It's not so much the benefits per se, though that's part of... but the number of recent work credits (the key being RECENT) in the even you become disabled, prior to retirement or getting social security.
Unless you have other contributions to get the max work credits each year, taking the SE exemption could prevent getting those credits. So, even though you work full-time, you might not be eligible for SSDI because you didn't pay in recently.
It's like keeping up insurance premiums.
I always tell people that unless you know exactly what you're doing, are sure you have full credits for the year or are independently wealthy enough to care for yourself if you become disabled, it's far better to ignore the SE exemption. Saving a few dollars each year just isn't wroth the potential loss of tens of thousands of dollars in disability benefits. And if you end up disabled... that's a massive loss. When it happened to my husband, it was a horrible loss for us, a loss that impacts us every month because his monthly SSDI benefit is about half what it should be -- all because we didn't know that the job he was in was exempt from paying in to SS. We had no idea how it worked... we just though it was great we didn't have to pay out the taxes each month. Nobody ever explained the consequences to us... we were just told he was exempt from paying in... and when you're a broke college student, that's great news! We had no idea, or reason to think, he'd have an accident and would become disabled so young.
I think it's one of those things that most people don't really "get" until they have it happen to them. |
