Smart Money: Social Security difficult to increase after health issues

Dear Bruce: My wife is 59 years old and has not worked at all for the last couple of years. She had worked full time since 1962 before her health deteriorated. Her only retirement is Social Security income. I would like to build up what she has earned. Can I pay a lump sum to Social Security based upon her last year of employment to increase her monthly check when she reaches 62? T.A., Winchester, Va.

Dear T.A.: The only way I know of to do something like this is to establish a "company" and put your wife on the payroll of that company. Report that amount of money as income, which you will have to show on your income tax return, and then you would make the appropriate contribution on her behalf and also withhold an equal amount from her paycheck. It would seem that this would be a very expensive venture to modestly increase her annuity, and the Social Security Administration may take a very narrow view of this charade. Unless she is able to work in a legitimate enterprise, I don't know of any way that your goal can be accomplished.

Dear Bruce: I believe that you have been known to say that you don't like index funds. From what I have read and heard, they seem like a good low-cost way of investing. Can you please elaborate? S.K., Boise, Idaho

Dear S.K.: I don't know where you got that idea. I have no problem with index funds at all. Over a period of years, they have returned somewhere between 10 percent and 11 percent, which is not bad overall. Like everything else, a degree of investigation is required, but in no way have I ever said categorically that I would not invest in index funds.

Dear Bruce: Our credit got hammered as a result of a death in the family some years ago, and it's been difficult to rebuild. Is there any way to have the bad items removed from your file, or is it just a matter of time? We've been granted some credit and have some good ratings, but the bad ones remain. We went from excellent to poor. We paid off all of our notes without bankruptcy. We had one judgment also paid off, but it is still in the file. Is there something that I can do to help my credit? K.F.

Dear K.F.: You've got a good handle on things. I can tell you from personal experience that there is life after bad credit. It takes time to rebuild, but you are doing exactly the right thing by establishing a new account here and there, paying on time and paying off all of your old obligations. Most of those will hang around for about seven years. But, as your credit profile increases, you will find that more lenders will be happy to consider you for future accounts.

Dear Bruce: I would like to know how I can take over my own escrow account and pay my own taxes and insurance at the end of the year. Is this possible? I owe $30,000 on an original $55,000 loan. R.B.

Dear R.B.: If your mortgage contract requires that payments be made to the insurance company through an escrow account, there's not much you can do about it. From the mortgage company's perspective, it would be a whole lot easier to allow you to make your payments individually if you've had an unblemished payment record. The mortgage company is not making a profit on these escrow payments. The only reason mortgage companies insist on escrow accounts is so people who are paying mortgages cannot put property at risk by not paying taxes.

Dear Bruce: I have an idea for an invention, and I don't know where to start. I am tempted to use one of these invention placement assistance companies.

Where do I begin to look for help in pursuing ideas without getting ripped off? I've read about the paperwork for getting your patent ideas started. It is tremendous and overwhelming. I have thought about using reputable companies that help people. Which would be more cost effective? Can people do it by themselves? I have approached, without any commitment, a company and couldn't find any negative information from the Better Business Bureau. However, they want me to shell out $10,000. What will I get for my money? A.A.

Dear A.A.: In my opinion, what you will get is a large hole in your wallet. Attorneys General across the country have found that these companies talk a lot, but deliver little. There are university programs which I'm sure you can find on the Internet that will help you evaluate your idea for a reasonable cost. The reality is that your best shot is to start with the universities and patent attorneys who will guide you. The patent process should cost you no more than $5,000.

(Bruce Williams is a national radio talk show host and syndicated columnist. He can be contacted through the Business Journal by writing to PO Box 1365, Springfield 65801 or via e-mail at sbj@sbj.net.)