Social Security in the USA
#1
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Joined: Jan 2013
Posts: 46
Social Security in the USA
I could be facing the prospect of my employment ending in the USA in the next week or so and I have been working in this country since 2012. In this case, does anyone know if I am entitled to claim back the social security I have been paying with my salary?
#2
Re: Social Security in the USA
Generally speaking, and I think absolutely, no. .... There may be a certain visa type that allows you to opt out of SS, but even then I think you don't pay in, rather than claiming it back.
#4
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Re: Social Security in the USA
I am definitely paying Social Security Tax from my salary every 2 weeks.
#7
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Location: Cumbria to Northern Michigan
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Re: Social Security in the USA
You can't claim back the taxes you've paid but you will be entitled to Social Security payments when you reach retirement age. Usually you need 40 quarters (10 years) of payments to be entitled to social security, but under the UK-US totalization agreement that is reduced to 6 quarters, which you easily have.
I have no idea how you go about claiming that when you reach 62/67/70 (whatever age you decide to collect at), but you certainly should be entitled to it.
I have no idea how you go about claiming that when you reach 62/67/70 (whatever age you decide to collect at), but you certainly should be entitled to it.
#8
Re: Social Security in the USA
And to be noted that when you do claim it and live for the next 20 years, you will be getting back far more than you put in.
#9
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Re: Social Security in the USA
You can't claim back the taxes you've paid but you will be entitled to Social Security payments when you reach retirement age. Usually you need 40 quarters (10 years) of payments to be entitled to social security, but under the UK-US totalization agreement that is reduced to 6 quarters, which you easily have.
I have no idea how you go about claiming that when you reach 62/67/70 (whatever age you decide to collect at), but you certainly should be entitled to it.
I have no idea how you go about claiming that when you reach 62/67/70 (whatever age you decide to collect at), but you certainly should be entitled to it.
#11
Re: Social Security in the USA
No, just the way they determine what payments you're entitled to, again just like NI in the UK, which is only partly connected to what you paid in, in terms of cash, and is mostly connected to "years" of contributions.
Note, when the time comes to claim you will (under current rules, at least), be subject to a process called the "Windfall Elimination Provision" (WEP), which reduces your SS payments if you have other pension income, because the SS "formula" is very generous to those with very low income and/or few years of contributions, but ONLY if they have no other retirement income.
Note, when the time comes to claim you will (under current rules, at least), be subject to a process called the "Windfall Elimination Provision" (WEP), which reduces your SS payments if you have other pension income, because the SS "formula" is very generous to those with very low income and/or few years of contributions, but ONLY if they have no other retirement income.
#14
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Location: Cumbria to Northern Michigan
Posts: 28
Re: Social Security in the USA
Let's say you earn $100,000 per annum for 6 years. The average monthly earnings for SS purposes is 600,000/420 = $1,429. Under the WEP you get 40% of the first $885 and 32% of the remaining balance, giving a $528 monthly benefit. Over 20 years that amounts to $126,700.
Over the 6 years of working, you would have paid in $74,400 (6 x $100,000 x .124 - including the "employer" contribution, which ultimately comes from the employee's wages anyway). If you worked from the age of 41 to 47 then you have to wait 20 years to start drawing on the social security. If you could invest that $74,400 at 6%, that would give you $238,610 at age 67 - compared with $126,700 from social security. So not necessarily a slam dunk.
Of course you can change the assumptions above to come up with any answer you want!
#15
Re: Social Security in the USA
Running the numbers, it's not a bad return on investment (especially since it's guaranteed), but you have to take into account the time value of money also.
Let's say you earn $100,000 per annum for 6 years. The average monthly earnings for SS purposes is 600,000/420 = $1,429. Under the WEP you get 40% of the first $885 and 32% of the remaining balance, giving a $528 monthly benefit. Over 20 years that amounts to $126,700.
Over the 6 years of working, you would have paid in $74,400 (6 x $100,000 x .124 - including the "employer" contribution, which ultimately comes from the employee's wages anyway). If you worked from the age of 41 to 47 then you have to wait 20 years to start drawing on the social security. If you could invest that $74,400 at 6%, that would give you $238,610 at age 67 - compared with $126,700 from social security. So not necessarily a slam dunk.
Of course you can change the assumptions above to come up with any answer you want!
Let's say you earn $100,000 per annum for 6 years. The average monthly earnings for SS purposes is 600,000/420 = $1,429. Under the WEP you get 40% of the first $885 and 32% of the remaining balance, giving a $528 monthly benefit. Over 20 years that amounts to $126,700.
Over the 6 years of working, you would have paid in $74,400 (6 x $100,000 x .124 - including the "employer" contribution, which ultimately comes from the employee's wages anyway). If you worked from the age of 41 to 47 then you have to wait 20 years to start drawing on the social security. If you could invest that $74,400 at 6%, that would give you $238,610 at age 67 - compared with $126,700 from social security. So not necessarily a slam dunk.
Of course you can change the assumptions above to come up with any answer you want!