Investing

Q: I read an article about divorced wives being able to collect on their ex-husbands’ Social Security and the ex-husband doesn’t even have to know.

I have a hard time figuring out how anyone can get half of her husband’s or ex-husband’s Social Security when the calculations don’t add up.

I am 70 years old. I still work so I can keep up with the $10,000 property tax. I will never be able to retire; yet women who have never worked, or worked off the books, are collecting Social Security. That’s money from my paycheck. Why is our government so dumb?

A: How you see things is correct, or would be, if Social Security were an actual pension plan.

If that were the case, all benefit payments would be proportional to the employment taxes paid in. But Social Security is NOT a pension plan.

It is a social program designed to provide at least some amount of income for everyone.

This includes the disabled, former spouses who were married for at least 10 years, and underage children of deceased Social Security recipients. It doesn’t compute as transactions for individuals. But many argue it does compute for the greater good.

Let me give you an example. Suppose a woman marries, has children and elects (at her husband’s request) to be a full-time mom.

Suppose that 30 years later, her husband dumps her for a younger woman. This leaves the full-time mom out in the cold, with no work history and no retirement income. She could be destitute.

I have met women in their late 50s in this position. For them, having rights to draw benefits based on the work record of a former spouse may be all they have. In this instance, Social Security functions as an instrument of compassion and care.

Similar circumstances apply for people who are born with severe disabilities or with a mental illness that renders them unemployable.

The disabled can either draw benefits based on their work record, or when that record isn’t sufficient to qualify for benefits, they qualify for a program known as SSI — Supplemental Security Income.

While some of the disabled are those wishing to avoid work because of, say, a “bad back,” the reality is there are hundreds of thousands of people who are blind, mentally impaired, mentally ill or otherwise incapable of supporting themselves.

Are they taking money from you or me? No. A portion of the employment tax is earmarked for people who are disabled. “There but for the grace of God” is where we would obtain our income if we were disabled.

We have a big choice to make in the next few years. We can point fingers at cases of imagined injustice or unfairness and get nowhere. Or we can take a happier road. We can appreciate the gift of life. We can man-up (and woman-up) enough to pay for the extra years of life.

The alternative is to duplicate the living and health conditions of the many nations where life is short and few live long enough to retire.

Questions: scott@scottburns.com

Copyright 2013,

Universal Press Syndicate