FireCalc: account for Social Security? Spending includes taxes?

[rolliefingers]

Simple questions for FIRE Calc users -- I am 42 & I am unsure whether to put any amount into Social Security given the possibility it will not exist.  If you put anything in there, then what do you use?  The government SS estimator is a complete over-simplified joke.

Are taxes baked into the spend # used on the first page?  I imagine they are.

Bonus question:  anyone using ACA Insurance . . . please let me know how much that is costing you.  In order to get a subsidy it appears you need to be under $60K in reported income a year.

Thanks

[boarder42]

i would say dont put in SS ... if it hits its a nice bonus. but i'm alot younger 28.  your annual spend needs to include any tax liability you will incure.  If not you're going to deplete your account faster b/c you'll have to pay taxes you had not estimated for.  Taxes are an expense.

[Dr. Doom]

It's unlikely that it won't exist.

From "engineering your retirement" by electrical engineer and early retiree Mike Golio

"Unless changes are made, a young worker today could be faced with up to a
26% reduction in benefits in the year 2041. Payments could continue at this
reduced level or decrease every year thereafter. Some analysis results in estimates
of overall benefit reduction from the current formula by as much as
32% by 2079."

If you're older than 55, you can expect current payouts.

BTW, 32% reduction by 2079 is not bad.  Based on this, when I calculate SS benefits, I pencil in 60% of current projections as an absolute worst-case scenario.  Golio is a detail oriented guy and did his homework.  Should apply even for 28 year-olds.

Re: Health care, read these two threads:
http://forum.mrmoneymustache.com/post-fire/aca-asking-for-proof-of-income/
http://forum.mrmoneymustache.com/post-fire/health-insurance-in-er-what-are-y'all-doing/

And use this subsidy calculator.
http://kff.org/interactive/subsidy-calculator/

re: taxes, yes, you include this as part of your spend rate.

[nereo]

... whether to put any amount into Social Security given the possibility it will not exist. 

I'm absolutely floored by how common this belief is.  If we do absolutely nothing, ss taxes are projected to pay out 70% of guaranteed benefits over the next seventy years.  That's a far cry from it not exiting.  Like Dr. Doom said, a 32% reduction by 2079 is not [that] bad.

I'll add that if you are planning on ER well before your 50th birthday the question of SS may be irrelevant.  If you are planning on having a 'stach long enough to last through ~20 years without any SS (age 47-67), it will be only slightly smaller than a stach designed to last 50+ years, with the last 30 including SS.

[MDM]

The government SS estimator is a complete over-simplified joke.

Have you tried http://www.ssa.gov/OACT/anypia/anypia.html?

[Eric]

The government SS estimator is a complete over-simplified joke.

Have you tried http://www.ssa.gov/OACT/anypia/anypia.html?

Oooh!  Thanks!  I hadn't seen that before.

[boarder42]

While it will probably exist i'm not putting it into my FIRE plans.  why build it in?  There are so many other unknowns with how the market will perform the first few years of retirement. may as well save up enough that you can use it for charitable giving if you want .. the effect is has is small b/c my savings goals are high we are shooting for ~3x what MMM has so if you have a high spending goal then you may not really see much of its benefit anyway.  i think when i calced it at current rates it gave me less than one year of working back.

[Sid Hoffman]

Bonus question:  anyone using ACA Insurance . . . please let me know how much that is costing you.  In order to get a subsidy it appears you need to be under $60K in reported income a year.

To get an ACA subsidy, you need to be working a regular paid job, but have the income fall within a certain range.  If you make too little, you won't qualify for the subsidy (although you might qualify for Medicare in some states) and as you know, if you make too much you don't qualify for a subsidy either.  If you want the raw cost, you can always estimate it yourself by just going to healthcare.gov or ehealthinsurance.com.  The main factors are age, family size, and ZIP code.

One thing I'm looking at is paying my early retirement healthcare premium from HSA savings.  I just switched over to a HDHP this year and so long as my son is still on my insurance plan, I get to contribute at the family rate.  By my math, I should have enough in my HSA by the time I retire that my HSA alone can fully pay for my insurance premiums.  That's another exception, too: you can only use an HSA to pay your health insurance premiums if you're truly unemployed.  If you're still doing part-time work, you must pay your premiums out of pocket, not from the HSA.