Author Topic: [Over 40] For US folks, how does Social Security play into your plans?  (Read 1697 times)

DeskJockey2028

  • Bristles
  • ***
  • Posts: 416
  • Age: 45
  • Aiming for 2028
For those of us over 40, where Social Security is a bit closer (anywhere from 22 years on down) do you factor it into your retirement plans? If so, do you do it at 100%? Why, or why not?

nemesis

  • 5 O'Clock Shadow
  • *
  • Posts: 51
Re: [Over 40] For US folks, how does Social Security play into your plans?
« Reply #1 on: October 10, 2017, 12:21:12 PM »
Personally I see it as a bonus.  I'm not counting on it, but it will be nice to have it.  My stash is my retirement plan, nothing else is certain or can be as reliable as my stash.

TempusFugit

  • 5 O'Clock Shadow
  • *
  • Posts: 65
  • Location: In my own head, usually
Re: [Over 40] For US folks, how does Social Security play into your plans?
« Reply #2 on: October 10, 2017, 12:34:53 PM »
I use the SS website benefit estimator and then I reduce it by 20% for use in my calculators (FIREcalc, etc). 

https://www.ssa.gov/OACT/quickcalc/index.html

Not counting it seems silly.  I have a future pension that I also discount slightly and plug into my calculators. 

I know that we all have reservations about the solvency of SS and it's been in vogue to say that we won't see any of it, but I think that's simply untrue.  I'd be shocked if we even reduce the benefit.  Rightly or wrongly, I just don't see any political will in this country to tackle that.  As a nation, we have been shifting resources toward the older generation for decades because that's where the votes are. If younger people would vote in larger numbers, this might begin to change, but it isn't going to be anything radical.  Can you imaging the attack ads?

I can't remember which podcast I was listening to recently (Freakonomics or Planet Money probably) but they were interviewing some big name academic econ Nobel laureate type who said it was as certain as anything in this life that we would get our SS benefits.

ixtap

  • Bristles
  • ***
  • Posts: 427
Re: [Over 40] For US folks, how does Social Security play into your plans?
« Reply #3 on: October 10, 2017, 12:37:51 PM »
Personally I see it as a bonus.  I'm not counting on it, but it will be nice to have it.  My stash is my retirement plan, nothing else is certain or can be as reliable as my stash.

Same end result, but I figure if SS isn't there, my stash probably isn't either and working 20 more years wouldn't have helped.

patchyfacialhair

  • Bristles
  • ***
  • Posts: 478
    • Journal
Re: [Over 40] For US folks, how does Social Security play into your plans?
« Reply #4 on: October 10, 2017, 12:40:31 PM »
I plan to retire once our annual expenses (including taxes and healthcare) are 4% of stash. Social security will then become fun/travel/charity money.

If i'm not retired by the time I'm eligible to get social security, then I'll include it in my plan at that time, because at least I'll know I'm already there, and usually changes to the system greatly impact the younger generation.

I'm at least 30 years away from all that though so who knows what all this will look like.

jim555

  • Handlebar Stache
  • *****
  • Posts: 1297
Re: [Over 40] For US folks, how does Social Security play into your plans?
« Reply #5 on: October 10, 2017, 01:25:46 PM »
Take it at 70 as longevity insurance.  Barring some health issue or change in the political winds, in that case I would take it sooner.

MrThatsDifferent

  • Stubble
  • **
  • Posts: 166
Re: [Over 40] For US folks, how does Social Security play into your plans?
« Reply #6 on: October 10, 2017, 01:28:32 PM »
Itís a complete non-factor for me.  If I have to depend on SS, I think Iíve done something wrong with all that Iíve learned from MMM.

dresden

  • 5 O'Clock Shadow
  • *
  • Posts: 16
Re: [Over 40] For US folks, how does Social Security play into your plans?
« Reply #7 on: October 10, 2017, 01:39:24 PM »
I see social security as partially covering inflation on my 2 pensions since neither is adjusted for inflation.

I get pension one at 60 pension 2 at 62 and then social security when the time seems right but 70 if we are in good health.

Dave1442397

  • Pencil Stache
  • ****
  • Posts: 537
  • Location: NJ
Re: [Over 40] For US folks, how does Social Security play into your plans?
« Reply #8 on: October 10, 2017, 02:10:57 PM »
I would like to be in the situation a friend found himself in a few years ago. He said the SS administration people called him to see if he wanted to file for SS, and they asked him how much he made per month.

He gave them the figure, and the lady said "No, that sounds like your yearly income. What's you monthly income?" Again, he said the figure, and added "Yes, I make at least that much every month." SS Lady "I'm sorry, but your income is too high to qualify for Social Security."  "that's ok", he said, "give it to someone who needs it."


jlcnuke

  • Stubble
  • **
  • Posts: 179
Re: [Over 40] For US folks, how does Social Security play into your plans?
« Reply #9 on: October 10, 2017, 03:07:56 PM »
I used the detailed SS calculator from https://www.ssa.gov/OACT/anypia/anypia.html, using my actual numbers and projected income from now until retirement. I then took 25% off that result to account for potential insolvency issues as well. Then I use the result in my planning.
Delta card referral, 10k extra for both of us (60k total bonus miles for you) http://refer.amex.us/JEFFRC3xlu?xl=cp52

SubmarineNavigator

  • 5 O'Clock Shadow
  • *
  • Posts: 11
  • enjoying life :)
Re: [Over 40] For US folks, how does Social Security play into your plans?
« Reply #10 on: October 10, 2017, 05:04:34 PM »
I have been on a Navy pension for 16 years. I am still 7 years away from my SS pension.

I have looked at it. Why not? The SS sends me an email about it every year.

I have not really thought much about it.

Rhoon

  • Stubble
  • **
  • Posts: 107
  • Age: 2013
  • Location: South East U.S.
Re: [Over 40] For US folks, how does Social Security play into your plans?
« Reply #11 on: October 10, 2017, 05:33:04 PM »
While I hope to beat the trend in my family, most of the men don't live past 70, so it's really just "old lady money" I will probably never see.

moof

  • Bristles
  • ***
  • Posts: 368
  • Location: Beaver Town Orygun
Re: [Over 40] For US folks, how does Social Security play into your plans?
« Reply #12 on: October 10, 2017, 05:54:43 PM »
I'm 40, plan to retire at 47.5.  I only need to cover 23 years of expenses to hit the max 70 year old SS benefits.  It lets me plan on a ~5% SWR instead of a 4%.  After that SS will cover 80% of our planned spending, so I only need ~20% of my portfolio leftover at 70 to maintain lifestyle.

Regarding safety of SS being there for the long haul, old people vote.  Nothing is more sympathetic than an old person forced to live on catfood being trotted onto TV for an election.  Young folks threatened with having to take mom and dad back in will also vote.

Social Security is not getting cut for current workers any time soon.  At some point younger folks will get screwed, and deductions will increase, maybe even the retirement age.  But either party actually cutting SS in any real or perceived way will get voted out of office ASAP, and they know it.

ixtap

  • Bristles
  • ***
  • Posts: 427
Re: [Over 40] For US folks, how does Social Security play into your plans?
« Reply #13 on: October 10, 2017, 06:19:36 PM »
While I hope to beat the trend in my family, most of the men don't live past 70, so it's really just "old lady money" I will probably never see.

My Dad had this attitude at 60. At 73 he is just grumpy that he can't keep up with the young adult grandkids.

Melf

  • Stubble
  • **
  • Posts: 117
  • Location: Raleigh, NC
Re: [Over 40] For US folks, how does Social Security play into your plans?
« Reply #14 on: October 10, 2017, 06:55:11 PM »
I'm 51 and FIRE'ed for almost a year now.  I didn't ever really factor SS into my decisions since I was getting out pretty early.  I guess it will be nice to start drawing it in 15 to 20 years if I'm still around but I hope my stache is at a level at that point that I don't actually need it.

SnackDog

  • Pencil Stache
  • ****
  • Posts: 979
  • Location: Latin America
Re: [Over 40] For US folks, how does Social Security play into your plans?
« Reply #15 on: October 10, 2017, 07:19:25 PM »
It sort of depends on -
1) how long until you plan to start collecting it
2) how much of your speniding it might cover.

If you won't collect for 20 years, forget about it.
If your forecast SS check would be more then 30-40% of your spending  needs then that is starting to get interesting, otherwise who cares? If it covers 50% of your spending and you retire at age 70, you can use a 2% SWR or start with half as much savings and use 4%.
The habit of saving is itself an education; it fosters every virtue, teaches self-denial, cultivates the sense of order, trains to forethought, and so broadens the mind. ĖThomas T. Munger

MrsStubble

  • Stubble
  • **
  • Posts: 163
  • Location: West Chester, PA
Re: [Over 40] For US folks, how does Social Security play into your plans?
« Reply #16 on: October 10, 2017, 07:25:23 PM »
I don't factor it in at all.  If i get any it will be a bonus, but if not, i'm prepared to go without it.
Join Ting and get $25 off a phone or a $25 credit if you bring your own.  Click below:

https://zk3fd144q5b.ting.com/

Fishindude

  • Handlebar Stache
  • *****
  • Posts: 1493
Re: [Over 40] For US folks, how does Social Security play into your plans?
« Reply #17 on: October 10, 2017, 07:38:14 PM »
At 57 Iím pretty sure Iíll get SS and plan on enjoying the extra monthly income.  I donít have the fear of it being eliminated like many do, that would be political suicide for anyone pushing that agenda. 

FI-in-no-time

  • 5 O'Clock Shadow
  • *
  • Posts: 7
  • Location: Midwest
Re: [Over 40] For US folks, how does Social Security play into your plans?
« Reply #18 on: October 10, 2017, 08:07:04 PM »
I don't factor social security into my retirement calculations, but I do think of it as something that can help my DW.  My military pension will fund a large part of our retirement and when I "check out" she gets 55% of that pension so I'm counting on social security to make up the difference.  Hopefully this is something I don't have to worry about for a long time :>)

Laura33

  • Handlebar Stache
  • *****
  • Posts: 1327
  • Location: Mid-Atlantic
Re: [Over 40] For US folks, how does Social Security play into your plans?
« Reply #19 on: October 11, 2017, 07:00:49 AM »
I think for most of the FIRE crew, SS is irrelevant except as longevity insurance; if you're planning to check out of the workforce at 40, then you have to cover at a minimum 22 years before you're even eligible, and you probably want to wait for 30 to max those payments long-term.  Which basically means saving about the same 'stache as you'd need without it (IIRC, the Trinity Study was based on a 30-year retirement period, so you need 25x costs just to get from 40 to 70).

We didn't conceive of FIRE when we started working, but we still based our savings rates on the assumption that we could rely only on what we could control ourselves -- so no SS, no pension, no inheritance, etc.  As we get older, however, it is more likely that we will get something, and so we have begun to factor that in.  Specifically, now that we are over 50, we belong to the category of "people whom politicians don't tend to want to fuck over because we have money and vote," which makes it very likely that we will get something; however, I do still assume it will not be the full present value of the benefits offered.  For planning purposes, I generally assume that all the benefits will be taxed and that it will not keep up with "real" inflation, as those have historically been the most popular ways to trim SS benefits, because they hide the real impacts from the voting public. 

Similarly, DH's company went to a cash-balance pension, and he is vested, so we know we are getting something there as well.  For that, I tend to assume that we will get whatever the current balance is and don't count on continued employment, further contributions, etc.

But I still probably wouldn't FIRE if we needed SS/pension to meet our base level of expenses.  I tend to plan in "buckets," so what I mean by that is that I am still not planning to run my "RE to 70" bucket down to zero based on the assumption that the pension and SS will then kick in and cover everything.
Laugh while you can, monkey-boy

Livingthedream55

  • Bristles
  • ***
  • Posts: 250
Re: [Over 40] For US folks, how does Social Security play into your plans?
« Reply #20 on: October 11, 2017, 07:06:21 AM »
I will FIRE at 59 1/2 so not really terribly early. I plan to take Social Security at age 62 for added fun money (mostly travel). 



Dragonswan

  • 5 O'Clock Shadow
  • *
  • Posts: 48
  • Location: Between realms
Re: [Over 40] For US folks, how does Social Security play into your plans?
« Reply #21 on: October 11, 2017, 09:44:21 AM »
I plan to retire at 60 and collect SS at 62.  SS will cover 40% of my necessary expenses and my pension will cover the other 60%. My retirement savings will cover travel, luxuries, maintenance, and catastrophic events.

DireWolf

  • 5 O'Clock Shadow
  • *
  • Posts: 4
Re: [Over 40] For US folks, how does Social Security play into your plans?
« Reply #22 on: October 11, 2017, 09:57:19 AM »
I'm ~50 now with FIRE 2-3 years out. Definitely planning on SS being at least in the ballpark of what is currently projected. If benefit is reduced somewhat, it is just one more thing that my buffer is there for. When I run FireCalc and the like, I buffer projected spending needs, and then I also am going for 100% success rates. If SS isn't there at all, things are probably FUBAR to the point a bigger stash and more years of work might not help.

SS @ 62 would cover about 40-45% of spending and most of my necessities and if I could wait till 70, we could probably get by on just SS and still have a pretty nice lifestyle. I've got enough now to cover my SWR to bridge the gap between SS and my projected spending, even if my stash just kept up with inflation. Next few years are just about trying to build enough to cover 10 years or so between now and then. That gap includes my DW working some of those years. I'm more worried about health care cost, health insurance, and health in general, than the fate of SS.

DeskJockey2028

  • Bristles
  • ***
  • Posts: 416
  • Age: 45
  • Aiming for 2028
Re: [Over 40] For US folks, how does Social Security play into your plans?
« Reply #23 on: October 11, 2017, 12:43:43 PM »
I'm in a somewhat similar boat myself. still a little over 10 years from my expected FIRE date but I'll be just shy of 56 when I do get out. SS at age 62 would cover about 43% of my expected yearly spending. If I hold out to 67, it would cover about 55%. I don't plan on holding out though because the extra 5 years of SS income will allow me to withdraw a lot less from my stash - and the theoretical rate at which my stash should grow is (I believe) greater than the difference I'd be getting back from holding off on SS payments.

I'm ~50 now with FIRE 2-3 years out. Definitely planning on SS being at least in the ballpark of what is currently projected. If benefit is reduced somewhat, it is just one more thing that my buffer is there for. When I run FireCalc and the like, I buffer projected spending needs, and then I also am going for 100% success rates. If SS isn't there at all, things are probably FUBAR to the point a bigger stash and more years of work might not help.

SS @ 62 would cover about 40-45% of spending and most of my necessities and if I could wait till 70, we could probably get by on just SS and still have a pretty nice lifestyle. I've got enough now to cover my SWR to bridge the gap between SS and my projected spending, even if my stash just kept up with inflation. Next few years are just about trying to build enough to cover 10 years or so between now and then. That gap includes my DW working some of those years. I'm more worried about health care cost, health insurance, and health in general, than the fate of SS.

coppertop

  • Bristles
  • ***
  • Posts: 282
Re: [Over 40] For US folks, how does Social Security play into your plans?
« Reply #24 on: October 11, 2017, 12:54:48 PM »
I am 62 and will be retiring just before Christmas this year.  I have definitely calculated SS into my plans.  My check will cover about half of my living expenses, thus reducing the amount I have to withdraw from my savings.  I have people saying to me, "How will you afford to live?"  My response is that we live a frugal life, I have saved my pennies, and we will be just fine, although we are not retiring rich. 

IWannaGo

  • 5 O'Clock Shadow
  • *
  • Posts: 28
Re: [Over 40] For US folks, how does Social Security play into your plans?
« Reply #25 on: October 11, 2017, 06:27:23 PM »
Over 40....and I don't plan on it when calculating overall retirement planning/income/etc.  I don't think the system will be fully broke by the time I would typically collect but very possible it could change.  I genuinely see it as a bonus or perk if it does come my way.

BTDretire

  • Handlebar Stache
  • *****
  • Posts: 1417
Re: [Over 40] For US folks, how does Social Security play into your plans?
« Reply #26 on: October 11, 2017, 06:40:57 PM »
While I hope to beat the trend in my family, most of the men don't live past 70, so it's really just "old lady money" I will probably never see.

  Twenty five years ago I worked with a guy that was going to pull the money out of a tax advantaged account (401k?) he had. I tried to talk him out of it, he said it doesn't matter the men in my family don't live past 60 yrs old anyway, and then rattled off a list of his relatives that died early.
 Well, he started collecting SS at 62yrs old, today he's 65 and working part time to make ends meet.
So you never know!
« Last Edit: October 11, 2017, 06:51:08 PM by BTDretire »

BTDretire

  • Handlebar Stache
  • *****
  • Posts: 1417
Re: [Over 40] For US folks, how does Social Security play into your plans?
« Reply #27 on: October 11, 2017, 06:46:57 PM »
I'm 40, plan to retire at 47.5.  I only need to cover 23 years of expenses to hit the max 70 year old SS benefits.  It lets me plan on a ~5% SWR instead of a 4%.  After that SS will cover 80% of our planned spending, so I only need ~20% of my portfolio leftover at 70 to maintain lifestyle.

Regarding safety of SS being there for the long haul, old people vote.  Nothing is more sympathetic than an old person forced to live on cat food being trotted onto TV for an election.  Young folks threatened with having to take mom and dad back in will also vote.

Social Security is not getting cut for current workers any time soon.  At some point younger folks will get screwed, and deductions will increase, maybe even the retirement age.  But either party actually cutting SS in any real or perceived way will get voted out of office ASAP, and they know it.

 Don't rule out means testing, for the rich the savers that have a Million dollars worth of investments!

BTDretire

  • Handlebar Stache
  • *****
  • Posts: 1417
Re: [Over 40] For US folks, how does Social Security play into your plans?
« Reply #28 on: October 11, 2017, 06:58:20 PM »
I'm 62 now, my wife is 58, she wants to work 4 to 5 more years, I work as little as possible.
I'm looking at SS, but I don't know when, probably not at least until my wife quits working.
 We are well equiped for retirement, so SS will either leave a bigger stache for the kids or by
used to pay for health insurance. Either way, it's nice to have it.
  Although we were savers from our first year of marriage, so would have a much bigger stache if not for SS taxes. We paid both halves for about 27 years.

SwordGuy

  • Magnum Stache
  • ******
  • Posts: 3286
  • Location: Fayetteville, NC
    • Flipping Fayetteville
Re: [Over 40] For US folks, how does Social Security play into your plans?
« Reply #29 on: October 11, 2017, 08:14:40 PM »
We are counting on social security for one of us.  My wife is 10 years older and already on SS, so we know how much she's getting.  We're assuming it will (more or less) keep pace with inflation.

I'm not budgeting for social security for both of us.  That's because the bulk of our expenses will be relatively fixed and stay the same whether there is one or two of us.   If one of us dies, one of those social security checks will simply disappear.  If we were counting on both of them to get by, the survivor would be hitting lean times.

So, if we both live long lives, we'll have a SS bonus check.  If not, it won't matter.

merlin7676

  • Stubble
  • **
  • Posts: 133
Re: [Over 40] For US folks, how does Social Security play into your plans?
« Reply #30 on: October 12, 2017, 08:17:22 AM »
I'm 41 and my DH is 46.  We are planning to retire together in 14 years when I'm 55 and DH is 60.
Don't currently figure it into either net worth or retirement planning.
When we get there, we'll decide whos to draw from first if and when we need it.
Most likely scenario is draw from one at 62 and keep the other growing.
Based on our current projections, we won't ever need it so it will just be extra to save and spend on stuff like medical care and big projects like replace roof or something.

DoubleDown

  • Handlebar Stache
  • *****
  • Posts: 1974
Re: [Over 40] For US folks, how does Social Security play into your plans?
« Reply #31 on: October 13, 2017, 01:26:03 PM »
Yes, it factored heavily into my planning (age 50). In today's dollars, I could take about $21,000 annually at age 62, or $29,000 at age 67. That's a significant amount of earnings that I have included in my plans; it would be silly to discount it. I retired at 47 knowing I could spend down my taxable accounts and live off 401k/IRAs, Social Security, and a pension in old age.

For what it's worth, I'll probably start taking it at 62 so that I can pass more of my own money on to my heirs.
"Not all quotes on the internet are accurate" -- Abraham Lincoln

Clean Shaven

  • Pencil Stache
  • ****
  • Posts: 582
  • Location: Wild Wild West
Re: [Over 40] For US folks, how does Social Security play into your plans?
« Reply #32 on: October 13, 2017, 01:48:15 PM »
I'm 45, Mrs. CS is 53.  We're factoring in SS based on the SS website's calculator, projecting taking SS at age 70, and reducing the estimated amount by 25%.   We're using a reduced % based on a guess that the benefits may be reduced sometime between now and age 70 (or 62, or 67).

ender

  • Magnum Stache
  • ******
  • Posts: 3893
Re: [Over 40] For US folks, how does Social Security play into your plans?
« Reply #33 on: October 13, 2017, 03:04:28 PM »
It's worth realizing the only meaningful change to SS would be the addition of means testing.

IF the program is changed to cut enough benefits to matter to your FIRE plans, there will be many, many people who have not saved and are completely screwed. Keep that in mind when determining "will SS exist still?" questions.

From my perspective this makes means testing the only remotely feasible problem for it not being around. Solvency can be fixed by increasing the FICA rates.

BlueHouse

  • Magnum Stache
  • ******
  • Posts: 2519
  • Location: WDC
Re: [Over 40] For US folks, how does Social Security play into your plans?
« Reply #34 on: October 16, 2017, 12:47:27 PM »
I'm counting on it.  I'll be pissed if means testing comes into play.  I do not live a very mustachian lifestyle and don't intend to change when I retire.  I want that SS money for travel and adventure. 
I expect to retire in the manner in which I've become accustomed (or even better) because I haven't traveled as much as I would have liked. 
Sometimes nothing can be a real cool hand

dude

  • Handlebar Stache
  • *****
  • Posts: 1807
Re: [Over 40] For US folks, how does Social Security play into your plans?
« Reply #35 on: October 16, 2017, 12:48:56 PM »
Yeah, I'm counting on it, though it will be more or less gravy/safety net. But the fact that I can consider it that means I've got significant non-SS resources to draw on, so I worry they will means-test me right out of collecting it some day. Which is fucking criminal. The extent to which our elected representatives will go to further enrich the very richest among us at the expense of the rest of us is truly mind-boggling.