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emc011075
emc011075, Tax Adviser
Category: Social Security
Satisfied Customers: 2997
Experience:  Tax adviser IRS licensed Enrolled Agent and tax instructor
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I am planning on taking early retirement in 2017. I am

Customer Question

I am planning on taking early retirement in 2017. I am currently employed until August 2107 in Saudi Arabia. As allowed by law, I have not paid social security or any taxes since 2007 (I don't earn even near the $96,000 cut-off--I make). Since my earned income is nontaxble (about $46,00 year), could I apply and start social security before I stop working? Is nontaxable foreign income subject to social security earning limitations? If so, could I apply in August when I stop working and start receiving benefits from that point onwards? Would my in come form teh beginning of 2017 until then be counted against me?
Submitted: 8 months ago.
Category: Social Security
Expert:  emc011075 replied 8 months ago.

Hi. My name is ***** ***** I will be happy to help you.

If you are eligible for social security benefits or not will depends on how many credits you earned during your life time. You need 40 credits to qualify for social security benefits.

To earn social security credits you have to contribute to the social security by working for an employer covered by social security or paying self-employment tax. If you work and are paid in a foreign country you still earn social security credits if there's an social security agreement between US and that country.

You can earn up to 4 credit every year, so technically you need 10 years to contribute to the system to qualify for benefits.

I do not see Soudi Arabia on the agreement list so to qualify for social security benefits you will need to check your work history before 2007. You can do it online by login in into your social security online account or call or visit your local social security office once in US.

You can collect social security benefits as early as 62.

Customer: replied 8 months ago.
I qualify & I have erned enough credts. Do I have to stop working to begin to collect benefits at 62?
Expert:  emc011075 replied 8 months ago.

No you don't. You can apply for social security benefits as soon as 62 but your benefits will be permanently reduced by about 25%. You will receive your benefits for longer but your monthly premiums will be lower. In addition, before your full retirement age your social security benefits will be reduced by your earnings. If you earn more than 15,720 (in 2016), your SS benefits will be reduced by $1 for every $2 you earn.

Customer: replied 8 months ago.
I have a minor dependent eligible for benefits. Would her benefit amount be affected (reduced) if I make over the $15,720 (about $10,000 over) during the time I will work in 2017(6 months from my 62nd date)?
Expert:  emc011075 replied 8 months ago.

No. Your child's benefits belongs to your child, they will not be affected by your earnings.