Understanding Social Security
01.The US Pension Safety Net
Social Security is a federal program funded by payroll taxes. It provides a monthly benefit to retired workers. To qualify, you must earn 'credits' based on your annual earnings.
02.The 40-Credit Requirement
You need to earn a minimum of 40 credits to qualify for retirement benefits. You can earn a maximum of 4 credits per year, meaning you must work and pay taxes in the US for at least 10 years to qualify. As a late arrival, ensure you hit this 10-year working threshold!
03.Benefit Calculation
Your benefit is calculated based on your highest 35 years of indexed earnings. If you work fewer than 35 years in the US, the missing years are factored as zeroes, which lowers your benefit. This makes personal retirement savings (401k, IRA) even more critical for immigrants.