Should I Pay into the US Social Security System so That I can Receive Medicare Benefits Later in Life?
Q&A: Should I pay into the US Social Security system so that I can receive Medicare benefits down the line?
Q: I am considering whether it would be worthwhile for me to pay into the US social security system, in order to receive a Social Security payment and receive Medicare benefits later on. I am a US citizen, self-employed and living in Spain since 1994. I was born in 1962. I have worked in the US as well, for a total of about 3 years. I file income taxes here in Spain (as I am based here) and the US, though I have not yet had to pay taxes to the US. I pay for social security here in Spain but would like to look into whether I can also pay into the US system as well, for some extra coverage and to secure Medicare for later. To do this, I would need to know how much I would need to pay and what the return would be, and whether I would indeed be covered by Medicare (when in the US, as I understand that Medicare does not cover outside the US). Can you please advise?
A: To be eligible for Social Security you must have paid into the system for 40 credits (approximately 10 years). http://www.ssa.gov/retire2/credits2.htm
You can certainly pay in to the US system. This is calculated on Schedule SE, generally used in conjunction with Schedule C. The tax rate is 15.3% of your net self-employment income. This represents both the employer and employee portions of Social Security and Medicare.