a lifeline for millions of retirees and other older Americans who are still in the workforce.
Making sure you qualify for every dollar you’ve got coming to you is not a step you want to skip — and believe it or not, Social Security is not guaranteed. In fact, there are more than a half-dozen ways that you could miss out on benefits that you were counting on and that you paid for with your tax dollars.
You Failed the Social Security Earnings Test
Early claimers who are still working have to pass the Social Security earnings test in order to qualify for benefits. There is no such test once you reach full retirement age. In 2021, the Social Security Administration (SSA) temporarily withheld $1 in benefits for every $2 earned over $18,960, although there’s a more forgiving monthly test for those entering the year of full retirement.
You Came Up Short on Credits
In order to receive Social Security payments, you have to first work for a certain amount of time, pay taxes into the system and build up enough “credits” to qualify for benefits. In 2021, you got one credit for every $1,470 in income earned, up to one credit per quarter or four credits per year. Most people must have 40 credits to receive Social Security benefits, which means you have to work for 10 years before you’re eligible.
You Have Debt That Qualifies For Garnishment
It’s hard for private lenders to snatch your Social Security payments, but your benefits can be garnished to satisfy certain kinds of other debts. Among them are alimony, child support and restitution, but the states determine what constitutes a valid order for garnishment. If your benefits have been garnished for any of these reasons, contact the appropriate state agency, not the SSA.
If you guessed that tax debt is one of the other exceptions, you would be correct. The Department of the Treasury can garnish up to 15% of your Social Security benefits every month until your tax debt is paid. The Treasury Department can also garnish your benefits for nontax debt, including any federal student loans you might have defaulted on.
You’re Covered Under the Civil Service Retirement System
Instead of paying into Social Security, some federal employees hired before 1984 have instead been contributing to the Civil Service Retirement System (CSRS). The CSRS was formed as part of the 1920 Civil Service Retirement Act and was replaced by the Federal Employees Retirement System (FERS) in 1987. CSRS recipients do not receive Social Security benefits unless they’re eligible through another job or through a spouse.
You’re Covered by the Railroad Retirement Act
Some railroad workers are also covered by a retirement system outside of Social Security and are ineligible for benefits. People who participate in the Railroad Retirement Act pay more of their salaries into the fund but receive higher payments when they retire — particularly “career employees” with at least 30 years on the job.
You Don’t Qualify for a Divorced Spouse’s Benefits
Some people are eligible to receive benefits on their former spouse’s records, but they have to meet certain qualifications first. You must have been married for 10 years or longer and you must not be remarried, although you can still qualify if your former spouse remarries. There are other requirements, too, so if you were planning on applying for benefits on a former spouse’s record, make sure you qualify first.
You Moved — Like, Far — in Retirement
In most cases, you can collect Social Security in another country if you live abroad in retirement, although you have to follow strict and specific rules from both the SSA and your host country. The SSA, however, is generally forbidden from sending payments to a handful of countries, but don’t worry. None of them are exactly beacons for U.S. retirees.
They include Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan and Uzbekistan. Some exceptions can be made for some eligible retirees in those countries, but you can never collect Social Security in Cuba and North Korea.
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