ivinsfan
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Not that the OP needs to give him money but you could always buy groceries, clothes and such without the SB losing benefits.
Stepbrother Doesn't Work - Consequences/Prognosis (?)
- Thread starter pc95
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Not that the OP needs to give him money but you could always buy groceries, clothes and such without the SB losing benefits.
Montclairbobbyb
Recycles dryer sheets
I don't get this discussion...
I HOPE AND TRUST your step brother is someone you CARE about. So why don't you sit down (over dinner, say) and simply ASK HIM what his future plans are for financial independence, and SHARE ANY AND ALL OF YOUR CONCERNS with him... be BRUTALLY HONEST, but above all... be a BROTHER to him!
No need to seek cheap advice from strangers like us.. YOU'RE FAMILY... YOU can work this out.
Peace, brother.
BB
I HOPE AND TRUST your step brother is someone you CARE about. So why don't you sit down (over dinner, say) and simply ASK HIM what his future plans are for financial independence, and SHARE ANY AND ALL OF YOUR CONCERNS with him... be BRUTALLY HONEST, but above all... be a BROTHER to him!
No need to seek cheap advice from strangers like us.. YOU'RE FAMILY... YOU can work this out.
Peace, brother.
BB
Brat
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Spot on. I had a nephew on SSI (mental illness), my mother wished to leave him part of her estate. Her attorney told her that it needed to go into a special needs trust (which is sponsored by an Oregon non-profit) else he loses his SSI benefits. Mother was advised that an SSI beneficiary cannot disclaim an inheritance.
As someone else advised to not give your stepbrother cash, give him things he can use.
Delawaredave5
Full time employment: Posting here.
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I try to focus on my "hula hoop" of responsibility.
https://grouptherapyla.com/stay-in-your-hula-hoop/
https://grouptherapyla.com/stay-in-your-hula-hoop/
Extra Medium
Recycles dryer sheets
Reminds me of Jakob Lund Fisker at Early Retirement Extreme, living an intentional life of simplicity. Doesn't sound like he needs (or maybe wants) any help to me, based on your description.
I wonder if a lot of people outside of the early retirement community might be thinking about interventions for all their FIRE friends in this way, too!
I wonder if a lot of people outside of the early retirement community might be thinking about interventions for all their FIRE friends in this way, too!
In a number of places, senior low income housing is available. You have to get your name on a list, and you have to take what’s available. But I’ve been in a few of them and they’ve all been very nice.
And the interesting thing is the ones that I’ve seen take 1/3 of your income. So if he only gets $600 a month in Social Security when he decides to collect it, they will only take $200 for him to live in an apartment. That is what we call a smoking deal.
My mother lived in low income senior housing, most of her money was tied up in an unproductive asset called her home. It was not going to sell. It took 11 years after she died and about six before she died before it sold. There were lots of reasons, but anyway she got to live in relative comfort and safety for the last few years of her life in this place. The only thing she didn’t have was a dishwasher. I’ve lived without one for my whole life practically so it’s not that big of a deal.
So, to put your mind at ease OP, do a little searching for low income housing for seniors. See what’s around you, what other information you might need to feel better about this, and stop worrying. The one thing I’ve understood about people and I have seen it more and more as I get older is until you get extremely old we are very very resilient. And for the most part we land on our feet. Sometimes it’s a pretty hard fall but we get there.
And the interesting thing is the ones that I’ve seen take 1/3 of your income. So if he only gets $600 a month in Social Security when he decides to collect it, they will only take $200 for him to live in an apartment. That is what we call a smoking deal.
My mother lived in low income senior housing, most of her money was tied up in an unproductive asset called her home. It was not going to sell. It took 11 years after she died and about six before she died before it sold. There were lots of reasons, but anyway she got to live in relative comfort and safety for the last few years of her life in this place. The only thing she didn’t have was a dishwasher. I’ve lived without one for my whole life practically so it’s not that big of a deal.
So, to put your mind at ease OP, do a little searching for low income housing for seniors. See what’s around you, what other information you might need to feel better about this, and stop worrying. The one thing I’ve understood about people and I have seen it more and more as I get older is until you get extremely old we are very very resilient. And for the most part we land on our feet. Sometimes it’s a pretty hard fall but we get there.
Cerys,
My SIL worked with her husband at two different businesses that he/they owned.
They got divorced around retirement age.
Turns out he never claimed any of her labor, so she didn't qualify for SS.
She lives off of $700/month that she somehow qualifies for, and lives in housing you are describing that takes 1/3 of her income.
The place is small, but livable. I'm glad she has it.
FYI: She qualifies for her ex's full SS when he dies. Kind of a weird deal.
JP
My SIL worked with her husband at two different businesses that he/they owned.
They got divorced around retirement age.
Turns out he never claimed any of her labor, so she didn't qualify for SS.
She lives off of $700/month that she somehow qualifies for, and lives in housing you are describing that takes 1/3 of her income.
The place is small, but livable. I'm glad she has it.
FYI: She qualifies for her ex's full SS when he dies. Kind of a weird deal.
JP
pb4uski
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
JP, that $700 is probably based on 50% of the husband's primary insurance amount (his benefit at his full retirement age). If a spouse doesn't have enough to qualify based on their own work record they would still be eligible for retirement benefit payments of 50% of their spouses's PIA. However, that 50% is only if the recipient waits until their FRA to file... if they file earlier than therir FRA then the 50% is further discounted and could be as little as 35% if they file at age 62.
Thanks for note.
I think to live off of $600 by oneself in most USA places, one must be almost or completely dependent on government (as stepbrother is now). To some extent (in some fashion) many people are dependent on government to begin with - but not completely. I checked SS Min. Benefit for 11 years of service from recent article, and it was $43/mon (no where near $600). Would a Senior Assisted Housing take you in if you have no or next to no income? A couple food joints I saw are paying ~$17/hr. currently. Quick math has that at ~$2100/month and thats at no/little experience necessary - of course that's not the most desirable of work. As wrote earlier, I've had dozens of conversations over many years on trying for school earlier (for 5-8 years), then work (contiguous 10-12 years). Believe in the 2000's he did pick up some classes, but did not stick. Haven't even tried those conversations the last few years though. Landing on feet hard is probably the best that could happen.
My father ( divorced) was a high earner- but a poor saver. He had only his social security check. For $400 a month, he had a studio apartment with all utilities except internet and cable. He was able to get internet for $10 a month. He got food stamps, he got a free phone, he had Medicaid- all his drugs covered, a home health aide, food stamps, free transit pass.
Yes- a senior place would take you if you had $43 a month. If your SS benefit was only $43, you would qualify for SSI and that would raise you to at least a few hundred a month.
That makes sense regarding how she gets the $700/month.
I know she doesn't have positive things to say about her ex. He is ten years older, and she is very determined to outlast him. She has dealt with some medicine issues recently.
JP
That was actually the recommended way for us to do it. And it makes sense. Especially now that I’m there.
How it was explained to me was that if the business earns enough to create let’s say a $3000 a month benefit. If you split up the benefit so you each get $1500 and you stay married, your benefit total is $3000 which sounds good. But if your husband dies. you lose his benefit and you only get $1500.
If only one of you gets the $3000 benefit then the other person gets the $3000 benefit when the spouse dies. It’s a little loophole in the Social Security system.
Forgive my easy no coffee yet math.
But everything in life is a crapshoot. I could’ve never envisioned my husband getting a fatal brain tumor. And yet he did. Because in my family I have yet to see a husband outlive a wife it’s just never happened in my lifetime, my assumption was he would go before me. That I was kind of prepared for. As much as you can.
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Music Lover
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Did she work off the books to avoid paying deductions?
pb4uski
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
That's an interesting angle that I hadn't ever thought of... let's say a married couple run and both work in a proprietorship and file a Schedule C and pay self-employment taxes. I suspect that the Social Security credit for the payment of the self-employment taxes goes to the person whose SSN is input on Schedule C so the spouse whose SS is not on Schedule C never gets any credit for having paid SS taxes.
I suspect yes. So not legal. The sad part is that it worked out great for him, and she is paying the price for his "business" decisions.
I also think he had a bunch of cash hidden away prior to the divorce.
I guess it is, what it is.
JP
Music Lover
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
It takes two to tango. She also benefited from off the book income with no deductions, and unfortunately is now paying the price.
They call this the Cliff effect and it’s a big issue. I volunteer with lower income people and many want to get out of the cycle but it is extremely difficult. They’re not lazy. They’re not working the system. They are struggling to get by and often don’t have the advantages many of us do/did.
No relatives to babysit so they can work. No help with transportation. No education so limited job opportunities. There’s a lot stacked against them. Add to that this Cliff effect where they lose childcare, food, housing, and other benefits because they got a dollar an hour raise, and it’s a terrible situation.
OPs brother doesn’t fit this category, obviously, but I think many/most on public assistance would rather be self sufficient - at least those I’ve worked with. It’s embarrassing for them to pull out a snap card when there’s a cute guy behind them in the grocery line. They have hopes and dreams for their kids like we do, and they hate that they’ll likely never achieve them.
Some ended up there due to choices, but many just had bad luck and/or less help than others. Our system needs a lot of improvements to really help people lift themselves out of poverty, but it’s an extremely complex issue.
As for OPs brother, the advice that it’s not your problem is true. That doesn’t change the fact that he’s family and maybe a good friend. There will always be a sense of duty to him, imo. Hopefully you can find a way to manage that through all the other resources he has available.
Well, it could be perfectly legal. My late husband and I had a sole proprietorship, and because we were married we were co-owners. I didn’t collect a paycheck. Neither did he. We paid ourselves under draws from our business account. We just took the money when we wanted it. Under sole proprietorship it’s perfectly legal.
Having to draw paychecks would’ve been an unnecessary expense in our case. I know a number of small mom and pop type companies who are doing the exact same thing. Completely legally. It’s just different from how other people do it.
As a sole proprietor, about 15-16% of our money went in quarterly to pay his Social Security tax. We are responsible for the whole thing. That’s what they call the self-employment tax.
If we had issued paychecks, we would have had to file taxes far more frequently, and probably, given all the stuff going on because we had withdrawals for our retirement accounts, and we had health insurance, with those things we would’ve ended up with a paycheck service that we would’ve paid extra money for because it was just him and me. All of those things are unnecessary expenses when you run as a sole proprietor.
If you’ve never owned your own business, it would seem illegal to you. In reality it probably was not illegal at all. I’m not gonna comment on the divorce because that is not my business. It’s a rare thing to find a divorce that is nice although I have seen a few.
pb4uski
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Cerys is right... that is the way that most sole proprietorships work... nothing improper at all.
Koolau
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Yep. Parents did it for years although theirs was considered a "partnership." When they sold the bus. to 2nd gen., we went to an S-Corp. Had its own set of advantages and disadvantages. 3rd gen is now an LLC. Different strokes, etc. etc. Governed by different laws. YMMV
Cerys,
Thanks for the explanation. I've never had a small business, or heard of this type of income payout. So it was possibly above board.
What I do know is that she was heavily involved running their home office for years, and she didn't qualify for SS, but he did.
So as far as SS is concerned he was the only person working. Seems strange.
JP
I don’t know how often this happens but I have known two women who became disabled and because of doing this did not qualify for ssdi or early medicare because no credits. When the disabling condition requires care from the spouse or other this is doubly burdensome
RetiredHappy
Thinks s/he gets paid by the post
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I am under the impression that even as a sole proprietor, you still need to pay self-employment taxes, i.e. social security and medicare (FICA).
https://www.nolo.com/legal-encyclopedia/how-sole-proprietors-are-taxed-30292.html
Self-Employment Taxes
Sole proprietors must make contributions to the Social Security and Medicare systems; taken together, these contributions are called "self-employment taxes." Self-employment taxes are equivalent to the payroll tax for employees of a business. While regular employees make contributions to these two programs through deductions from their paychecks, sole proprietors must make their contributions when paying their other income taxes.
Another important difference between employees and sole proprietors is that employees only have to pay half as much into these programs because their contributions are matched by their employers. Sole proprietors must pay the entire amount themselves (although they can deduct half of the cost).
The self-employment tax rate is 15.3%, which consists of 12.4% for Social Security up to an annual income ceiling (above which no tax applies) and 2.9% for Medicare with no income limit or ceiling. See the IRS website for current Social Security annual income thresholds. Self-employment taxes are reported on Schedule SE, which a sole proprietor submits each year along with a 1040 income tax return and Schedule C.
https://www.nolo.com/legal-encyclopedia/how-sole-proprietors-are-taxed-30292.html
Self-Employment Taxes
Sole proprietors must make contributions to the Social Security and Medicare systems; taken together, these contributions are called "self-employment taxes." Self-employment taxes are equivalent to the payroll tax for employees of a business. While regular employees make contributions to these two programs through deductions from their paychecks, sole proprietors must make their contributions when paying their other income taxes.
Another important difference between employees and sole proprietors is that employees only have to pay half as much into these programs because their contributions are matched by their employers. Sole proprietors must pay the entire amount themselves (although they can deduct half of the cost).
The self-employment tax rate is 15.3%, which consists of 12.4% for Social Security up to an annual income ceiling (above which no tax applies) and 2.9% for Medicare with no income limit or ceiling. See the IRS website for current Social Security annual income thresholds. Self-employment taxes are reported on Schedule SE, which a sole proprietor submits each year along with a 1040 income tax return and Schedule C.
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