The vast majority of retirees in the United States will receive Social Security payments when they reach their 60s, but there are four groups of retirees that will never receive these retirement funds.
The groups, referred to as “never beneficiaries” by the Social Security Administration, comprise approximately 2.7 million retirees and make up approximately 3.5% of the country’s senior population. Benefits are paid out to roughly 74.2 retirees each year, but 79.6 people in the country are over the age of 60.
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The four categories of “never beneficiaries” are:
1. Immigrants that legally enter the workforce over the age of 50
Immigrants that come to the U.S. as seniors, even if they enter legally, do not generally receive monthly Social Security payments because of the amount of time they need to spend working in the country. In order to qualify for Social Security, recipients need to acquire 40 work credits, which is reached by paying into the program for 10 years.
Late-arriving immigrants are the largest group of “never beneficiaries” and make up 45.8% of the four categories, according to the SSA.
2. Infrequent workers
The second-largest group of those who do not receive the benefits are those who fail to earn the mandatory 40 work credits needed for the program but are not immigrants who entered the U.S. after the age of 50. This can happen if there is only one person in the household making money. Nearly 40% of those who do not qualify for Social Security fall in this category.
There are exceptions to this category, such as those who cannot work because of a disability. Those who are on disability can receive a different kind of Social Security benefit called supplemental security income. A scaled age-to-credits table is used to determine if the person is eligible for the program.
There is also a survivor benefit for people who have lost a spouse who was the sole earner of the household.
3. Noncovered workers
Certain local and state employees do not qualify for Social Security benefits if they receive a pension that is not covered by the administration. The employees typically have a pension program set up with their state or local governments, which takes the place of Social Security.
Employees that are hired by a different country also do not usually qualify for Social Security because their employers do not pay into the benefits. Noncovered workers account for 13.4% of “never beneficiaries,” according to the SSA.
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4. Employees that die before receiving benefits
The smallest group, which accounts for 1.2% of workers, are those who die before they start receiving their benefits. Retirees can start receiving the funds from Social Security as early as 62, but the government offers incentives for those who wait until they are 70. Delaying retirement until 70 can increase the monthly payouts by as much as 8% per year.
The future of Social Security is currently uncertain, but discussions on how to save the program have occurred in Congress for years. Experts, however, have warned that the program could be insolvent in 10 years if nothing is done.
