Saturday, October 10, 2009

R2I - How can I get my Social Security benefits/money?

Are you planning to Return to India (R2I)? Are you wondering whether you'll be eligible for the Social Security Benefits when you retire? This blog post is aimed at answering some of your concerns/questions regarding Social Security benefits/account. I've compiled it like a FAQ for easy reading.
  • Can I get my Social Security contributions when I return back to India?
          No
  • Will I be eligible for Social Security benefits when I reach the retirement age?
          It depends. You should've got atleast 40 credits for you to be eligible for Social Security benefits.
  • How do I earn a Social Security Credit?
          According to SSA website "When you work and pay Social Security taxes, you earn up to a maximum of four credits for each year" For more details look at Social Security website.
  • How long would it take for me to earn 40 credits?
          It would approximately take 10 years for you to earn 40 credits.

          "The amount of earnings it takes to earn a credit changes each year. In the year 2009, you must earn $1,090 in covered earnings to get one Social Security or Medicare work credit and $4,360 to get the maximum four credits for the year". Refer to Social Security website for up to date information.
  • How do I notify Social Security Administration (SSA) about my change in address?
          SSA doesn't maintain your address records if you are not getting benefits currently (i.e., until you reach your retirement age). SSA gets the information from IRS (Internal Revenue Service). So, keep the IRS informed about your change of address. You can notify IRS regarding the address change by using Form 8822.
  • Will I get my SSA benefits when I reach the retirement age?
          Yes, according to the SSA website - if you have earned 40 credits.
  • Will I get my SSA benefits even if I'm not in US during my retirement?
          Yes (You can read the "Your Payments while you are outside US" question in SSA website)
  • Will I get my SSA benefits, even if I am NOT a US Citizen? (added later based on readers' feedback)
          Yes. You'll get your SSA benefits, even if you are NOT a US citizen, during your retirement.

          Assuming that you are going to Return to India (with or without US Citizenship, doesn't matter), you  *ARE* eligible for SSA benefits if you have 40 credits. You can find more details here at SSA website

          India is one of the countries listed under "You are a citizen of one of the countries listed below, and the worker on whose record your benefits are based lived in the United States for at least 10 years or earned at least 40 credits under the U.S. Social Security system. If you are receiving benefits as a dependent or survivor ..."

  • Will I have to lose my Social Security savings, if I don't live in US for 10 years?
          Unfortunately, yes! You have to lose your SS savings, if you don't live in US for 10 years. India is still working with the US government for Indian citizens to 'transfer' the credit to Indian pension plan. But, this is definitely going to take a lot of time.
  • How do I apply for SSA benefits when I reach my retirement age?
          Contact your nearest US embassy/consulate. They'll assist you with the process.
  • How can I lock my SSN?
          Read the blog post How to apply for Credit Freeze during R2I?
  • Where can I find more information regarding Social Security Questions?
          http://www.ssa.gov/

Note: The information included in this blog post is subject to change. Please read the FAQs in SSA website to get the up-to-date information

Related Posts:


R2I Checklist - 25 things to do
How to apply for Credit Freeze during R2I?

20 comments:

  1. Will I get my SSA benefits even if I'm not in US during my retirement?

    This question needs further clarfication.
    1) US citizen living outside US after getting 40 credits.
    2) Non US citizen living outside after getting 40 credits.

    ReplyDelete
  2. Hi Chitu,

    Yes. You'll get your SSA benefits, even if you aren't in US during your retirement.

    Assuming that you are going to Return to "India" (with or without US Citizenship, doesn't matter), you *ARE* eligible for SSA benefits if you have 40 credits.

    You can find more details in SSA website:

    http://www.ssa.gov/pubs/10137.html#what

    India is one of the countries listed under "You are a citizen of one of the countries listed below, and the worker on whose record your benefits are based lived in the United States for at least 10 years or earned at least 40 credits under the U.S. Social Security system. If you are receiving benefits as a dependent or survivor ..."

    ReplyDelete
  3. Saro,

    Correct me if I am wrong but it is for dependants or survivors, and not for the actual person...

    Thx.
    Desi

    ReplyDelete
  4. Please look at the
    "What happens to your right to Social Security payments when you are outside the United States?" section.

    You (the actual person), is eligible for Social Security benefits, even if you are outside India. US Citizenship is not a must. The expectation is that you should've had 40 credits.

    ReplyDelete
  5. Saro,

    Is it that SS calculates benefits on average income of 35 years?

    So if I have had earned exactly 40 points, at retirement, I will be getting lesser than expected?
    Thx.
    Desi

    ReplyDelete
  6. Hi Desi,

    Yes. You are right. Your SS benefits are calculated based on the "average indexed monthly earnings during the 35 years in which you earned the most"

    http://www.ssa.gov/pubs/10070.html

    If you have just 40 credits, you'll be paid less than what other folks (who worked for a longer period) would get.

    Thanks,
    Saro

    ReplyDelete
  7. Hi Saro, Thx for your reply. I am Indian Citizen planning to leave USA permanently after almost 10 years in USA.
    My question is can i leave my employer 401k (with Fidelity) as it is after leaving USA?

    Do I need to pay taxes in INdia every year on it?

    Thx.
    Desi

    ReplyDelete
  8. Hi Desi,

    Yes. You can leave the 401k (with Fidelity) as it is, when leaving USA. You don't have to pay any tax for that in India "every year". However, when you reach your retirement age (i.e., during your 401k withdrawal), you'll have to pay taxes.

    - Saro

    ReplyDelete
  9. Saro, You mean 401k withdrawl during retirement age is taxable in india as well as in USA (dual tax-20% in USA and 30% in India)?(if I would be in india during my retirement age)

    Thx.
    Desi

    ReplyDelete
  10. Desi,

    Yes. Your 401k income would be taxed twice during your withdrawal - if you are an Indian resident at that time (i.e., after your RNOR period).

    http://www.nrirealtynews.com/nri-tax/faqs-nri-tax.php

    Thanks,
    Saro

    ReplyDelete
  11. Saro,

    Thanks for this and many informative posts. I was specifically looking at the 40 point qualification. I am an Indian citizen, R2Iing this year (2010) and have 40 points, but no GC. From your post and links to SSA, I learn that I will be eligible at retirement age with my 40 points.

    Appreciate what you do.

    ReplyDelete
  12. Hi, You can also call Fidelity itself to get some guidance. In my case, I found out that my employer's 401K plan wasn't that attractive and so Fidelity recommended rolling it into an IRA[Individual Retirement Account] which had more options to invest in etc..

    ReplyDelete
  13. Saro,
    Very helpful site. Thanks for taking the time.
    Reg. 401 k tax, I think there is a tax treaty between India and US to avoid double taxation so there wont be double tax on that income.

    ReplyDelete
  14. Thanks for your comments. AFAIK, there is no tax treaty between India & US to avoid double taxation (after the RNOR period).

    Can you please point me to the appropriate article that provides these details? Thanks !

    - Saro

    ReplyDelete
  15. Saro,

    I'm sorry but I think you may be mistaken about SS benefits received by non-US citizens. If you look at the details on the SSA administration, they specifically say this
    "the worker on whose record your benefits are based"
    this simply means that if you are receiving benefits as a dependant of someone (the "worker") you will continue to receive SS. The scenario would be if someone's spouse dies after accumulating 40 credits, or if a child younger than 18 has lost a parent who has accumulated 40 credits

    All in all, the "worker" referred here is the person who earned the credits but not getting them for themselves but for dependants and survivors only.

    If you are not a US citizen, with 40 credits and 10 + years of work history, you will get nothing from SSA

    ReplyDelete
  16. SS Benefits are for you & your dependents. Hence, it has been worded like that. There are several discussions on this topic in R2I Club forums also. You can reach out to the experts.

    http://www.r2iclubforums.com/forums/showthread.php/3449-getting-social-security-after-r2i

    ReplyDelete
  17. Hi Saro,
    Very good site. lot of good information. I am in the US for 6 years and I have 24 SSN credits. Now I am planning for R2I, and I just knew that I have to have 40 points to get SSA benefits. Is it advisable to stay for another 4 years to get complete 40 points or it is not worth to wait? An early reply is really appreciated.Thanks.

    ReplyDelete
  18. You can look at the Social Security estimated payments calculator at the website below. This should give an idea of how much you would get every month when you retire (assuming that you are contributing to the social security every month till retirement, and Social Security Administration doesn't go bankrupt)

    http://www.vaughns-1-pagers.com/economics/ssa-monthly-payments.htm

    I'm not sure how much someone would get every month with just 40 credits (i.e., after 10 years of contribution).

    If you think you've made sound investments for your retired life, you don't have to depend on SSN credits. Btw., I did my R2I in 6.5 years and didn't wait for SSN credits :)

    ReplyDelete
  19. Saro, can the 40 qualifying credits be earned in separate work stints in the US? If I earned 20 during my first stint and then returned to the US after living elsewhere for 5 years and earned under 20, will I get SS benefits upon retirement?

    ReplyDelete