When we invited my MIL to come live with us, she was just about to turn 55. I know what you’re thinking, because that’s what I was thinking: 55! Exactly 10 years to get 10 years’ worth of social security credits before she turns 65!
My MIL is not FI. She is…super duper not FI. She grew up and lived her whole life in the Soviet Union until that stopped being an option rather abruptly, and then she lived in the country-formerly-known-as-the-Soviet-Union, and all of her savings and her family’s savings were wiped out and the economy went into a free fall. She really truly lived paycheck-to-paycheck. There wasn’t money for medicine or to throw away produce that had gone bad. Every single kopeck was taken up by life expenses, and then some. When she came here three years ago, her salary was about $200 a month.
So when I say she is 100% dependent on us, I mean it. We cover her health care, her housing needs, her groceries, her toothpaste, her hair dye, her swimsuits, her winter coats, her dentist bills. She has zero money.
But – at 55, with a green card to the United States, she was in a perfect position to at least start contributing to the system so that at 65, she can qualify for Medicare and perhaps even get something from social security.
Except also, she doesn’t speak English, she can’t drive, and her health is in bad enough shape that working outside of the home isn’t realistic, especially in the types of jobs that are typically available to people who don’t speak English and can’t drive – housekeeping, construction, bus driver…
Since she was planning on living in our house, and doing part-time care of the baby, I looked into hiring her, to pay her for what she was intending to do anyway. At the time, we didn’t have any extra money, at all, but I thought maybe we could pay her a wage and charge her room and board, and then pay taxes on those wages.
It turns out you don’t have to pay taxes to a family member providing domestic work (at least, in our situation), but you can. So we, on our own volition, agreed to start shoving money at the government when we didn’t have to. Smart, right?
Well, I hope it’s smart. If she stays in American until she is 65 (oops, 67, I guess), and then gets Medicare for the rest of her life (meaning we won’t be responsible for her health care anymore), it will pay itself back in about 15 seconds. She also will maybe get a small pension, although there are so many variables that the calculators consistently tell me different things (today it’s saying $300 a month…which seems like a pretty good deal for the rest of her life).
So we pay her a salary of $1000 per month (details of that breakdown can be found in a future post). In the past, we have done $12,000 per year, although now I’m scaling that back to $7,000 per year, which is the $1,000 per month that she’s actually living in our house. That will cover the minimum required for 4 credits per year, with some wiggle room in case I don’t understand something (always possible). The payroll taxes are then 15% of that, so this year we will be sending in $1050.
From what I understand, she could potentially qualify for SSI when she turns 65, which is the safety net for people who haven’t had enough credits, if she doesn’t have enough credits. However, only if she’s a citizen, and not a permanent resident, which she is now. If she’s a permanent resident, she still has to have those credits. If she becomes a citizen, she could potentially qualify for SSI without quarters, which then means we’ve paid a bunch of taxes for nothing.
There are several foreseeable paths:
- She gets a job outside of the house, works for another 6 years, makes her own credits, and the credits we already paid for her will give her enough to retire at 67. Likelihood: 4/100. Yay! We are glad we contributed.
- She moves back to the home country and isn’t interested in living in America anymore, and the credits we paid for her are useless. Likelihood: 25/100. FUCK WE ARE SO PISSED WE WASTED THE MONEY.
- She becomes a United States citizen, and then can qualify for regular benefits and we wouldn’t have needed to spend all this money. Likelihood: 25/100. Meh, waste of money but it was done in good faith.
- She continues on the path of least resistance and stays a U.S. permanent resident, and because we have paid all this money, is then eligible for either regular social security and Medicare or safety-net social security and Medicaid, and then the return on our investment is like a billion to one. Likelihood: 46/100. THANK FUCKING GOD WE DID IT.
Basically, nobody knows what the future holds, and this could all be a bunch of money we are dropping off at the IRS for no good reason (I mean, it’s a good reason, right? It funds schools and roads and libraries?). If she decides to become a citizen, that will become clear in the next year or two, because she is eligible to apply after 5 years of living in America.
Is this the right thing to do? Is it the FI thing to do? Who fucking knows, but it is the thing we are doing, and we are choosing to do it because – because once she hits her retirement age, there’s no way to rewind and get those credits we are missing.
Drawbacks: obviously, the money for taxes, but also, we can’t claim her as a dependent even though she is wholly dependent on us. Benefits: hopefully, 30 years of free health insurance and maybe even a small monthly check.