The Social Security Administration & Social Security Number
The US and Israel share a tax treaty which prevents and regulates tax duplication.
The tax treaty does not include payments due to social services and, as of today, no other treaty regulates this matter between the two countries.
Thus, self-employed and general partners in Israel are required to pay dual social security taxes in the US,
at rate of 15.3% of their net profits, before foreign social security and taxes.
Taxation for independent contractors is known as Self Employment Tax and is comprised of:
12.4% social security payments and 2.9% Medicare taxes.
These payments accumulate as retirement benefits, payed from age 62, or disability benefits payed at an earlier age (certain conditions apply).
In order to be eligible for retirement benefits in the future, one must pay social security fees for 10 years and accumulate 40 credits.
In 2016, earnings exceeding $1,260 are worth 1 credit, and a total of 4 credits may be gained per year.
Given that National Security payments are based on actuarial data, it is difficult to estimate the amount of received pensions.
The National Security website provides a handy tool for calculating an approximate sum.
Although social security benefits may be withdrawn from age 62,
the more one prolongs their withdrawal, so would future monthly payments grow.
If one withdraws benefits at the age of 62, he will only be eligible for 75% of the allocated payments since he has yet to reach retirement age.
In order to get the full amount, a person must initiate payments at the age of 65 or 67, depending on the year of birth.
The economic state of Social Security Administration today
US Social Security cash flow has been in the negative since 2010, on account of Baby Boomers getting older as their life expectancy increases.
Consequentially, the US government is giving out more money than it takes in.
it is currently able to make up for this via interests of accumulated balance.
Nevertheless, US authorities disclose that this money will last until the year 2035,
after which there will most likely be transfer payment offset.
*The US-Israel Tax Treaty states that payments received from the other country are exempt from taxes in both countries.