How are Social Security retirement benefits calculated if your employers didn't take out for Social Security when they paid you?
I started working when I was 11 years old at a US Navy base overseas (NAS Argentia), along with other men and with the same pay. I also worked later when I was 15, 16, 18, 19, etc for big construction jobs where they didn't take out for SS or taxes. Years later I did many translations for the CIA's drug trafficking operations in Costa Rica, Panama, and Nicaragua and they never took out taxes or SS. When I asked them for records of the payments they made to me, they threatened me and had agents follow me everywhere for months. Not everyone has simple jobs like librarians.
- JudithLv 73 years agoFavorite Answer
Social Security uses your high 35 years of earnings to compute a retirement benefit. If you don't have 35 years then they will have to use zero years which, obviously, means that you will have a much lower social security benefit than someone who has paid into the program 35 years or more. Of course you still need 40 quarters of coverage (credits) in order to be entitled to a social security retirement benefit in the first place - that is the equivalent of working and paying social security taxes for a total of 10 years. Without those 40 quarters you aren't entitled to a social security benefit except as a spouse.
Prior to 1983, federal governmental employees did not pay social security taxes - they paid into the civil system retirement system. As of 1983 NEW federal employees were covered under the social security system. Those federal employees who began before 1983 had the option of staying with the civil service system or switching over to the social security system.
If you didn't pay social security taxes but should have, it is too late to do anything about that now. You should have taken care of the issue at the time. I suspect at that point you didn't want to pay into the system because you weren't thinking of your future when you retired. I think most people would opt not to pay social security taxes if they didn't have to or they found a way not to - to their detriment.
If what you say is true about work for the CIA, it sounds like you were a consultant. That means you were self-employed and should have filed self-employment tax returns and paid your SS taxes yourself. No employer is required to maintain payment records more than 7 years. If you don't have proof of payments from them, you are out of luck.
The old saw "You made your bed - now lie in it" comes to mind.Source(s): I was a social security claims rep for 32 yrs.
- Max HooplaLv 73 years ago
You should have reported the earnings as self-employment income and paid self-employment tax. If you didn't your SS earnings account will be zero for those years. By the time you retire they would probably not be in your top 35 years anyway.
- StephenWeinsteinLv 73 years ago
If your employer doesn't take out social security, then you are required to report the amount of the payments when you file your taxes for the year.
If you report it when the law says you should, then the benefits are calculated the same as if your employer did take out the tax, except that they use your reports instead of the employer's reports.
If you don't report it without a certain amount of time (I think it's about 3 years, but I'm not sure), then it's too late.
The benefits are calculated the same as if you never had that job, did that work, or earned that money. It's like you were unemployed that whole time.
- 3 years ago
Then you don't get paid social security benefits.
Not everyone can collect social security.
The problem here is you spent years lying on your taxes, as a "contractor" is liable to pay his own social security taxes.