When we think about retirement planning, Social Security is an essential part of the equation. But not everyone can expect to receive benefits.
People who didn’t pay into the Social Security system, or didn’t pay enough into it, as well as people in certain other situations may be ineligible for retirement benefits.
Following are several specific types of folks who should not count on receiving benefits.
1. Infrequent workers
To receive Social Security retirement benefits, most people need to accumulate at least 40 “credits” during their working lifetime, according to the U.S. Social Security Administration (SSA).
Currently, you can earn up to four credits per year if you work and pay Social Security taxes.
So it’s perhaps no surprise that people who didn’t work enough to qualify for benefits, and immigrants who arrived in the U.S. late in life and didn’t work enough to qualify, make up more than 80% of the people who have never received benefits, SSA data shows.
2. Noncovered workers
Not every worker pays into the Social Security system. In certain states, public employees are not covered by Social Security due to receiving a pension.
They can include employees of state and local government agencies, including school systems, colleges and universities. In some states, they may also include police officers and firefighters.
3. Certain debtors
Do you owe the government money? If so, you might have some of your Social Security benefits withheld to help pay the debt.
If you have overdue federal tax debts or federal student loans, the government can garnish your benefits, as we detail in “10 Things That Could Hurt Your Social Security Payments.”
On top of that, if you owe child support or alimony, you could see your benefits diminished to cover those obligations.
4. Certain expatriates
If you retire in a foreign country, in most cases, you can receive your Social Security benefits there.
In fact, in April, the Social Security Administration sent a total of about 686,000 payments to beneficiaries outside the U.S., and 98% of those payments were made by direct deposit.
The foreign country to which the SSA sent the largest number of those payments — about 112,000 of them — was Canada. However, there are some countries to which the SSA generally can’t send money. They include:
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Azerbaijan
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Belarus
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Cuba
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Kazakhstan
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Kyrgyzstan
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Moldova
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North Korea
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Tajikistan
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Turkmenistan
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Ukraine
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Uzbekistan
The SSA does make exceptions in some situations — but not for situations involving Cuba and North Korea.
“The U.S. Department of the Treasury prohibits making payments to persons residing in Cuba or North Korea,” the SSA says.