The Investment Scientist

Immigrant Professionals: Don’t Deprive Your Parents of Social Security

Posted on: July 30, 2012

Multi-generational families

A councilman from Montgomery County (a wealthy county just outside of Washington DC) once told me: Asian Americans in our county are doing very well economically, but surprisingly Asian American seniors have the highest poverty rate among all ethnic groups.

I know why: their children are depriving them of social security and Medicare benefits.

Most Asian American immigrants are the crème de la crème of their home countries. Armed with intelligence and diligence, they find tremendous success in the land of opportunity, especially in the field of science and business. One only needs to count the number of government contractors of Indian origin in Northern Virginia or research scientists of Chinese origin at the National Institutes of Health to find proof of that.

After they establish themselves here, these immigrants get married, have children, and sponsor their parents to immigrate to the US as well.

The old Asian traditions die hard. Many of these parents live with their children and help take care of the grandchildren.

Ten or 15 years later, the grandchildren have grown up and their children suddenly discover a fine American value: independence. They now want their parents to move out and live independently. Their parents, having given years of their lives to their children so that they can be successful in the US, end up in poverty.

Folks, if you don’t want to take care of your parents when they are old, at least pay them and their social security taxes when they are babysitting for you.

To qualify for social security and Medicare, one has to work for at least 10 years and earn at least $4,520 a year for full credit. (To be exact, 40 credits are needed to be eligible for social security benefits and Medicare. One can earn 1 credit per $1,130 of wages but no more than 4 credits per year.)

Paying them is not enough, however; you must make sure your parents report their babysitting income as self-employment income and pay self-employment taxes.

If you are not doing this or you are not sure if you are doing it right, schedule a discovery meeting (phone call) with me.

Get my white paper: The Informed Investor: 5 Key Concepts for Financial Success.

2 Responses to "Immigrant Professionals: Don’t Deprive Your Parents of Social Security"

Interesting. I wouldn’t have thought of this.


I have the benefit of being a member of that community so I know a bit more.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s


Michael Zhuang is principal of MZ Capital, a fee-only independent advisory firm based in Washington, DC.


%d bloggers like this: