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Social Security Without Ever Working?!? | FINALLY THE TRUTH - YouTube
Channel: Holy Schmidt!
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in this video i discuss whether you need
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to pay into social security
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to receive social security coming up
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next on holy schmidt
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holy schmidt
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there's a lot of chat in the comment
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section here on holy schmidt
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about people who receive social security
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for free
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some of the comments are supportive
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others not so supportive
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others very unsupportive of the concept
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of someone receiving social security
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without paying anything into social
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security before we begin please make
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sure you click subscribe and
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notifications
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so that you get alerted the next time i
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post a video i work very hard to
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get what's out there in here so you have
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all of the updated information on social
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security
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now let's get into it in order to
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understand what i'm going to show you
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next
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you need to understand just a few basic
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concepts about the structure of social
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security
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and also something called the special
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minimum
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primary insurance amount first
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there are three things that determine
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the size of someone's social security
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payment
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how much they earned on average over
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their lifetime
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how long they worked and when they took
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social security after they qualified for
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social security first let's talk about
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your earnings
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the ssa will take your lifetime earnings
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and average them
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and index them in today's dollars and
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this is what's called
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your average annual earnings
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this is one component of the three that
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determine the size
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of your social security payment that
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number can only be determined
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by understanding how many years you
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worked the ssa will take your best
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35 years of earnings and divide that by
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35.
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if you don't have 35 years the ssa will
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give you zero
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for the years that you don't have
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earnings too many zeros and your
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payments start to go down
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you put those two together and you have
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your average annual indexed monthly
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earnings
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the next point is something called bin
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points basically the ssa will give you
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more
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social security credit for your lower
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dollars
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than they do for your higher dollars in
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terms of your earnings
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in 2021 a social security recipient will
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receive 90 percent
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of their first 996 dollars
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of average indexed monthly earnings at
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full retirement age
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they'll receive 32 percent of
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the amount between 997 and 6002
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and they'll receive 15 of
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any amount over six thousand and two
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dollars
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of average indexed monthly earnings so
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it's like taxes
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you pay more and more as you earn more
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but the benefit doesn't follow the
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amount of taxes paid
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by the way if you're watching this video
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in 2022 23 or
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2030 it doesn't matter what the actual
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pinpoint numbers are you can look those
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up on the internet
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the important point here is to
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understand the concept of bin points
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because this is very important to what
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i'm going to say next
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so for those not getting something
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called a special minimum primary
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insurance amount something we haven't
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talked about yet
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your social security payment is based
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loosely on the amount of money that you
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earned
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per year over your lifetime there's also
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something called the special
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minimum primary insurance amount this is
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a
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very small number it's set at 50 below
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in fact
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lower than 50 below the federal poverty
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line
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the special minimum primary insurance
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amount
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means that no matter how little you earn
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per year
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you will get a minimum amount in the
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case
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of the 2021 number this is 829 dollars
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per month
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and this is the point of confusion and
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the source of some not nice comments
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about people receiving social security
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even though they don't deserve to
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receive social security
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but there's one point that most people
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miss and that is the special
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minimum primary insurance amount is
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there
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to cover people who worked but didn't
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earn very much
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basically unskilled labor it's not there
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as a gift for people that didn't work at
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all
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the reason is there's something called
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the 30-year rule
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and that rule basically says that you
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get the 829
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per month if you've worked for 30 years
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in the united states
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no matter how much you earned but you
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had to work for the 30 years
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for every year that you work less
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than 30 years the benefit is reduced
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if for example someone arrived in the
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united states in 2010
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and retired in 2021
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their special minimum payment
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would go from 829 per month
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down to 39 per month and just so we're
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crystal clear there's one final point
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called
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earnings credits and basically this
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means that
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you have to earn a minimum of 40 credits
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in order to qualify for social security
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each credit is one quarter year's work
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which means that if you don't
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work and contribute to social security
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for a minimum of 10 years
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you don't qualify at all so when someone
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steals a social security number
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and they use that social security number
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they're doing it to get a job
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they're not doing it to get access to
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social security ironically
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if they do that it actually builds the
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foundation of social security because
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they're contributing
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and they can't collect it later if you
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like this video and you want to see more
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of me
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please make sure you click subscribe
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notifications so that you get alerted
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the next time i post a video
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i post about twice a week also check out
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this video
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right here on the average
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net worth of a 62 year old
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this is jeff schmidt thanks for watching
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