Social Security for Overseas Workers

A reader from North Dakota asks about earning enough Social Security credits while working overseas and how this impacts Medicare eligibility and spousal benefits.  

"My wife and I have lived abroad for most of our careers. I currently have 34 of the 40 quarter credits needed to be eligible for Medicare and Social Security. I've provided a screenshot that shows lots and lots of zeros. Could you offer guidance on "the math" of how much Social Security, if any, I'd be eligible for, assuming I earn those 40 credits? I am currently 54 and plan on working overseas until age 57. My wife does not have 40 credits but will qualify through me via spousal benefits. I don't anticipate earning more than the minimum amount in self-employment income in the next few years, enough to earn the missing credits. Our main objective isn't retirement income; it's Medicare eligibility. Noting this, receiving enough Social Security income to cover Part B premiums would be a bit of icing on the cake." 

You're right that the chart you shared has lots of zeroes because you were working overseas and not participating in the U.S. Social Security system. You had earnings earlier in your work life, accounting for the 34 out of 40 quarters you already have.  

To earn a Social Security retirement benefit and become eligible for free Medicare Part A and Medicare Part B enrollment, you must become 'fully insured,' as the system calls it. That's where you have earned 40 quarters of coverage – or 40 credits of coverage.  

In 2025, you will earn one credit by earning $1,810 within a year. You can earn up to four credits in a year, so it will take $7,240 to get the maximum of four credits in 2025. It takes a minimum of ten years to earn 40 credits. It has taken much longer for you because you had all those years where you didn't have any Social Security earnings being credited towards your record. But you're close. You only need six more quarters, which you can earn in as little as two years: earn four credits in one year and the remaining two in the following year. At that point, you'll become fully insured. 

Just because you're fully insured doesn't mean you have much of a benefit. Your benefit is based on your 35 best earnings years. And since you're only going to have 12 to 15 of them, you're still going to have a bunch of zeroes being factored into your Average Indexed Monthly Earnings (AIME) figure. Essentially, after they inflation-adjust all your earnings over the years, they take your 35 best years. I believe you have some earnings back in the 80s, and those back-in-the-day earnings will be adjusted to more modern times. Specifically, they will ultimately be adjusted to the equivalent dollars in the year you turn 60 years old. Although Social Security will make those inflation adjustments, the inflation adjustment on $0 is still $0. 

Many zeroes will still be averaged into your AIME, leading to the actual retirement benefit calculation. Based on your records, I don't think you should expect more of a benefit than $200-300. Still, that might be enough to cover, or nearly cover, the Medicare Part B premium usually withheld from your Social Security check.  

If you want a precise calculation, I recommend using one of the several online tools to estimate your Social Security benefits. Social Security itself has a modernized tool that's a lot more useful these days, and you can access it through your online Social Security account or just by going to the Social Security website. They've got a Benefit Estimator Tool where you can enter your past earnings – which you presented in your chart – and your anticipated earnings going forward. With that, the tool will give you an estimate of the benefit.  

I don't know anybody who has used that tool and wasn't yet eligible for a Social Security benefit. It may not work for people who don't already have sufficient earnings in their record to be eligible as of today. And you're not eligible for retirement benefits quite yet. You need to earn those last six credits for that to happen. So, you might have to play around with the numbers slightly to fake it.  

There are also some commercial tools, such as MaximizeMySocialSecurity.com, which we use for many of our calculations. That is a paid tool, but it's not expensive. You can enter all those variables (specific dollar amounts, past earnings, and estimates of future benefits), and it will spit out an estimate of your retirement benefit once you become eligible for Social Security as early as age 62. It will give you benefit estimates at any age, from 62 to 70.  

If you're curious about defining your benefit accurately, that's where I would go. However, don't have high expectations – which it doesn't sound like you do. Say you have just the minimum of 40 credits from ten years of earnings where you earned close to that $7,200 figure each year. If that's the only ten years you had – thus, you have 25 years of zeroes in your calculation – your benefit is about $150-160.  

Your earnings were bigger than that in the early years, so your benefit will be slightly higher. One of those tools can tell you how much higher.