I took that to mean those 3 years of work were needed to reach the 40 quarters minimum required to qualify for social security benefits. Who did you work for back then? I worked for the federal government for 3 years in the late 1970s, and no FICA was withheld back then. Federal employees had civil service retirement and no social security. You may be able to get the old tax returns from the IRS, but if Social Security does not have a record of those earnings I would guess that FICA was not withheld from your check back then, or if it was, your employer may not have paid their half and passed it on to the Social Security Administration (or the IRS or however they do it). And also, as mentioned, if you could prove FICA was paid for those 3 years you would likely end up qualifying for a minimum benefit that would be less than your spousal benefit.
Thanks so much for the great info! Yes, I needed the records to get to my 40 quarters. And the years that are missing I did, indeed, work for a state government!
If you need to, you can work part time to get to your 40 quarters. It only requires $1,220 in earned income with FICA contributions each quarter to count. You could do some freelance tutoring, dog walking, crafting or work a few hours a week at a coffe shop to earn that. One of Hâs former coworkers is thinking of taking a part time job to get to the 40 quarters.
I got my copy of âRetirement RXâ by Fraunfelder MD and Gilbaugh MD (2008) - so passing on recommendation for it. Book cover says it is the first scientifically backed formula guaranteed to help you enjoy the retirement lifestyle youâve always wanted. The back cover has 8 bullet item that they say are the 8 essential keys to successful retirement (and four phases). Book has three sections, 11 chapters, 192 pages. These two authorsâ sub-specialty was geriatrics. They had a survey and got 72% return from their 1500 patients that answered anonymously - some wrote essays and some were succinct and matter-of-fact. Besides getting this book via Amazon recycled/used for $4, my copy is signed by Dr Fraunfelder and there was a small note card in the book saying the proceeds of the book sale go to Casey Eye Institute-OHSU Foundation (so my book was from an early promotion) - too bad my name is not Judi (inscription says she is wonderful). H and I are thinking/planning, we are still 6 years out from retirement.
After you get the first, rough estimate, you get to a screen where you can put in your earnings for each year to get a better estimate. So you can enter in the years you have data for, and then take a guess at the missing years (assuming that job had FICA withheld, which it seems may not be the case). Or you could add a few years of potential part time earnings at the end to get up to the number of necessary quarters.
This should give you a pretty good estimate of what your potential benefit could be.
Do the same for for your husband. If your benefit would be more than half of your husbandâs (which is your spousal benefit), it might be worth a deeper dive to try to find data for the missing years, or pick up some part time work for a while. If your potential benefit has no chance of being higher than your spousal benefit, then you can rest easy.
My husband has started the retirement process. He just filled out his retirement form this week. Now I need to check for accuracy and such before he mailed the form in. Once this form is done, there are a few more retirement accounts to do. Thatâs the problem with having too many little retirement income from many sources. But it takes time to do them with everything else we have to do.
Any tips on the actual process of initiating your retirement paper work?
Just a note â quarters for SS benefits used to be based on earning enough income in a specific quarter of the year. AFAIK, none of the filings I made to SS or the IRS in the past few years ever broke down wages paid by quarter, and it is my understanding that youâre now credited based on your total wage income for the year â each $1220 in wages gets you one quarter, up to a max of four per year. You can earn all four quarters in one month (or one day) if you have enough wage income. So, if youâre short six quarters, it doesnât mean you (necessarily) need to work for a year and a half.
@DrGoogle , are you referring to too many QRP (401k type) accounts?
If so, would this be a good time to do trustee-to-trustee rollovers into one IRA? If you know where your H wants to hold his IRA (say Vanguard or Fidelity), you can contact the companyâs concierge service and they can initiate the rollover for you. That way, the money is not sent to the account holder and there is no problem with the IRSâ âone-every-12-monthsâ rollover rule.
The biggest mistake we made in the process was to not max out the 401k before he retired. This has
made it difficult to reduce our total income for this year for tax purposes.
And congrats Dr. Google! Very exciting!
Oh and if you are losing dental insurance âŠget thyself to the dentist!
@AttorneyMother, Pensions and SS and possibly one 401k type account overseas.
This one we donât do trustee to trustee transfer, we are going to spend it. Yeah! But we have to break into 2 chunks for tax purpose. The main account can do trustee to trustee transfer next year.
@sax, thanks, we will have dental insurance but the lower version. I did the high version this year, up to $4000 per year, little did I know my husband and my daughter are going to max out.
It doesnât need to be âwage income.â If youâre self-employed youâre probably paying self-employment tax (or at least you should be; the IRS will catch up with you if you donât). That means youâre paying both the employerâs share (6.2%) and the employeeâs share (6.2%) of the first $117K of your self-employment earnings toward Social Security, and another 2.9% of all your self-employment earnings (no cap) toward Medicare. Any year in which you have self-employment income (= taxable income = revenue - deductible expenses) of at least $1220 should get you at least one quarter of credit toward Social Security, with additional increments of $1220 in self-employment earnings generating additional quarters of credit, up to the maximum of 4 per year. Self-employment income of at least $4,880 in a year should get you the full 4 quarters of credit toward Social Security for that year, even if itâs all earned in a single quarter. Depending on their interests and abilities, some people may find it more attractive to start a little home-based business than to take a part-time job in order to make up for lost quarters of work credit and become eligible for Social Security. (Note, however, that the self-employment tax doesnât kick in until you have at least $400 in net self-employment earnings; once it does kick in, though, it applies to all your net self-employment earnings, i.e., the first $400 isnât exempt if you earn enough to be required to pay the tax).
I apologize in advance for asking this here rather than researching it; itâs hot and muggy, and Iâm lazy.
DS will be paid the insane sum of $4500 for working 6 weeks this summer. This is his only earned income for the year. I had intended to let him keep it, and planned on putting $4500 in a rIRA in his name (with money from a taxable account). He received a letter today indicating that he was enrolled into a TIAA-CREF 403b default account.
Do I get him to fill out a POA so I can max out his 403b contribution? His job only runs an additional two weeks, and they told me over the phone that you canât do retroactive payroll deductions. My guess is that this is a non-starter.
Can we still put $4500 in the rIRA, or do we have to reduce that by whatever went into the 403b?
@IxnayBob, the general rules that govern tIRAs govern Roth IRAs unless there is a specific rule about Roth IRAs (donât ask me where I read this, but it was Natalie Choate who said it).
Anyway, if you look at Publication 590, which governs IRAs, hereâs what it says about âHow Much Can be Contributedâ:
My understanding is that your total contributions across all plans cannot exceed your earned income.
To make contributions into a 403b for 2 weeks seems crazy. I would have him get out of the default 403b contributions, and just do it all as a rIRA or a non-deductible IRA and backdoor it to a Roth.
ETA: I think the law now is you automatically get signed up for a 3% contribution, or something like that. But you can lower your contribution to zero, you just have to actively do it.
