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Social Security Benefits Risk With R2I
Posted: Sat Jan 05, 2008 1:06 pm
by nelly
For those of us that are taking USC and are R2I'ing I ran into this tonight and it seemed like a curve ball. Searching on forums didn't return any meaning ful threads.
Reading the info from the link below, it's not clear to me what the impact is of R2I on me getting social security (as USC) when I retire -- not that I have too much hope of getting anything given the state social security is right now (but that's a different topic). Have any of you registered with the social security office or dealt with this?
Any experts out there and/or anyone that has already looked at this can shed more light. Here's the main link and a blurb from that page below.
http://www.socialsecurity.gov/pubs/10137.html#workoutside Work Outside The U.S. If you work or own a business outside the U.S. and are younger than
full retirement age, notify
the nearest U.S. Embassy or consulate or Social Security office right away. If you do not, it could result in a penalty that could cause the loss of benefits. This loss of benefits is in addition to benefits that may be withheld under one of the work tests explained on the following pages.
Social Security Benefits Risk With R2I
Posted: Sat Jan 05, 2008 1:48 pm
by Bobus
My understanding is that the foreign work test and the penalty for not reporting foreign work applies only to retirement beneficiaries (those receiving benefits) who have not attained full SS retirement age.
Social Security Benefits Risk With R2I
Posted: Sat Jan 05, 2008 2:11 pm
by nelly
Bobus;70103My understanding is that the foreign work test and the penalty for not reporting foreign work applies only to retirement beneficiaries (those receiving benefits) who have not attained full SS retirement age.[/quote]
Bobus,
Not so sure, check the highlighted text below (not hyperlinks ofcourse).
If you work or own a business outside the U.S. and are younger than full retirement age, notify the nearest U.S. Embassy or consulate or Social Security office right away. If you do not, it could result in a penalty
Looks like u have to register with them regardless of if u reach retirement age or not.
Are there any other benefits of social security that one could get BEFORE retirement that they might be referring to. I am not familiar them.
Social Security Benefits Risk With R2I
Posted: Sat Jan 05, 2008 2:13 pm
by Bobus
Nelly:
I read that in your original post, and also the "could".
Social Security Benefits Risk With R2I
Posted: Sat Jan 05, 2008 2:20 pm
by nelly
Bobus;70110Nelly:
I read that in your original post, and also the "could".[/quote]
ur right, :emembarrassed: it's late, i should sleep :) but thanks for catching it. :)
so if it could, does it mean we don't register? I guess I'll try to do some digging around. I have to go to the social security office to report my change in citizenship status, i will try to remember to enquire.
Social Security Benefits Risk With R2I
Posted: Sat Jan 05, 2008 2:40 pm
by Bobus
Bobus Rule: Bureaucrats do not use "may" or "could" when they can use "will" or "shall" to threaten the citizenry. :)
On a more serious note, please see
http://www.socialsecurity.gov/OP_Home/handbook/handbook.18/handbook-1828.html and note that penalty is tied to deductions for foreign work. These deductions are from foreign work test. What is this test?
First, even if a person works in the US during a year, and in the same year claims SS retirement benefits before attaining full retirement age, then the the benefits during that year are reduced for such work, based on dollars earned (beyond a limit) from work.
Now for such work abroad, the reduction in benefits is based not on dollars, but on hours worked to avoid calculations involved in converting foreign currency to USD. This is called the foreign work test.
If one is not claiming benefits during a year, the test does not kick in, so reduction in benefits and associated penalty for not reporting such work are moot.
Social Security Benefits Risk With R2I
Posted: Sat Jan 05, 2008 3:02 pm
by Bobus
Admin: Perhaps this thread can be merged with an appropriate existing SS thread, if you deem so.
Nelly: May I add that self-employment income abroad as sole proprietor is subject to SS taxes.
Regarding
nelly;70111
I have to go to the social security office to report my change in citizenship status, i will try to remember to enquire.[/quote]
feel free to ask, though you may get some dumb staff at the counter who may give some flippant response. I dread going to SS offices - perhaps some offices are not that bad - but the only time, long ago, on a snowy afternoon, that I went there was to drop my wife off at the office for her to file some form after she arrived in the US - and she was so fed up and tired with the experience that we ended up fighting with each other later that day - I think she did not like my escaping the music she had to endure there. :)
Social Security Benefits Risk With R2I
Posted: Sat Jan 05, 2008 8:50 pm
by moreqa
If you work outside US and report it to the embassy then is it a possibility that it would be counted towards the 40 credit points?
Social Security Benefits Risk With R2I
Posted: Sun Jan 06, 2008 12:48 am
by Bobus
moreqa;70129If you work outside US and report it to the embassy then is it a possibility that it would be counted towards the 40 credit points?[/quote]
Mere reporting will not help one earn credits.
To earn credits, SS tax needs to be paid to IRS, and there are rules about when such tax is applicable on work abroad, that have been discussed in another SS thread that deals with credits.