Author Topic: Want MIL to be our "nanny" but need to maximize her social security benefits  (Read 4342 times)

Acg

  • Stubble
  • **
  • Posts: 102
My wife and I had twin boys a couple weeks ago and we've started to come to grips with the fact that it's a lot of work for one person to handle and that we need to hire some kind of help in order for my wife to start working part time from home again.  I know you guys are going to think it's very un-mustachian to pay for help but two babies is just too much for one person to handle and work part-time.  We've decided on getting some help so please don't try to convince me otherwise.  My wife just needs it when I go back to work soon.  Sorry, I'm not trying to be rude, I just don't want the thread to get off topic.

So with that being said, here are some of the unique details.  Please let me know if you have any ideas, I could be thinking about this all wrong.  We're open to anything.

My mother-in-law is 62 and needs to work until 66 when she is eligible for the maximum social security benefit.  At the moment, she's working a job that has a very low salary.  I'm not sure how this plays into the equation but her husband passed away 20 years ago so I believe she is entitled to his SS benefits.  So we want to figure out a way to have her come to our apartment and help my wife during the day when I'm at work until the boys are bigger and things are more manageable. 

We had an "aha" moment earlier but I'm not sure if we're thinking about this correctly.  Could you guys let me know what you think?  First of all, let me say that my MOL would love to do this, she just needs to be taken care of financially.  We also can't imagine trusting a stranger with our babies.  Our idea was to have my MOL start taking her deceased husband's SS benefits now but hold off on taking her own until she was 66 so she could get the maximum benefit.  My wife and I would then pay her whatever the difference was between what she would have been making at her current job minus the SS benefit that she would receive for her deceased husband.  We would do this until she reached 66 and she was eligible for the maximum SS benefit.  So what do you guys think?  Does the way I'm thinking about it make sense?  Would you do anything different?  Thanks so much, we're just so overwhelmed and it would be amazing if this could work out in some way.
« Last Edit: August 25, 2015, 03:26:23 PM by Acg »

pbkmaine

  • Walrus Stache
  • *******
  • Posts: 8558
  • Age: 64
  • Location: The Villages, Florida
She should go to the social security office and have them run some scenarios first. It may work out best for her if she takes her own at 62 and her husband's at 66. Otherwise, it sounds like a plan that could work out well for all of you.

mxt0133

  • Handlebar Stache
  • *****
  • Posts: 1551
  • Location: San Francisco
Rules for Social Security spousal benefit are complicated I would go to the SS administration office to verify the following informatoin.  But base on this article she should have started collecting survivor benefits when she turned 60, with no negative affects on her own benefits.

http://time.com/money/3638427/social-security-survivors-benefits-details/

My understanding is to collect survivor benefit as early as you can, keep working, and deffer collecting your own benefits as long as you can up until 70 1/2, unless you know your life expectancy is lower than SS life expectancy tables.

One other thing everyone should be doing is when they reach full retirement age, they should file and immediately suspend.  Even if the do not plan on taking any SS benefits.  The advantage of this strategy is if you get a terminal condition you can retroactively apply for all the benefits you would have received when you reached full retirement age.

For example you turn 66, file and suspend, then at 69 you get sick and have a few months to live, you can retroactively file for all the benefits that you would have gotten if you would have started collecting at 66.  But if you did not file and suspend, then you could apply for SS benefits at 69 and only get benefits until you passed.  This assumes you do not have a spouse to think about and concerns about maximizing their retirement benefits.


Good luck.

wordnerd

  • Handlebar Stache
  • *****
  • Posts: 1157
It sounds potentially workable. I assume you've already thought about this, but does your MIL want to be a nanny? As you've mentioned, twin newborns are a lot to handle (and physically difficult; I don't know if she's still in good physical shape). If she quits her job to do this, and then hates it, it could lead to resentment/familial strain.

lizzzi

  • Handlebar Stache
  • *****
  • Posts: 2150
Be absolutely sure you are on firm ground with the social security issues. When to take benefits and whose to take is a huge financial decision--it's crucial that your MIL gets it right. Also, it is very hard to know whether she will really enjoy being the nanny or not. I started doing it for DD and s-i-l. The children are 4, 6, and 8. I found that as much as I wanted to love the role, that I do not. There is such a difference in culture and values...such different ideas about child-raising...that I have agreed to play the full role for this oncoming school year, but after that, when all three will be in elementary school and logistics should be easier. for the parents..I am resigning. (Let me say that I do not accept any money for the childcare...and for me that is fine...they try to pay me, but I won't take it.) We all get along well, and I think it would have haunted me forever if I had not tried this. But based on the way they raise their kids...I'm not comfortable being this involved on a day to day basis, and I'll be outta here. Also remember that working for you is going to tie your MIL down in a major way. Her own interests and activities, visits with friends, travel...will be curtailed. Plus there will be times when she doesn't feel well and needs some sick time off. Be sure that you have back-up systems in place.

Acg

  • Stubble
  • **
  • Posts: 102
She should go to the social security office and have them run some scenarios first. It may work out best for her if she takes her own at 62 and her husband's at 66. Otherwise, it sounds like a plan that could work out well for all of you.

Thanks.  I didn't know you could actually sit down with someone at SS.  That takes the uncertainty out of this a bit.

partgypsy

  • Magnum Stache
  • ******
  • Posts: 4504
I know completely unhelpful, but my mother had 3 kids under the age of two when she was getting her master's full-time and then got a full time job as a HS teacher. Parents lived in an apartment with no washer/dryer, and they used cloth diapers. So it can be done, but it was a harrowing experience. As my Mom jokes, she used up all her energy during that time (after that my grandmother moved in to help).   

nobody123

  • Pencil Stache
  • ****
  • Posts: 519
If she's going to claim the income that you're paying her to boost her own SS benefits, make sure you figure out if your tax bill will go up:

From the IRS: "10.If you pay someone to come to your home and care for your dependent or spouse, you may be a household employer and may have to withhold and pay social security and Medicare tax and pay federal unemployment tax. See Publication 926, Household Employer's Tax Guide."

Dicey

  • Senior Mustachian
  • ********
  • Posts: 15550
  • Age: 63
  • Location: NorCal
I know completely unhelpful, but my mother had 3 kids under the age of two when she was getting her master's full-time and then got a full time job as a HS teacher. Parents lived in an apartment with no washer/dryer, and they used cloth diapers. So it can be done, but it was a harrowing experience. As my Mom jokes, she used up all her energy during that time (after that my grandmother moved in to help).   
Just because it can be done, doesn't mean it has to be. If this proposed situation is beneficial to all parties, why not? I'm sure if your mother had had such an option she would have seriously considered it. Oh yeah, I see she did accept help when it finally arrived. Too bad she had to wait.

partgypsy

  • Magnum Stache
  • ******
  • Posts: 4504
I know completely unhelpful, but my mother had 3 kids under the age of two when she was getting her master's full-time and then got a full time job as a HS teacher. Parents lived in an apartment with no washer/dryer, and they used cloth diapers. So it can be done, but it was a harrowing experience. As my Mom jokes, she used up all her energy during that time (after that my grandmother moved in to help).   
Just because it can be done, doesn't mean it has to be. If this proposed situation is beneficial to all parties, why not? I'm sure if your mother had had such an option she would have seriously considered it. Oh yeah, I see she did accept help when it finally arrived. Too bad she had to wait.

Yes I was trying to say it can be done if there are no alternatives, not that she should necessarily do it. I also ditto meeting with SSA administrator to find out the basically the window of income, etc she can still qualify for benefits. 

lizzzi

  • Handlebar Stache
  • *****
  • Posts: 2150
I've been thinking about the OP's situation a lot...I think the starting point for the whole plan has to be...Repeat, Has To Be...the M-I-L making an appointment with Social Security, sitting down and talking with them, and making sure that it is possible to take the husband's SS amount now at 62, and still be able to get her own full amount at Full Retirement Age of 66. She has to be careful not to make a decision now that will short-sheet her financially for the rest of her life.

I'm sure that with two new babies in the house, things are chaotic and overwhelming. But the SS issues are so important...they have to be looked at before the family can really sit down and plan what the childcare job will entail for the M-I-L. And while I hope I'm not sounding like the bad fairy at the wedding, it's only common sense to discuss an exit plan, just in case. There are all kinds of perfectly legitimate reasons why the plan may not work--or it may work for a while but not for the long-term-- and neither M-I-L nor OP and his wife should feel like they are painted into a corner with no escape possible. M-I-L may find a new husband or SO, maybe God forbid she will have a health problem, maybe as the tiny tots develop their own charming little personalities the social dynamics may not be working as well as all had hoped. Who knows? All need to be flexible and ready for anything...but starting off on the right financial footing is crucial.

Dicey

  • Senior Mustachian
  • ********
  • Posts: 15550
  • Age: 63
  • Location: NorCal
I saw what you did, lizzzie. Very smooth.


Edit: Yet I failed to catch the third z. Fixed.
« Last Edit: August 24, 2015, 07:02:22 PM by Diane C »

Acg

  • Stubble
  • **
  • Posts: 102
I know completely unhelpful, but my mother had 3 kids under the age of two when she was getting her master's full-time and then got a full time job as a HS teacher. Parents lived in an apartment with no washer/dryer, and they used cloth diapers. So it can be done, but it was a harrowing experience. As my Mom jokes, she used up all her energy during that time (after that my grandmother moved in to help).   

It's my fault for not mentioning this in my original post but I have brain cancer so it's a little too much to deal with everything on top of that.

Catbert

  • Handlebar Stache
  • *****
  • Posts: 2036
  • Location: Southern California
If MIL is a widow as OP says she could have started collecting on her dead husbands SS at 60 (assuming she never remarried and didn't make more than 15K or so in salary).  That's not necessarily the wisest financial decision but it is/was available.

Dicey

  • Senior Mustachian
  • ********
  • Posts: 15550
  • Age: 63
  • Location: NorCal
It's my fault for not mentioning this in my original post but I have brain cancer so it's a little too much to deal with everything on top of that.
OMG, I lost track of your other thread, you're that guy. (Sorry, I suffer from CRS.) Congratulations on the birth of your babies! I already said this, but now I want to stand on my chair and shout it: hire all the help you need. Every minute you can spend together is precious, why frazzle yourselves needlessly?

Acg

  • Stubble
  • **
  • Posts: 102
It's my fault for not mentioning this in my original post but I have brain cancer so it's a little too much to deal with everything on top of that.
OMG, I lost track of your other thread, you're that guy. (Sorry, I suffer from CRS.) Congratulations on the birth of your babies! I already said this, but now I want to stand on my chair and shout it: hire all the help you need. Every minute you can spend together is precious, why frazzle yourselves needlessly?

The MIL couldn't commit so it looks like we'll be paying for someone else.

And being that guy is no fun.

Dicey

  • Senior Mustachian
  • ********
  • Posts: 15550
  • Age: 63
  • Location: NorCal
Agreed, but now you're the father of twins! Hooray! There's plenty of shit to go around in this life, so celebrating the good stuff is soooo important! How is your wife? Are there details on the other thread?

I wasn't clear on how old your MIL is, but maybe two infants were just too daunting. I hope something else presents itself and mighty soon. My local nextdoor.com group is always posting about great nannies that their kids have outgrown. Most likely your local FB Moms Group has something similar.

(And OMG, thanks for fixing the typo. I'm sorry, I know it's petty that it makes me happy, but it does.)