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Thread: Help me with Social Security eligibility.

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    God/dess baer45's Avatar
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    Default Help me with Social Security eligibility.

    I have concerns about my social secuirty eligibility in the future. In order to purchase my own "insurance" for that, I would like to "get" W2 for 10 years. Obviously I would have other retirement plans. But I want to ask a few questions:

    "so long as you've worked for at least 10 years (for those born in 1929 or later). Ten years is the minimum amount of time required to earn the mandatory 40 credits.
    Even if you have accumulated your 40 credits, however, you can't start getting payouts until you're 62 or older."

    "In 2017, you'll get one credit for every $1,300 in Social Security taxable earnings, and there is a maximum of four per year. "

    "You accumulate credits based on your earnings. In 2016, you get one credit for every $1,260 you earn (that figure is adjusted higher each year), up to a limit of four credits per year. These credits remain on your record even if you change jobs or stop working for a while."

    1) Does that mean I only need more than $1260 (let's say $2000) salary for 4 months in 2016 in order to get that 4 credits in 2016?

    2) I have a client would do W2 ($8000, after $8000 I will have to put in my own money in order to pay myself ) a year for me as long as I need it. Is there any problem with this "insurance" policy? I know the SSA amount in that case will very little, but I just want to prepare for the worst scenario.

    3) Every year I pay tax with 1099, I assume 1099 has nothing to do with SS right?
    I like being alone, I just don't like being lonely.




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    Featured Member minnow's Avatar
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    Default Re: Help me with Social Security eligibility.

    This is outside my pay grade, but the way I'm reading it is that you'd need to show $5040 in taxable 2016 SS earnings (1260 x 4= 5040) to get 4 credits. Key being number of increments of $1260. It's not like make a few bucks above $1260, and poof!, you have your 4 credits.

    I'm surmising that you're looking ahead to your 60's when it comes time for retirement benefits. I can tell you that it's going to take a lot more than 10 years of making just enough taxable income to earn 4 credits per year to get any kind of meaningful "payout" in your 60's. I could get into the weeds for some halfway cogent examples, but at this stage in your life, best just to get a paper trail set up and running in the years ahead.
    I'm right 96% of the time. I don't sweat the other 5% .......................

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    God/dess baer45's Avatar
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    Default Re: Help me with Social Security eligibility.

    Latest amount & QC explanation
    The amount of earnings required for a quarter of coverage (QC) in 2017 is $1,300. "Quarter of coverage" is a legal term, but you may also see the term "Social Security credit" (or just "credit") used elsewhere. A QC is the basic unit for determining whether a worker is insured under the Social Security program. No matter how high your earnings may be, you can not earn more than 4 QC's in one year.

    History
    See historical series of earnings needed to earn one quarter of coverage, 1978-2017.

    For years before 1978, an individual generally was credited with a quarter of coverage for each quarter in which wages of $50 or more were paid, or an individual was credited with 4 quarters of coverage for every taxable year in which $400 or more of self-employment income was earned. Beginning in 1978, employers generally report wages on an annual, instead of quarterly, basis. With this change to annual reporting, the law provided that a quarter of coverage be credited for each $250 of an individual's total wages and self-employment income for calendar year 1978 (up to a maximum of 4 quarters of coverage for the year). After 1978, the amount of earnings needed for a quarter of coverage changes automatically each year with changes in the national average wage index.

    Determination of the quarter of coverage amount for 2017
    The law specifies that the quarter of coverage (QC) amount for 2017 is equal to the 1978 amount of $250 multiplied by the ratio of the national average wage index for 2015 to that for 1976, or, if larger, the 2016 amount of $1,260. If the amount so determined is not a multiple of $10, it shall be rounded to the nearest multiple of $10.

    Calculation details Amounts in
    formula 1978 earnings for one QC $250
    1976 average wage index 9,226.48
    2015 average wage index 48,098.63
    Computation $250 times 48,098.63 divided by 9,226.48 equals $1,303.28, which rounds to $1,300
    Higher amount $1,300 exceeds the amount for 2016, so the earnings needed to earn one QC in 2017 is $1,300
    I like being alone, I just don't like being lonely.




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    God/dess baer45's Avatar
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    Default Re: Help me with Social Security eligibility.

    Quote Originally Posted by minnow View Post
    This is outside my pay grade, but the way I'm reading it is that you'd need to show $5040 in taxable 2016 SS earnings (1260 x 4= 5040) to get 4 credits. Key being number of increments of $1260. It's not like make a few bucks above $1260, and poof!, you have your 4 credits.

    I'm surmising that you're looking ahead to your 60's when it comes time for retirement benefits. I can tell you that it's going to take a lot more than 10 years of making just enough taxable income to earn 4 credits per year to get any kind of meaningful "payout" in your 60's. I could get into the weeds for some halfway cogent examples, but at this stage in your life, best just to get a paper trail set up and running in the years ahead.

    I believe $1300 has to be the net quarter income.
    Yes. I will give it at least $8000 taxable income each year. As a sex worker, my income won't show up at W2. I might move to a office job in the future, before that I want to put in the "years" while i am sitting on top of a pile of cash.
    I like being alone, I just don't like being lonely.




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    God/dess baer45's Avatar
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    Default Re: Help me with Social Security eligibility.

    My new question is:
    Does it have to be $1300 each quarter? what if I someone who earns $8000 the first quarter and will she get all 4 credits?
    I like being alone, I just don't like being lonely.




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    Default Re: Help me with Social Security eligibility.

    I wouldn't rely on Social Security at all, they have been saying since the Reagan era it would eventually run out of money. While I understand and appreciate where you are coming from, I would set up your own retirement accounts and invest in real estate or other assets that can be later liquidated or borrowed against to get by when you are older.
    XoXo Gia
    Danielle Fishell (the Dish): "If the Super-Star thing doesn't work out, Gia makes a great stripper name"

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    Default Re: Help me with Social Security eligibility.

    While I don't think Social Security will ever go away, I also think it is folly to rely on it. So, start your savings plan now. First save at least six months of living expenses. Then start investing. Invest in things you understand. Read the prospectus and make sure you understand how the investment makes money. If it is not explained to you clearly and in a way that you can understand, then either the investment managers don't know what they are doing, or they are a fraud. Walk away from those types of investments. Invest for the long haul.

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    Default Re: Help me with Social Security eligibility.

    Yes. I have multiple investment beside this. LiVing on SSI will be my worst scenario
    I like being alone, I just don't like being lonely.




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  14. #9
    Member Sitri's Avatar
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    Default Re: Help me with Social Security eligibility.

    As a 1099 you are responsible for your own social security deposits. Getting 40 quarters is not hard, but the amount of your benefit is based on the highest 10 years of earnings. The amount of benefit for qualifying at the minimum level probably is the least of your worries for future retirement. That being said, when you do turn 62 you can go into a nursing home, go on Medicaid, sign the social security check over to the nursing home, get a $50 monthly allowance and be all set..
    I believe 60% off all nursing home residents are now on Medicaid. This is how it worked for my mother.

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