Social Security Payments While Outside The U.S: Fill & Download for Free

TL; DR: Social Security offers overseas direct deposit for beneficiaries. There is no need to travel to the US to apply for or pick up benefits.More information can be found by reading the SSA booklet on payments outside the US, found here: https://www.ssa.gov/pubs/EN-05-10137.pdf (https://www.ssa.gov/pubs/EN-05-10137.pdf)However, if you're one of the many Indian citizens working in the US on H-1B, you may wish to read further for additional information and my answer may dispel many myths you may have heard about foreign workers and Social Security retirement benefits.Provided one is fully qualified by having 40 quarters of coverage (generally 10 years of work), they can draw a retirement benefit. In the past, foreign workers who chose not to pursue LPR status didn’t remain in the US long enough to earn 40 SSA work quarters. However, with the American Competitiveness in the 21st Century Act, this has changed, primarily for India-born workers who cannot get LPR status in a timely manner because of the diversity cap in Sec 202(a)(2) of the Immigration and Nationality Act. Those workers with an approved I-140 petition can remain in H-1B status indefinitely. These same workers are going to be the ones who are most likely to work long enough to qualify for a retirement benefit while at the same time not being LPRs or citizens of the US.How does the quarter of coverage system work? Below is a table showing the amount of Social Security taxable income that one must earn in a given year to get one quarter of coverage:A maximum of four quarters can be earned in a given year. For 2020, once one has earned $5,640, they have earned their four quarters for the year. For a person earning six figures, they’ll earn this by the end of January. The amount a quarter is worth may not seem like much, but when one looks at a person earning the federal minimum wage working 40 hours per week, it will take them five months (20 weeks) of full time work to earn four quarters. The best way to determine SSA taxed earnings is by looking at one’s W-2:Box 3 will show the wages that were taxed for Social Security. So long as this amount is over the value for four work quarters, one has earned all their quarters for that year.The tax deduction on one’s paycheck can have many names. It can be ‘Social Security’, however other acronyms used are OASDI, FICA (the law that mandates payroll taxes for Social Security contributions and Medicare) and SSDI (which refers to the disability benefit only.) Depending on how an employer chooses to list deductions, they may be broken out into the 6.2% Social Security amount and the 1.45% Medicare amount or they may be lumped together at 7.65% of income subject to these taxes. Both the employer and the employee contribute an equal amount. Self employed persons who are sole proprietors (Schedule C) will pay both portions or 15.3%; this is commonly called the self-employment tax, but it is the same tax employees pay, just twice as much to account for the fact the the self employed person is also their own employer.Do not confuse Social Security retirement and disability benefits with the Supplemental Security Income (SSI) program, which is also administered by the Social Security Administration. It is a separate welfare program for US citizens and certain LPRs. It cannot be paid to beneficiaries who live outside the US. SSI is means tested and for the disabled and elderly who are very poor and have no or little other income and resources of their own.Another confusion is company retirement plans like 401(k)s. These plans are private. Every plan is different and rules vary. Normally contributions to these plans are refunded to the contributor if they have not become vested by contributing for the required minimum period of time. If one is forced to cash out a 401(k), they need to see a financial planner or accountant if they are not aware of the pitfalls of cashing out a 401(k) before one is 59 1/2 and/or taking the money out all at one. Read one’s 401(k) literature carefully.Edit: There is a lot of disinformation out there. If one wants to comment that my answer is incorrect or a reply to a comment is incorrect, they must post links to original research, not links to discussion groups or hearsay anecdotal evidence, news articles, etc. I will not allow the comments to this answer to be used to spread disinformation.I am open to learning new information or a correction from what my own original research has found, but such information must be substantiated. Any contrary comments without valid citations will be deleted. You have been warned - my answer, my rules.Currently, according to the Social Security Administration, there is exists no treaty, or totalization agreement, between the US and India regarding social security benefits or contributions. U.S. International Social Security AgreementsA person must contribute to Social Security and earn 40 work quarters (10 years) to be insured for a retirement benefit. Generally, H-1B status can last a maximum of six years. However, the AC-21 Act allows H-1B status to be extended indefinitely, thus it is possible for certain H-1B workers to meet the 40 quarter requirement. AC21 generally benefits those foreign workers with an approved I-140 petition but who cannot apply permanent residence yet due to the artificial backlog created by INA Sec. 202(a)(2). Those affected are mostly India-born.Please do not contribute to the disinformation that already exists. Do original research on the law for yourself, do not rely on the Internet or even my own answer. Every person’s case is unique; what applies to one may not apply to all.Edit #2: Please do not confuse the Supplemental Security Income program (SSI) with Social Security retirement benefits, referred to by many acronyms such as SSDI and OASDI. FICA is the law that mandates payroll deduction of the taxes for OASDI and Medicare. These are separate programs. SSI is a welfare benefit available only to US citizens and in limited circumstances, LPRs. SSI is means tested and is designed for those with no income or resources who cannot work for medical reasons or have reached retirement age. This is not the program I'm talking about.Edit #3: Moved some information in the prior edits into the main answer and reorganized the answer for easier reading. 25K plus views! I hope all those who have read are much better informed about Social Security than they were.Edit #4: Added information about how SSA work quarters are earned. This answer is getting really long, however I’m adding information based on questions raised in the comments. I’ve also done more revising and reorganization to shorten the answer.Edit #5: Added information that 401(k) plans and other company offered retirement savings plans are private and have nothing to do with Social Security.

Because Congress told them to, in law.Social Security (SS) is an inter-generational Transfer Payment system (current workers pay current beneficiaries - there are no personal "accounts" despite misrepresentations to the contrary), paying "social insurance" beneficiaries enough such that if they have no other means of support in old age or disability, they won't be in totally abject poverty. It is nominally funded by FICA payroll taxes, and has always been structured this way: the first recipients of social security benefit checks paid nothing into the system.From 1983 to present, FICA tax revenue overages (that amount of U.S. dollar cash not needed to pay current SS beneficiaries) were accumulated in the Social Security Trust Fund, and the fund "invested" those monies in a special "Government Account Series" (GAS) of U.S. Treasury Securities (bills, notes, & bonds). In effect, as the question notes, these monies are on loan (as with all U.S. dollar cash receipts from Treasury security sales) to the Congress to spend as they see fit in the overall U.S. Federal Budget.For a full current statement of the U.S. Public (national) Debt (including the GAS securities), see the monthly report from the Bureau of the Public Debt, which is part of the U.S. Department of Treasury:Monthly Statement of the Public Debt (MSPD) and Downloadable FilesTo be clear:The Department of Treasury sold those securities (debt) to the Social Security Administration (SSA) in exchange for U.S. dollar cash collected from FICA payroll taxes, i.e., the U.S. Federal Government is the debtor; they borrowed this U.S. dollar cash, and are expected to pay it back with interest.The Social Security Administration owns ("holds") those securities, i.e., they are the creditor of the Federal Government.Both agencies are of the Federal Government, therefore, the government "owes" U.S. dollar cash to itself.In a sense, having the SS Trust Fund in Treasury bonds is a way to make the required reserves a more "real" political promise, even if they are "intra-governmental" I.O.U.'s. Though there is a question: if SS really is an inter-generational transfer payment system (which it is), why bother accumulating a "trust fund" instead of simply raising FICA taxes as required, year on year?Maybe it's because Congress wanted to significantly raise taxes in one go ... for some other (any other) purpose, and wanted an accounting (political) fiction to cover what it was really doing with U.S. dollar cash under the fiction of a "trust fund" being "loaned" to the government.The contractual promise is that the Congress (the Federal Government of the United States) will repay those loans as the Social Security Administration redeems the GAS Treasury securities, in order to pay SS beneficiaries when that's required. That started happening in 2010, i.e. Social Security is now in deficit. Put another way: there are not enough FICA payroll tax revenues to pay current SS beneficiaries, and the SS Trust Fund is being drawn down. At current projections, it will exhaust sometime after 2030, which is not that long off (less than 15 years).Here's the bad part: every time the SSA redeems one of those GAS bonds to pay SS beneficiaries, the Treasury has to sell an equivalent dollar amount of "Marketable Account Series" (MAS) treasury securities to anyone who'll buy them (e.g. China, Japan, various Money Market Mutual Funds & Pension Funds) to get the cash to pay SSA.While this dance of trading one bond type for another has no effect on total dollars borrowed (owed) under the debt ceiling (they're just trading GAS obligations for MAS obligations, and both are counted under the debt ceiling as part of the total U.S. Public Debt), many analysts of the USA's fiscal situation make a distinction between MAS debt, and GAS debt, i.e. they don't consider GAS bonds as "real" because they're intergovernmental, as opposed to "external" (i.e. when the USA actually contractually owes U.S. dollar cash to someone outside the government). This is why you get analysts saying that the Debt to GDP Ratio (a key indicator of Sovereign Debt sustainability) is significantly less than 100% of Gross Domestic Product (e.g. 63% of GDP); they're discounting the entire SS Trust Fund as "not real debt."To understand that kind of analysis, it is important to understand the nature of the accounting fiction being performed before us: the borrower (the U.S. Treasury, and, by extension, the whole rest of the federal government), and the lender (the SSA), both report to the Congress. If the Congress decided to make the SS Trust Fund "go away" without financial repercussions, it could do so, by directing the bondholders (the SSA) to burn/destroy/dispose of the GAS bonds, and not declare a sovereign default event. The SSA would be obliged to salute and do as ordered. Thus would some ~$4.3 trillion dollars of the U.S. Public Debt obligation (as reported monthly by the Bureau of the Public Debt inside the Treasury Department) would vanish before our eyes.As a political & financial (Fiscal Policy) reality, the draw down of the SS Trust Fund puts pressure on the whole rest of the U.S. Federal Budget, and, in the end, it doesn't matter whether we "make it go away" or not, because:if the total budget amount is to stay the same, there must be cuts in other federal programs to pay off the SS Trust Fund (i.e. the SS beneficiaries), dollar for dollar.if you can't (or won't) cut other federal programs (expenditures), then you have to raise taxes (FICA, or some other, but beware Hauser's Law) to cover the SS benefits deficit, orsell more MAS treasury securities (i.e. borrow more from people outside the federal government, i.e. increase “external” public (national) debt), orreduce current or future SS benefits which the Congress can do any time it pleases to the contrary of all the Political Rhetoric one hears about the SS benefits having been “earned” by the recipients; see http://www.ssa.gov/history/nestor.htmlOr some combination of all four (other federal program cuts, SS benefit cuts, raise taxes, borrow more U.S. dollar cash).Anyone who says, “Social Security is ‘self-funded’ and has no effect on the rest of the U.S. Federal Budget” is ignorant or lying. SS is not a pension savings system, despite political rhetoric (propaganda) to the contrary.See alsoAre the promised benefits of U.S. Entitlement Programs higher than achievable federal tax revenues and the maximum amount of public (national) debt that can be serviced as a percentage of GDP? (Yes, by multiples - that's why the United States Credit Rating Downgrade (August 2011) happened).Is it possible to cover the unfunded liabilities (promised benefits) of U.S. entitlement programs by taxing the rich? (No, not even close - the USA is rich, but not that rich)What percentage of U.S. GDP is taken as tax revenue for the U.S. Treasury (the federal government) every year without regard to how high tax rates set by the Congress are?Why did the U.S. federal government lose its AAA credit rating from S&P?Why aren’t entitlements like Medicare and Social Security referred to as ‘earned benefits?’

The cost of UBI is pretty simple to compute, once you settle on the level of payments. To be concrete, I’ll compute this for the US. Let’s assume a UBI level of $1000 per month for adults and $350 per month for children. That’s the official US poverty level, in round numbers. With 74 million kids and 252 million adults (Total population by child and adult populations | KIDS COUNT Data Center), that’s $278 billion per month or $3.34 trillion per year. Then there will be overhead. UBI is a bit simpler than Social Security, but let’s conservatively add Social Security’s overhead level of 0.5% (Social Security Administrative Expenses), giving us $3.35 trillion per year.As for how to pay for it, I cover that in Peter Schachte's answer to How would the US pay for UBI?, but in outline, the options are reduced spending, increased taxes, and printing money. Modern Monetary Theory would suggest that printing money could be a viable alternative, but that’s a controversial theory, and it falls back on taxes to keep inflation in check anyway, so I’ll ignore that option.One of the key ideas of UBI for most advocates is to replace most or all existing means tested social welfare programs, and there are certainly many of them in the US. I would exclude Medicare/Medicaid from this. They need a sensible replacement, too, but that’s outside the scope of this topic, so I’ll just leave them alone in this proposal.UBI would replace Social Security and Welfare programs, which total about $1.45 trillion per year (Social Security Spending Analysis, Welfare Spending Analysis), leaving $1.9 trillion to be funded through additional taxes.I propose replacing the current income tax and (individual) Social Security withholding taxes with a flat tax. I’m also not going to try to solve the $779 billion deficit (and growing). If the current government can’t do it, I don’t see why I should; that would be an unfair comparison.Current US government revenue from individual income taxes and individual Social Security taxes (US FY18 Federal Budget Estimated Revenue Breakdown) are $1.684 trillion + 0.392 trillion (counting only the individual contribution) = 2.075 trillion, so this proposal needs to replace that and also cover the $1.9 trillion in added costs for the UBI, for a total of $3.975 trillion.With a flat tax all personal income is taxed at the same rate (no deductions), so we can simply divide this figure by the US total personal income, which was $17.573 trillion in 2018 (U.S. personal income 1990-2018 | Timeline), so a flat tax of 23% should cover it. Let’s call in 25% in round numbers. And don’t forget, this replaces the Social Security 6.2% tax you pay from the first dollar, as well as current income tax schedules.What all the naysayers forget is that while many people’s taxes will go up, for most Americans, the $12,000 per year in UBI more than makes up for that. So for example, a full time minimum wage worker makes about $15K per year, so they would pay 25% * $15,000 = $3,750 in taxes, but receive $12,000 in UBI payment. Bonanza! An individual earning $48K would pay 25% * $48,000 = $12,000 in tax and receive $12,000 in UBI, so they pay $0 net tax. It’s only people on high incomes with lots of deductions, or people who earn a lot through dividends and capital gains, that are worse off.