: How to protect your parents if they never paid Social Security? I am helping a friend with some financial advice, but his situation is very unique. His mother (US Citizen) married a foreign national. He worked all his

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I'm not unsympathetic, but insurance of what kind? I don't know how he'd have owned a restaurant but failed to pay into the social security system. Was he paying taxes at all?

As for the 'why,' there's not enough checks and balances to make sure that nothing is done under the table. I believe 40 quarters of work would have qualified her for a benefit of some kind, but you say she didn't pay in either. Both people didn't pay into the system, either on purpose or by not understanding the need to do so. This is a sad situation.

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I am unsympathetic. His mother made a conscious choice to evade taxes that would have provided her with at least a minimal security when she was too old to work. First while as business owner she should have been paying self employment tax on the income they made through the restaurant and his other merchant activities. Second while working in her own career selling Mary Kay and side work she should have paid her taxes on her income from that.

There is a part of me that says good on you for getting by with out getting caught. But her ultimate failure was to plan for her future. She should have known she would be ineligible for SSI and saved for her retirement. Instead she choose to spend her money while benefiting from the government services that the rest of us pay taxes for. Now we will provide her with medicaid as well as welfare benefits. She has placed her son in the unenviable situation of having to either provide for his mother because she failed to do the minimum planning for herself or turn his back on her.

He might be able to find a sympathetic prosecutor who would prosecute her for tax evasion. The government would take care of her needs(food and housing) and she would get her medical care taken care of. He could also move to Alaska. The oil industry provide residents of Alaska with a stipend, there is lots of work for people willing to work hard, and the compensation for that work is pretty good and would likely put him in a position where he is able to provide care for his mother.

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Wow. She really is in a pickle. Even though I can intellectualize that she ought have paid more attention to her family's finances, and assuming she wasn't complicit in her husband's obvious tax evasion, I can sympathize to some extent.

This is a great demonstration of how dangerous it is to just let your spouse handle all the finances because they understand the money stuff. Even if they pay the bills you should have at least a fundamental understanding of the taxes being paid, estate and retirement plans.

So here's some practical advice based on the hole she has dug for herself:

If she owns a home she might want to consider a reverse mortgage to generate some income.
Again, if she owns a home, she might consider moving to a much cheaper home (or moving in with the son) and investing the proceeds in an immediate annuity to create a reliable income stream.
Let's face it, she is likely going to have to work until she is physically unable to do so. Retirement is for people who planned ahead.Hopefully if she is still young enough to get 10 years in, and she starts paying SS taxes now she might live long enough to be eligible for a SS benefit.
She might consider moving to a country with a much cheaper cost of living (perhaps the one her spouse was from) to stretch out the money she does have longer. Be careful about this though, she might not be able to get a job as a non-citizen of some countries.