<P> The current Social Security formula used in calculating the benefit level (primary insurance amount or PIA) is progressive vis - à - vis lower average salaries . Anyone who worked in OASDI covered employment and other retirement would be entitled to both the alternative non-OASDI pension and an Old Age retirement benefit from Social Security . Because of their limited time working in OASDI covered employment the sum of their covered salaries times inflation factor divided by 420 months yields a low adjusted indexed monthly salary over 35 years, AIME . The progressive nature of the PIA formula would in effect allow these workers to also get a slightly higher Social Security Benefit percentage on this low average salary . Congress passed in 1983 the Windfall Elimination Provision to minimize Social Security benefits for these recipients . The basic provision is that the first salary bracket, $0--791 / month (2013) has its normal benefit percentage of 90% reduced to 40--90%--see Social Security for the exact percentage . The reduction is limited to roughly 50% of what you would be eligible for if you had always worked under OASDI taxes . The 90% benefit percentage factor is not reduced if you have 30 or more years of "substantial" earnings . </P> <P> The average Social Security payment of $1,230 / month ($14,760 / year) in 2013 is only slightly above the federal poverty level for one--$11,420 / yr and below the poverty guideline of $15,500 / yr for two . </P> <P> For this reason, financial advisers often encourage those who have the option to do so to supplement their Social Security contributions with private retirement plans . One "good" supplemental retirement plan option is an employer - sponsored 401 (K) (or 403 (B)) plan when they are offered by an employer . 58% of American workers have access to such plans . Many of these employers will match a portion of an employee's savings dollar - for - dollar up to a certain percentage of the employee's salary . Even without employer matches, individual retirement accounts (IRAs) are portable, self - directed, tax - deferred retirement accounts that offer the potential to substantially increase retirement savings . Their limitations include: the financial literacy to tell a "good" investment account from a less advantageous one; the savings barrier faced by those who are in low - wage employment or burdened by debt; the requirement of self - discipline to allot from an early age the required percentage of salary into "good" investment account (s); and the self--discipline needed to leave it there to earn compound interest until needed after retirement . Financial advisers often suggest that long - term investment horizons should be used, as historically short - term investment losses "self correct", and most investments continue to deliver good average investment returns . The IRS has tax penalties for withdrawals from IRAs, 401 (K) s, etc. before the age of 591⁄2, and requires mandatory withdrawals once the retiree reaches 70; other restrictions may also apply on the amount of tax - deferred income one can put in the account (s). For people who have access to them, self - directed retirement savings plans have the potential to match or even exceed the benefits earned by federal, state and local government retirement plans . </P> <P> People sometimes relocate from one country to another, either permanently or on a limited - time basis . This presents challenges to businesses, governments, and individuals seeking to ensure future benefits or having to deal with taxation authorities in multiple countries . To that end, the Social Security Administration has signed treaties, often referred to as Totalization Agreements, with other social insurance programs in various foreign countries . </P>

Social security payments to u.s. citizens are considered