Many forego the normal social protections practiced in their own countries, quaint things like health insurance and social security.When you’re young, you think you’re invincible. Death is impossible, disability an abstraction and retirement, being old, these are remote concepts. They don’t think about the worst that could happen, but focus on the unlikelihood of the worst happening to them. One might say the statistical improbability, but that implies a rational perception of the issue, whereas such people are in fact acting on an emotional basis. The situation “feels” OK; I’ll be all right, I can afford it.
A person who takes a job teaching English at a private school in İzmir, for example, may do so for a bit of fun before settling down. Unlike positions at most universities, this one is off the books: no taxes, no benefits, no pension, no social security. The young teacher might rationalize this shortcoming as a tolerable price to pay, considering the unique experience of working in a foreign country. And look, it’s only for a year or two.
Unfortunately, young people live by the same clock as the rest of humanity. Time waits for no man, or woman. One year turns into two, two turn into five, five become eight. Let’s be generous and say this person is earning $20,000 a year. This salary is perfectly adequate for a single person living in İzmir, but in the case of an American, it would translate into a below-average income at home; add a couple of kids to the equation, and it is not only below average -- it’s poverty.
It’s one thing to be a simple worker making a proletarian wage; it’s another to be making that wage and paying no social security taxes. This kind of worker is precisely the one who needs social security most, for he or she is unlikely to be planning for retirement, unlikely to be paying for a private pension plan, unlikely to be saving money.
Thousands of foreigners work in Turkey without being registered for social security, neither here nor in their home countries. Not all of them are young. Some are in their 40s and 50s, working away with not a care in the world, though they begin to sense that something is wrong.
I know one man who was in such a situation, a teacher nearing retirement without a penny to his name. Lucky for him he had friends who checked his background and found a private pension from a US corporation -- $1,000 a month -- and near-eligibility for a British state pension of around 500 pounds a month.
Another teacher in his school is a retired American already collecting a pension of $5,000 a month, a man yet to begin collecting his social security benefits. This brings up one of the important points about social security: It is meant as insurance against destitution and is supposed to supplement a person’s own savings and their private pension. Thus financial planners refer to retirement as a three-legged stool comprised of savings, social security and a private pension.
In the United States, the Social Security Administration pays a maximum $3,200 and a minimum $450 per month. They calculate a person’s pension amount by taking the highest earning 35 years, then averaging the monthly income, adjusted for inflation, then paying 42 percent of that amount, with the maximum and minimum amounts stated. If one has worked 12 years off the books in Turkey, that means there will be a dozen years of zeroes to weigh down the average earnings. Zero seems to weigh nothing, that is until you throw it on a social security scale.
You pay more for life insurance at 40 than when you are 30, and in a similar way, it costs more to catch up with retirement planning the longer you wait. This is a warning to all the uninsured foreigners to remember the riddle of the Sphinx: What walks on four legs in the morning, on two legs at noon and on three legs in the evening?
