Question about earning Social Security credits

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StoneFeeler
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Question about earning Social Security credits

Post by StoneFeeler »

Imagine a new immigrant to the US, aged 65. He/she gets a job or is self-employed as a consultant for 10 years - until age 75. Can he/she pay the Social Security and Medicare contributions during this period and then become eligible for Soc Sec and Medicare benefits?

I tried to search the web, but there were no links that directly answered this.

Thank you.
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Metsfan91
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Re: Question about earning Social Security credits

Post by Metsfan91 »

StoneFeeler wrote: Thu Nov 25, 2021 3:02 am Imagine a new immigrant to the US, aged 65. He/she gets a job or is self-employed as a consultant for 10 years - until age 75. Can he/she pay the Social Security and Medicare contributions during this period and then become eligible for Soc Sec and Medicare benefits?

I tried to search the web, but there were no links that directly answered this.

Thank you.
Yes, he/she needs to earn enough each year to get full 4 annual credits. For year 2021, a person needs to earn $1,470 for one social security credit... a person can get at most 4 credits annually.
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Soon2BXProgrammer
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Re: Question about earning Social Security credits

Post by Soon2BXProgrammer »

Metsfan91 wrote: Thu Nov 25, 2021 3:10 am
StoneFeeler wrote: Thu Nov 25, 2021 3:02 am Imagine a new immigrant to the US, aged 65. He/she gets a job or is self-employed as a consultant for 10 years - until age 75. Can he/she pay the Social Security and Medicare contributions during this period and then become eligible for Soc Sec and Medicare benefits?

I tried to search the web, but there were no links that directly answered this.

Thank you.
Yes, he/she needs to earn enough each year to get full 4 annual credits. For year 2021, a person needs to earn $1,470 for one social security credit... a person can get at most 4 credits annually.
While true, Medicare is either you get it or you don't. Social Security though is based on 35 years of earnings, and if one only has 10 years of earnings (we dont know if they are modest or not, but we still know its only 10), then the formula for the benefit will probably be for a modest amount.

I'm not saying they shouldn't work for 10 years to qualify, just they should calibrate their expectations regarding Social Security.
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JoeRetire
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Re: Question about earning Social Security credits

Post by JoeRetire »

StoneFeeler wrote: Thu Nov 25, 2021 3:02 am Imagine a new immigrant to the US, aged 65. He/she gets a job or is self-employed as a consultant for 10 years - until age 75. Can he/she pay the Social Security and Medicare contributions during this period and then become eligible for Soc Sec and Medicare benefits?

I tried to search the web, but there were no links that directly answered this.
For Social Security:
https://www.ssa.gov/ssi/text-entitle-ussi.htm

For Medicare:
https://www.hhs.gov/answers/medicare-an ... index.html
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sycamore
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Re: Question about earning Social Security credits

Post by sycamore »

Soon2BXProgrammer wrote: Thu Nov 25, 2021 8:40 am
Metsfan91 wrote: Thu Nov 25, 2021 3:10 am
StoneFeeler wrote: Thu Nov 25, 2021 3:02 am Imagine a new immigrant to the US, aged 65. He/she gets a job or is self-employed as a consultant for 10 years - until age 75. Can he/she pay the Social Security and Medicare contributions during this period and then become eligible for Soc Sec and Medicare benefits?

I tried to search the web, but there were no links that directly answered this.

Thank you.
Yes, he/she needs to earn enough each year to get full 4 annual credits. For year 2021, a person needs to earn $1,470 for one social security credit... a person can get at most 4 credits annually.
While true, Medicare is either you get it or you don't. Social Security though is based on 35 years of earnings, and if one only has 10 years of earnings (we dont know if they are modest or not, but we still know its only 10), then the formula for the benefit will probably be for a modest amount.

I'm not saying they shouldn't work for 10 years to qualify, just they should calibrate their expectations regarding Social Security.
+1.

The benefit will be modest compared to someone with 35 years' earnings. Another thing to keep in mind is you get the most "benefit bang" for the "earnings buck" with the first $1024 dollars you earn - about 90%. So if someone wants to maximize their SS benefits in a limited amount of time, it helps to understand the "bend points" used in calculations -- see https://www.ssa.gov/OACT/COLA/piaformula.html -- and try to reach the first bend point.
ModifiedDuration
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Re: Question about earning Social Security credits

Post by ModifiedDuration »

sycamore wrote: Thu Nov 25, 2021 10:38 am
The benefit will be modest compared to someone with 35 years' earnings. Another thing to keep in mind is you get the most "benefit bang" for the "earnings buck" with the first $1024 dollars you earn - about 90%. So if someone wants to maximize their SS benefits in a limited amount of time, it helps to understand the "bend points" used in calculations -- see https://www.ssa.gov/OACT/COLA/piaformula.html -- and try to reach the first bend point.
+1

Great “bang for the buck” when your monthly earnings average over 35 years is below that first bend point at $1,024.

Roughly, if you have $420,000 in social security earnings, which would yield average earnings of $1,000 a month over 35 years, then you would have a monthly benefit of about $900 a month (90% of $1,000).
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Re: Question about earning Social Security credits

Post by Eagle33 »

ModifiedDuration wrote: Thu Nov 25, 2021 10:50 am
sycamore wrote: Thu Nov 25, 2021 10:38 am
The benefit will be modest compared to someone with 35 years' earnings. Another thing to keep in mind is you get the most "benefit bang" for the "earnings buck" with the first $1024 dollars you earn - about 90%. So if someone wants to maximize their SS benefits in a limited amount of time, it helps to understand the "bend points" used in calculations -- see https://www.ssa.gov/OACT/COLA/piaformula.html -- and try to reach the first bend point.
+1

Great “bang for the buck” when your monthly earnings average over 35 years is below that first bend point at $1,024.

Roughly, if you have $420,000 in social security earnings, which would yield average earnings of $1,000 a month over 35 years, then you would have a monthly benefit of about $900 a month (90% of $1,000).
The new 65 year old immigrant to the US, assuming s/he earns a net $12k/year in consulting work will reach SS earnings of $120k @75, which we divide by 420 months times 90% resulting in about a $257 monthly SS benefit.
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Re: Question about earning Social Security credits

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Eagle33 wrote: Thu Nov 25, 2021 4:53 pm The new 65 year old immigrant to the US, assuming s/he earns a net $12k/year in consulting work will reach SS earnings of $120k @75, which we divide by 420 months times 90% resulting in about a $257 monthly SS benefit.
Right. In order to achieve an average monthly earnings of $1K in just 10 years, you'd need to pull in a total of $420K, which would be $42K per year or about $3500 per month (after wage indexing). Thus illustrating the point made above that someone working for only 10 years needs a much higher income to achieve the same benefit as someone working for 35 years.
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Metsfan91
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Re: Question about earning Social Security credits

Post by Metsfan91 »

Soon2BXProgrammer wrote: Thu Nov 25, 2021 8:40 am
Metsfan91 wrote: Thu Nov 25, 2021 3:10 am
StoneFeeler wrote: Thu Nov 25, 2021 3:02 am Imagine a new immigrant to the US, aged 65. He/she gets a job or is self-employed as a consultant for 10 years - until age 75. Can he/she pay the Social Security and Medicare contributions during this period and then become eligible for Soc Sec and Medicare benefits?

I tried to search the web, but there were no links that directly answered this.

Thank you.
Yes, he/she needs to earn enough each year to get full 4 annual credits. For year 2021, a person needs to earn $1,470 for one social security credit... a person can get at most 4 credits annually.
While true, Medicare is either you get it or you don't. Social Security though is based on 35 years of earnings, and if one only has 10 years of earnings (we dont know if they are modest or not, but we still know its only 10), then the formula for the benefit will probably be for a modest amount.

I'm not saying they shouldn't work for 10 years to qualify, just they should calibrate their expectations regarding Social Security.
Soon2BXProgrammer- I don't think I understand what you are saying regarding Medicare. Is Medicare not guaranteed for anyone 65 and older and has locked in 40 social security credits?

StoneFeeler - if your hypothetical 65 years old new immigrant, a greencard holder, works 10 years and earns 40 social security credits, he/she will be eligible for both social security payment and Medicare...I haven't seen any disqualifying reason for this scenario.
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Soon2BXProgrammer
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Re: Question about earning Social Security credits

Post by Soon2BXProgrammer »

Metsfan91 wrote: Thu Nov 25, 2021 7:28 pm
Soon2BXProgrammer wrote: Thu Nov 25, 2021 8:40 am
Metsfan91 wrote: Thu Nov 25, 2021 3:10 am
StoneFeeler wrote: Thu Nov 25, 2021 3:02 am Imagine a new immigrant to the US, aged 65. He/she gets a job or is self-employed as a consultant for 10 years - until age 75. Can he/she pay the Social Security and Medicare contributions during this period and then become eligible for Soc Sec and Medicare benefits?

I tried to search the web, but there were no links that directly answered this.

Thank you.
Yes, he/she needs to earn enough each year to get full 4 annual credits. For year 2021, a person needs to earn $1,470 for one social security credit... a person can get at most 4 credits annually.
While true, Medicare is either you get it or you don't. Social Security though is..
Soon2BXProgrammer- I don't think I understand what you are saying regarding Medicare. Is Medicare not guaranteed for anyone 65 and older and has locked in 40 social security credits?
I had bad grammar, I was trying to distinguish between Medicare being all or nothing, and it's earned after 40 credits whereas SS might only start with a meager benefit after those credits. If one literally made exactly 40 credits say 6ish thousand a year for 10 years while they would get Medicare, their SS benefit would be pathetic
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StoneFeeler
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Re: Question about earning Social Security credits

Post by StoneFeeler »

Thank you all for the clarifications.

My takeaways:

1. There is no bar on earnings credits from ages 65 to 75 for SS and Medicare.

2. If the person earns 40 credits between the ages of 65 and 75, he/she will be eligible for Medicare, even if each credit is small (due to low earnings) as long as it is above the minimum required.

3. Of course, the SS pension would be smaller for A who has 10 years' of credits compared to B with 35 years' of credits. But then, A has contributed only for 10 years. So I think A's IRR should still be great.

Thanks again.
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Eagle33
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Re: Question about earning Social Security credits

Post by Eagle33 »

I don't know what level of premium penalties that may be applicable at 75 since was not eligible at 65. Just something to look into.
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mnnice
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Re: Question about earning Social Security credits

Post by mnnice »

It’s not all or nothing though. People with zero to 29 credits can buy into Medicare if they are citizens or green card holders. People with 30 to 39 credits can buy in at a discounted rate. Potentially it would be better to have an employer or ACA plan of working than Medicare anyway.
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Re: Question about earning Social Security credits

Post by EddyB »

mnnice wrote: Sat Nov 27, 2021 3:44 pm It’s not all or nothing though. People with zero to 29 credits can buy into Medicare if they are citizens or green card holders. People with 30 to 39 credits can buy in at a discounted rate. Potentially it would be better to have an employer or ACA plan of working than Medicare anyway.
Also, the OP should consider whether any treaty applies. People who work across multiple nations may find that contributions in one have an effect on eligibility or benefit in the other, or that the typical rules are otherwise altered by treaty.
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StoneFeeler
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Re: Question about earning Social Security credits

Post by StoneFeeler »

Eagle33 wrote: Sat Nov 27, 2021 2:44 pm I don't know what level of premium penalties that may be applicable at 75 since was not eligible at 65. Just something to look into.
May I check which premium penalties you are referring to? For Medicare? If a person is not eligible at 65, I would have thought it is not fair to ask them to pay a penalty rate in the future, particularly when the remaining life expectancy would be shorter - am I not right?

Thanks
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Eagle33
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Re: Question about earning Social Security credits

Post by Eagle33 »

StoneFeeler wrote: Sun Nov 28, 2021 10:45 pm
Eagle33 wrote: Sat Nov 27, 2021 2:44 pm I don't know what level of premium penalties that may be applicable at 75 since was not eligible at 65. Just something to look into.
May I check which premium penalties you are referring to? For Medicare? If a person is not eligible at 65, I would have thought it is not fair to ask them to pay a penalty rate in the future, particularly when the remaining life expectancy would be shorter - am I not right?

Thanks
Like I said "I don't know...". However, personally I would not assume that there are no penalties. Instead I would try to get confirmation your assumption is true - something from Medicare that provides written confirmation.
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Re: Question about earning Social Security credits

Post by 123 »

From the Medicare people: https://www.medicare.gov/Pubs/pdf/11036 ... Part-B.pdf

Can I get Part B if I don’t have Part A?

If you aren’t eligible for free Part A, you can buy Part B without having to buy Part A, if you’re:
■ 65 or older
■ A resident of the U.S., and one of these:
—a U.S. citizen
—an immigrant lawfully admitted for permanent residence
who has lived in the U.S. without a break for the 5-year
period immediately before the month you file for
enrollment in Part B
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