"Investing" in Medicare and SS

[pb4uski]

Thanks everyone for writing. A few people mentioned the above, that a non-working spouse gets a spousal social security benefit. I know I can Google this but I prefer real people....

Snapshot: I stopped working around 45. All tools say currently, @62 I'd get $2300 a month.

Am I understanding correctly.....that my Wife, who never paid a dime of FICA..... would get $1,150 per month SS ....in ADDITION to my benefit? Meaning....

@62 I get $2300 per month. !@62, she gets $1150 per month....and this is not a death benefit, rather, it's literally $1150 per month even though she didn't work?

You may want to check out opensocialsecurity.com

 

[Bryan Barnfellow]

I didn't intend to turn this into a debate on stay at home parenting, as it is a choice made in each family, and by and large our society aims to support whatever way two parents decide is best for their family. Whether that is two working parents, or one in the home and one out, or single family households, or multi-generational arrangements. Or super rich with a nanny. I don't care.

But, to dismiss the stay-at-home parent as "never working" and to imply they should not be eligible for medicare is simply not accurate or fair.

No need to get all excited. "Working" in this case means W-2 or 1099 income that qualifies for social security and medicare benefits, not a debate on whether a stay at home mom's job is harder or easier that one that works outside the home.

I agree with Aerides' point of view because words matter. In this case these words are often accompanied by an attitude of devaluing a spouse's contributions at home. I believe it's important to point this out as a reminder of the critical value of an unsalaried SAHM or SAHD.

Peace out?

-BB

 

[ncbill]

Something else you may not realize.

If you retire early, after 5 (I think) years of having $0 work income and not paying any Medicare taxes, you are no longer eligible for Disability payments.

Yep, Mom lived solely on lifetime alimony after her divorce, though she could have worked as well.

Had she worked part-time & so met the above criteria she would have been eligible for disability & then Medicare 24 months later.

Which would have been a huge help after she was struck with a rarer form of dementia...in her 40s.

 

[teej1985]

Wow, I had no idea- I thought once I was in, I'm in.

I'll research to see what the minimum income is and if attainable, I'll either do payroll'd work, or salary myself and pay the taxes that way.

Salary yourself? Optionally? One doesn't usually have the choice of manufacturing earned income.

 

[Fermion]

OP, how could you navigate to retire at 45 and not know this stuff about SS spousal benefits? Do you just have an obscene amount and this is sofa cushion money?

Are you navigating your way through the ACA and subsidies? There are some eye openers there too. Someone with millions can get free health insurance.

 

[isisdave]

Definitely get the kids employed by you. You can contribute to a Roth IRA for them up to the annual limit, and they pay no income tax because their income is less than the threshold for having a tax liability.

My experience was 15 years ago in California, and there was no requirement for Workers Comp or Unemployment either in this family-business arrangement, but check those requirements for current rules.

Also at that time, kids under 18 working for their parent (meaning sole proprietorship or partnership of both parents) didn't have to pay Social Security taxes. I don't know if an LLC would be considered a partnership. See IRS rules here.

Our son worked as our janitor from about age 12 to 18, making about $2-3k per year. He kept his earnings, and we put the same amount into a Roth IRA. At 29, he was stunned to discover it was worth $29,000. Since it had existed more than 5 years, he pulled most of that out tax-free for a down payment on a house.

 

[JeffreyC]

You’ve gotten lots of good feedback here.

Your payroll services is very high. I use Gusto. Dead easy to use, they handle all the filings for the business and is very affordable.

 

[almost there]

This might help. Worksheet from SS. https://www.ssa.gov/oact/quickcalc/spouse.html
About 33% at 62 and so on...