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Whats love got to do with it???
Old 07-28-2009, 01:05 PM   #1
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Whats love got to do with it???

I read recently that it is expected that 10% of “babyboomers” will retire overseas in the next 15 or so years. Within that figure (based on my own observations) a large percentage will be single males.


In my own case (56/male/non-working/no health insurance) it made sense financially to move to a city similar to NYC, but with better climate and much lower cost. I had not planned on getting married and having children again, but sh*t happens!


In the USA (I planned my retirement,managed my portfolio) and otherwise spent an inordinate amount of time pondering my future. After my divorce/dot com bubble/etc. I changed my priorties and decided to forget about all that and “live life” every day and collect “experiences” instead of “dollars”.


In the back of my mind (having maxed out SSI) in my thirties (I stopped paying) and new that the benefit would be there for me in six years (when I ER). I also mistakenly assumed that if I died with a “young widow” she would collect “my benefit” for the rest of her life and my children under 21 (½ benefits).


This is a popular (urban legend) here in SA, that has benefitted many an old codger!


The subject came up over coffee at a local cafe recently and I had to do further research!


Much to my “chagrin” I learned that my son can only collect until 18-19 and my wife is not entitled to my “benefits” until she is 60 (another 30 something years)! With a few exceptions.


GOTTA LOVE EXCEPTIONS!


I learned that my Son is entitled to ½ (my full) benefits when I turn 62 and my wife as a caregiver also will start collecting half (until son is 16). If I file and suspend (waiting till 70) to collect my full benefit, I will essentially be getting my (age 66 benefit) for 8 years (starting at 62) when it runs out (for wife & son), leaving me with a much higher benefit for future years as well as dramatically increasing my wife's survivor benefit.


ALL GOOD SO FAR!


The next problem is my wife will only be 40 (when I am 70) and it will be 20years before she can get either a spouse or survivor benefit.


HMMMM!


GOTTA LOVE THOSE DAMN KIDS!


Yup, the answer is to have another child when my son approaches 16!


SO, WHATS LOVE GOT TO DO WITH IT?


Warning! The author is a professional “goldbricker” living a grand lifestyle, with no visible means of support! Readers are advised not to try this at home!
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Old 07-29-2009, 06:36 PM   #2
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Does your wife work? She could build up her own pension and benefits, presumably. I'm much younger than my husband but never depended on him financially, so it's hard for me fully to appreciate your situation.
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Old 07-29-2009, 09:43 PM   #3
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I believe he and his wife live in Peru. I don't think she can contribute to the US SS system, but that's just my guess.

NYEXPAT, nice solution to your problem. You're a real thinker! But will you be "strong" enough to make it happens?

Sam
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Old 07-30-2009, 12:01 AM   #4
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I believe he and his wife live in Peru. I don't think she can contribute to the US SS system, but that's just my guess.

NYEXPAT, nice solution to your problem. You're a real thinker! But will you be "strong" enough to make it happens?

Sam
Sam,
You are correct, we live in Peru and she can not contribute (only collect). I had not considered your second question (I have a overactive libido), but you have a very valid point! We had discussed a vasectomy and I was trying to avoid it, but going ahead and putting a "few of the boys" on ice, now makes perfect sense!

Amethyst,
I certainly understand were you are coming from. The culture here is a bit different in that respect (more 1950's meets Stepford wives)! I also ER'd years ago and convinced my wife to stop working (at 22), so we could have a family and enjoy our lives together. My first wife was a "workaholic" and was one of the reasons we grew apart.

The second child (idea) was just a logical extension of my thinking and remains an option. The reality is we would not need the money unless/until there were substancial inflation in the US or a devaluation of the Dollar.
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Old 07-30-2009, 12:35 AM   #5
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So, do you really expect SS to be around in 20+ years?
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Old 07-30-2009, 09:36 AM   #6
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Gloating about pimping out our dwindling SS funds in a third-world country to finance an "overactive libido", having his "wife" dropping kids for the survivor benefits, and flashing his SS card to buy dear old dad a child bride of his own?

I just put my first poster on ignore.
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Old 07-30-2009, 02:05 PM   #7
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So, do you really expect SS to be around in 20+ years?
The reason so many are "bugging out" is we (collectively) do not expect the USA to be around (in its current form) in 20+ years.

IMHO SSI will continue to exist although in today's dollars it's purchasing power will decline to 30-35 cents. If this were the case I would expect the Nueva Sole to trade at parity and the value of my money would be protected.

Back in the 80's many of my "babyboomer" associates, like myself, opted out of SSI after doing max contributions for 10 years.

I learned long ago, to trust my instincts and zig when others zagged. On one fine day in Sept 2001, I became convinced of a coming financial collaspe and acted accordingly. It was not by mistake that I chose to live in a country that would escape it and continue to prosper and generate high returns on my meager portfolio.

But, this is a subject for a different thread!
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Old 07-30-2009, 03:57 PM   #8
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I'm confused. SSI is Supplemental Security Income - a subset of social security. How can you max out of paying for it when you don't pay for it separately from your normal withholding? This is from the SSI webpage:

"The Social Security Administration manages the SSI program. Even though Social Security manages the program, SSI is not paid for by Social Security taxes. SSI is paid for by U.S. Treasury general funds, not the Social Security trust funds.

To get SSI, you must live in the U.S. or the Northern Mariana Islands and be a U.S. citizen or national."

In any event, how can you max out normal social security in your 30's? You only get credit up to a defined limit each year and it's averaged over 35 years when you turn 62 or older. That means all those years of not working are 0's and lower the amount you can get. If you have only 10 or 15 years contributing to social security, you will get no where near the maximum benefit, no matter how much you made during those years.

It sounds like you are really talking about regular social security and not SSI. That does allow your wife to receive 1/2 your benefit (when you turn 62) plus 1/2 for your child under 16. But it would be the beenfit you are eligible for at 62 - and with only 10 or 15 years of work, it won't be a lot.
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Old 07-30-2009, 04:09 PM   #9
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I am confused, I did not realise that it was possible to opt out of SSI after making max. contributions for 10 years. Based on that, how much do you figure the US government actually owes you?

BTW your wife does know if she is widowed and remarries before she is 60 she will lose any survivor benefits?
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Old 07-30-2009, 05:16 PM   #10
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If you have not already done so, you should read
http://www.socialsecurity.gov/pubs/10137.html#additional plus other info on social security, as well as consult a social security attorney.

You should check the parts referring to Peru and this:

"If you receive benefits as a dependent or survivor of the worker, special requirements may affect your right to receive Social Security payments while you are outside the United States. If you are not a U.S. citizen, you must have lived in the United States for at least five years. During that five years, the family relationship on which benefits are based must have existed."

The way I read this, once you are gone, your widow will not be eligible for survivor benefits unless she s[ends 5 years in the US with you.

Upon further checking, unless you became a federal employee before 1983 or some other class of state or local worker that does not participate in SS, it is impossible to "opt out" of social security if you have earned income. You must have been living on investments and dividends. And, as I mentioned, if all you have is 10 years (40 quarters), your benefit will be very reduced - somewhere in the $400 - $500 a month range.
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Old 07-30-2009, 07:53 PM   #11
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Originally Posted by restonham View Post
If you have not already done so, you should read
http://www.socialsecurity.gov/pubs/10137.html#additional plus other info on social security, as well as consult a social security attorney.

You should check the parts referring to Peru and this:

"If you receive benefits as a dependent or survivor of the worker, special requirements may affect your right to receive Social Security payments while you are outside the United States. If you are not a U.S. citizen, you must have lived in the United States for at least five years. During that five years, the family relationship on which benefits are based must have existed."

The way I read this, once you are gone, your widow will not be eligible for survivor benefits unless she s[ends 5 years in the US with you.

Upon further checking, unless you became a federal employee before 1983 or some other class of state or local worker that does not participate in SS, it is impossible to "opt out" of social security if you have earned income. You must have been living on investments and dividends. And, as I mentioned, if all you have is 10 years (40 quarters), your benefit will be very reduced - somewhere in the $400 - $500 a month range.
SSSH! Mrs. Expat might hear!
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Old 07-30-2009, 11:04 PM   #12
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Just got back from a long day at the Pub and am very tired. I wanted to thank every one for their comments and I will respond tomorrow morning with my thoughts. To clear up a few things:
1. I made a mistake referring to SS as SSI, and apologize for the confusion.
2. Those of us who opted out, were self employed.
3. Most recent statement (with about 20 years of zero's) shows benefits as follows:
62=1200+a month
66=1400+a month
70=about 2500 or so a month.

Regards to all positive contributors, this is a relevant topic that if fully explored "may" benefit others!
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Old 07-31-2009, 12:32 AM   #13
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Quote:
Originally Posted by NYEXPAT View Post
Just got back from a long day at the Pub and am very tired. I wanted to thank every one for their comments and I will respond tomorrow morning with my thoughts. To clear up a few things:
1. I made a mistake referring to SS as SSI, and apologize for the confusion.
2. Those of us who opted out, were self employed.
3. Most recent statement (with about 20 years of zero's) shows benefits as follows:
62=1200+a month
66=1400+a month
70=about 2500 or so a month.

Regards to all positive contributors, this is a relevant topic that if fully explored "may" benefit others!
If you paid income taxes, you should also have paid SS and Medicare taxes, both employer's and employee's shares. Form SE, 1040. Or, if you incorporated your business it should have given you a W-2 and deducted payroll taxes, as well as paid the employer's share.

Of course if you had no income, or paid no income tax....

So what is this you are talking about?
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Old 07-31-2009, 08:33 AM   #14
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haha has it right. Unless you were a minister or come under a few other exceptions, there is no way to opt out of social security if you have earned income, self employed or not. Here is the "offical" list of those who can avoid SS taxes:

There are a number of groups of workers who are exempted from having to pay Social Security taxes:
  • Federal employees hired before 1984 who elected to continue to participate in the federal retirement program instead of receiving part of their retirement under Social Security coverage.
  • State or local government workers (police officers, firefighters, and teachers) hired before March 31, 1986 and participating in their employers' alternative retirement system.
  • Ministers may choose whether or not they will participate in the Social Security program.
  • Self-employed workers with annual net earnings below $400.
  • Election workers earning $1,000 or less a year.
  • Household workers earning less than $1,500 per year.
  • Minor children with earnings from household work but for whom household work is not their principal occupation.
  • College students working under Federal Work Study programs, graduate students receiving stipends while working as teaching assistants, research assistants, or on fellowships, and most postdoctoral researchers.
  • Individuals who are members of certain religious groups such as the Amish and Mennonites.
So, NYEXPAT, which of these groups did you fall into? Voluntary opting out is not a legal option. BTW, I'm from NYC and understand how some folks think the city is an independent nation of its own, but it ain't true :-).

Try this link (unbelieveably long though it might be):

Answer
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Old 07-31-2009, 09:22 AM   #15
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If you paid income taxes, you should also have paid SS and Medicare taxes, both employer's and employee's shares. Form SE, 1040. Or, if you incorporated your business it should have given you a W-2 and deducted payroll taxes, as well as paid the employer's share.

Of course if you had no income, or paid no income tax....

So what is this you are talking about?


You can 'opt out' by just not reporting income.... it is call cheating or fraud... and if you do not get caught... so much the better...
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Old 07-31-2009, 09:39 AM   #16
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So much the better for who? The rest of us who have to pay just get stuck with paying more. Like shoplifting, this is not a victimless crime. In the end we all pay while a very few benefit.
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Old 07-31-2009, 10:18 AM   #17
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Originally Posted by restonham View Post
If you have not already done so, you should read
http://www.socialsecurity.gov/pubs/10137.html#additional plus other info on social security, as well as consult a social security attorney.

You should check the parts referring to Peru and this:

"If you receive benefits as a dependent or survivor of the worker, special requirements may affect your right to receive Social Security payments while you are outside the United States. If you are not a U.S. citizen, you must have lived in the United States for at least five years. During that five years, the family relationship on which benefits are based must have existed."

The way I read this, once you are gone, your widow will not be eligible for survivor benefits unless she s[ends 5 years in the US with you.
The five year rule for non-citizens, came up in another thread as well!
My son who is a US citizen will receive 1/2 my benefit and I feel they will be hard pressed to deny the mother her benefits on those grounds.

If a tax treaty is not signed(with Peru) within the next 30 years, it may be an issue for her "survivor" benefits and may require us to move stateside for a few years, establish residence to get preferential rates at a University for my son.

Obviously, those who have opted to "import" there young wives to the USA, have a "leg up" so to speak.

With regard to the dependent child & Mother benefit: Restonham, I think if you read more carefully you will see it is based on my benefit at 66 and not 62. The total can not exceed 150-180% of my age 62 benefit, but as I will not take my benefit until 70 this is not an issue.

While not germane to the issue, a couple of comments have arisen regarding my "opting out" of SS. I am not an accountant and have no idea what changes in "tax law" have occurred since the 80's. Back then I believe the accountant was able to pay the "non-working" spouse a small salary as the head of the company and then the "rainmaker" took out the profits in the form of dividends?
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Old 07-31-2009, 11:21 AM   #18
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The five year rule for non-citizens, came up in another thread as well!
My son who is a US citizen will receive 1/2 my benefit and I feel they will be hard pressed to deny the mother her benefits on those grounds.
I think you are being a bit naive if you believe that SS will make an exception for your wife because your son is a US citizen. I would imagine that SS employees follow the rules for everyone.

I would suggest that you purchase the Nolo publication Social Security, Medicare & Government Pensions. It is a really good book, sets out all the rules and entitlements in plain English. Chapter 1 covers who is entitled to receive benefits, and as restonham has pointed out, unless your wife has resided in the US for 5 years as your spouse, she will not be entitled as Peru is not one of the countries whose citizens are entitled to collect US benefits. I would not count on them being added, because the list of eligible countries is rather small. I'm Australian and Australia is not on the list, so that was one of our reasons for returning to the US when we did.
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Old 07-31-2009, 11:26 AM   #19
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So much the better for who? The rest of us who have to pay just get stuck with paying more. Like shoplifting, this is not a victimless crime. In the end we all pay while a very few benefit.

For the crook....
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Old 07-31-2009, 11:56 AM   #20
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I think you are being a bit naive if you believe that SS will make an exception for your wife because your son is a US citizen. I would imagine that SS employees follow the rules for everyone.

I would suggest that you purchase the Nolo publication Social Security, Medicare & Government Pensions. It is a really good book, sets out all the rules and entitlements in plain English. Chapter 1 covers who is entitled to receive benefits, and as restonham has pointed out, unless your wife has resided in the US for 5 years as your spouse, she will not be entitled as Peru is not one of the countries whose citizens are entitled to collect US benefits. I would not count on them being added, because the list of eligible countries is rather small. I'm Australian and Australia is not on the list, so that was one of our reasons for returning to the US when we did.
Thanks for the advice. I noticed Chile (next door neighbor) on the list so that is an option. Personally, I would rather continue to avoid the "oppressive" taxes in the USA and then there is the inflation issue! I do not think a move back stateside would make sense for the additional income benefit.
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