Q: I have $50,000 in certificates of deposit that I need to roll over. I'm looking for "ethical investing" alternatives. Any ideas?
C.M., via e-mail
A: Defining "ethical investing" can vary from individual to individual, says Patrick Gilmore, a financial planner in Wayne, N.J. In general, he says, people classify it as investing in companies that do not cause illness, death, or harm to the environment.
If you have a long-term horizon (greater than five years), Mr. Gilmore believes that mutual funds may be an option. Many companies now offer socially responsible funds that invest in companies that they believe are socially responsible Some of these include Aquinas, Calvert, Citizens, Ave Maria, Pax, and Parnassus.
If you want to stick with certificates of deposit, Mr. Gilmore suggests that you consider laddering. This is when you purchase CDs with different maturities (one-year, two-year, etc.) and interest rates. If you decide to go with corporate bonds, they can be ones issued by companies that you believe are socially responsible.
Q: Massachusetts is one of seven states whose teachers don't participate in Social Security. Having retired after 40 years of teaching, however, I have heard that I could be entitled to half the benefits that my wife will receive when she begins to collect next year. We have spoken to Social Security representatives and received mixed messages. They said: (1) that my wife would have had to earn at least 50 percent of the household income for the last 23 years; (2) that my wife would have had to earn at least double my income; (3) that the female could collect under the regulations, but being a male, I cannot. The Massachusetts Teachers' Retirement Board has verified my retirement eligibility for Social Security. It states that I had at least 20 years of credible service by June 30, 1982. Since we have a female friend in the same situation who is now collecting, we are concerned that we are being told we aren't eligible.
E.C., Framingham, Mass.
A: Based on your question, certified financial planner Robert O. Smith, of Exton, Pa., assumes that you haven't had any earnings subject to Social Security taxes. That being said, he believes the confusion is probably coming from the bullet point listed
under "When won't my Social Security benefits be reduced?" in SSA Publication No. 05-10007. It states that, generally, your Social Security benefits as a spouse, widow, or widower will not be reduced if you received or were eligible to receive a government pension before December 1982 and meet all of the requirements for Social Security benefits in effect in January 1977.
Based upon your 20 plus years of service by June 30, 1982, it appears that you qualified under the first part of the exception. On the other hand, Mr. Smith assumes that you were not at least age 62 by January 1977 and therefore did not meet all of the requirements for Social Security benefits. Remember, the earliest that you can start receiving retirement benefits is age 62.
Therefore, while you may be entitled to spousal benefits, they're reduced by two-thirds of your government pension, which might reduce your spousal benefit under Social Security to zero.