Author Topic: Earning social security credits  (Read 2278 times)

iluv2fly1

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Earning social security credits
« on: May 21, 2019, 02:11:06 PM »
I'm a longtime lurker, but I have a question for you guys now.

I recently discovered that I don't have nearly enough social security credits.  I  have worked abroad quite a bit and the time I was in the US I was studying -apparently graduate school stipends don't count for social security.  I am missing over 5 years!

Coming back to the US to earn them isn't really a good option because 1. I'm not sure I want to work 5 more years, 2. I am not really interested in returning to the US right now and 3. It would be very difficult for my husband to get a visa and a good job in the US.

So, I'm wondering if there are ways to earn Social Security credits from abroad.  I assume that this would require a part time remote job.  Are there companies that would be a good option to spend a small amount of time (I am working full time right now) just to earn enough to qualify? Are there options other than a remote job?

For context: I'm American with a European spouse. We are both close to 40 and live in Europe.  Finances are separate. He is probably technically FI already, but concerned because money is locked up in real estate that isn't producing.  All my money is invested in Vanguard index funds. I have about 15 times my (low) annual spending.  We are quite interested in leaving the 9-5 relatively soon, but we have been kicking around a number of ideas: SEMI FIRE, taking jobs in places we would like to live despite income reductions, taking a sabbatical, buying a business...  If our current jobs stay reasonable we may just stay here and get all the way to a reasonable FIRE number.  But, basically we are flexible and open to suggestions.  We will receive pensions here.  I could technically transfer mine to the US, but I don't really trust social security so would prefer not to.  I would really like to qualify in the US even if it is very small just in case I need to come back (especially important for Medicare which I have heard is the same).

So, do you have any ideas for me?  Thanks!

FIPurpose

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Re: Earning social security credits
« Reply #1 on: May 21, 2019, 02:16:29 PM »
I'm a longtime lurker, but I have a question for you guys now.

I recently discovered that I don't have nearly enough social security credits.  I  have worked abroad quite a bit and the time I was in the US I was studying -apparently graduate school stipends don't count for social security.  I am missing over 5 years!

Coming back to the US to earn them isn't really a good option because 1. I'm not sure I want to work 5 more years, 2. I am not really interested in returning to the US right now and 3. It would be very difficult for my husband to get a visa and a good job in the US.

So, I'm wondering if there are ways to earn Social Security credits from abroad.  I assume that this would require a part time remote job.  Are there companies that would be a good option to spend a small amount of time (I am working full time right now) just to earn enough to qualify? Are there options other than a remote job?

For context: I'm American with a European spouse. We are both close to 40 and live in Europe.  Finances are separate. He is probably technically FI already, but concerned because money is locked up in real estate that isn't producing.  All my money is invested in Vanguard index funds. I have about 15 times my (low) annual spending.  We are quite interested in leaving the 9-5 relatively soon, but we have been kicking around a number of ideas: SEMI FIRE, taking jobs in places we would like to live despite income reductions, taking a sabbatical, buying a business...  If our current jobs stay reasonable we may just stay here and get all the way to a reasonable FIRE number.  But, basically we are flexible and open to suggestions.  We will receive pensions here.  I could technically transfer mine to the US, but I don't really trust social security so would prefer not to.  I would really like to qualify in the US even if it is very small just in case I need to come back (especially important for Medicare which I have heard is the same).

So, do you have any ideas for me?  Thanks!

What?

Do you want your current country's system or the US's? Do you trust it or not? You'll have to expand on this more.

Bernard

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Re: Earning social security credits
« Reply #2 on: May 21, 2019, 02:28:54 PM »
First,
the (immigrant) "visa" (IR-1) for your husband would be easy, as long as you (1) either have family in the US willing to co-sign an Affidavit of Support (form I-864) in his behalf, or (2) you have sufficient assets to pull this off yourself.

To get this going, you'd file an I-130 petition for your husband with the USCIS. About 5 months later it will be approved, forwarded to the National Visa Center (NVC) and they contact you, ask for the I-864, accompanied by your latest federal income tax returns. If you haven't filed any, do it now, for at least 2018, 2017, and 2016, whether you owe a penny or not. You'd have to document your taxable income, or the lack thereof, either way. Since your income does not derive from US sources, you'd either need the aforementioned co-sponsor, or you can pull this off with assets 3 times the required income (if you don't have kids, that's only $21,137).

https://www.uscis.gov/i-864p

After he's been interviewed at the US consulate, he gets his IR-1 and, upon arrival in the US ("being admitted"), he's a Green Card holder and can rock 'n roll at his heart's desire.

There are still a few EU countries that do DCF, which is the abbreviation for Direct Consular Filing, which is a great deal easier. Since you forgot to mention in which country you live, I can't be more specific.

In any case, I have the feeling that this is not what you want to do. To answer your question, the only way to get SS credits is to earn US income in the Estados Unidos. Minimum income for 2018 to get all 4 credits was only $5,445, so you could just claim income in that amount on a 1099 form (starting 2019). You'd pay self-employment taxes on that amount, but that's it. It's the easiest way to collect the missing credits.
« Last Edit: May 21, 2019, 02:38:38 PM by Bernard »

iluv2fly1

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Re: Earning social security credits
« Reply #3 on: May 21, 2019, 02:33:43 PM »
It isn't either/or.  If you qualify in both, you get both. 

The problem is that it looks like I will not qualify in the US unless I change something.  I'm asking what options I have to earn social security credits in America ideally without returning to the US.  I believe that this is relevant to many people (especially as the number of digital nomads increases) so there may be options I haven't considered.

The trust thing isn't really important.  I truly hope there are no issues with social security -that is why I would like to qualify.

iluv2fly1

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Re: Earning social security credits
« Reply #4 on: May 21, 2019, 02:40:17 PM »
@Bernard I know that these are options, but it isn't ideal for us. Besides our personal feelings on where we want to live and the cost of that process, my husband's skills are not in demand in the US so he would probably take a massive pay cut to come to the US.  That is unlikely to be a good idea just to qualify for social security.

I think it will require working for a US company.  I just don't know if there are any US companies that hire remote staff (especially abroad) part time.  I suspect there may be some freelance type things out there that I could do as a side hustle, but don't know which ones are good/pay into social security.

iluv2fly1

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Re: Earning social security credits
« Reply #5 on: May 21, 2019, 02:56:13 PM »
I just saw your comment about the 1099 option.  That isn't a bad idea.  I certainly wouldn't want to do it now as that would probably mean paying extremely high European taxes twice (once when I earn it and then again when I "earn it as a self employed person" again). 

But that might work to earn some credits if we do a sabbatical where we aren't paying very high income taxes or something like that.  Certainly that is a good thing to consider after FIRE if I still don't have the credits.  I assume also that if I did come up with a side hustle earning some money, I could do that with it too.

PDXTabs

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Re: Earning social security credits
« Reply #6 on: May 21, 2019, 08:21:06 PM »
So, I'm wondering if there are ways to earn Social Security credits from abroad.  I assume that this would require a part time remote job.  Are there companies that would be a good option to spend a small amount of time (I am working full time right now) just to earn enough to qualify? Are there options other than a remote job?

If you work for a US firm that temporarily sends you to work in a country that has the right tax treaty you can get almost five years worth of credits (4.75 years?).

https://www.irs.gov/individuals/international-taxpayers/totalization-agreements
eg:
https://www.ssa.gov/international/Agreement_Pamphlets/documents/Portugal.pdf

But this is going to be difficult to pull off once you are already in Europe.

But also, if you work is covered by one of those treaty countries you may (in certain cases) get to add you credits together from the two countries (see both links).
« Last Edit: May 21, 2019, 08:24:04 PM by PDXTabs »

sui generis

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Re: Earning social security credits
« Reply #7 on: May 22, 2019, 06:04:32 PM »
I'm also down a lot of credits due to having worked for a long time for a government agency that had opted out of SS (to be fair, we had a substitute system, so I did not get screwed over).  I've definitely been framing it, as others here have referenced, as just missing earning about $5k per year for any 8 years (for me) over the course of the next 25-30 years.  I FIREd about 9 months ago and am earning no income at all currently.  But I'm kind of sanguine about it, because I feel like I have plenty of time.  And within the context of not knowing what SS will even look like in 3 decades, I don't see a need to rush to squeeze in that income ASAP where it doesn't come naturally.  Given that so many FIREees seem to have a hard time avoiding making some income at some point, I'm giving it more time before I feel like I have to really search for something *just* to earn those credits.  But I am keeping it on my radar. 

Life is a crazy ride and could very well lead you to situations where you easily end up earning those credits over the course of the the next few decades.  It's good you are trying to get your arms around what your options are for making it happen, though.

iluv2fly1

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Re: Earning social security credits
« Reply #8 on: May 23, 2019, 01:57:20 PM »
@Ilhamo that is definitely one of the things I am considering.  Especially since I have some time, it might not be that difficult to do it on and off.

Thank you guys for all the good advice.  I'm not too stressed about it since I am young as you said @sui generis, but it is a good thing for me to start thinking about.  If I'm on the lookout for a way to earn a little money specifically in the US or for an American company, some opportunities to earn a few credits might be easy to find.

secondcor521

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Re: Earning social security credits
« Reply #9 on: May 23, 2019, 02:47:27 PM »
I suspect there may be some freelance type things out there that I could do as a side hustle, but don't know which ones are good/pay into social security.

I am fairly certain that any wage or self-employment income in the US will count for Social Security.  Any freelance or side-hustle is probably done as an independent contractor, and if you make more than a certain nominal amount ($400 IIRC) they you would pay the social security taxes and those wages would count towards SS credits.

In other words, all "freelance type things" in the US pay into Social Security and count towards SS credits.