### Author Topic: How do you factor social security into your withdrawal stategy  (Read 7620 times)

#### NaturallyHappier

• Stubble
• Posts: 129
• Age: 53
• FIRED 3/10/2017
##### How do you factor social security into your withdrawal stategy
« on: December 23, 2017, 03:08:29 PM »
I am wondering how others factor future SS into their withdrawal strategy.  I am 50 years old and FIRE.  I will collects SS at 70.  I want to factor the SS into my earlier withdrawals since I will need to withdraw less from the stash once I start collecting SS.  So, lets say I want to live off a fixed 4% of the actual stash amount with annual inflation adjustments.  The actual % I can withdraw in the pre-SS years is something more than 4% since I am going to be withdrawing something significantly less than 4% once I am collecting SS.

My approach so far has been to take the annual SS amount (adjusted for early retirement) and simply multiply it by a conservative 15 years ( collect at 70 and conservatively say I pass away at 85).  I am not discounting the SS annual amount because the dollars from the SS administration are already in today's dollars.  This gets the SS in a lump sum value in today's dollars.  Then I divide it by the more optimistic 100 year lifetime less my current 50 years.  For example.

SS Annual Income = 50K
SS Annuity in today's dollars = 50K * 15 Yrs = 750K
Remaining optimistic life = 100 Yrs - 50 Yrs Age = 50 Yrs
Amount above 4% I can spend because of SS = 750K / 50 Yrs = 15K

So if my stash is \$1M and my expenses are \$55K I can withdraw 4% of the stash plus \$15K to get to my \$55K withdraw.

I considered just adding the SS Annuity above to the stash and then just taking 4% of that amount, but that assumes the SS Annuity grows with the stash.  That is not correct since SS grows with inflation (CPI-U) only.

I am wondering how others are doing this?  My approach is super conservative, but I am wondering if others that are smarter than I have a better approach.

As a side note, I am actually 51, I just wanted to make the numbers easy.  Also, I am planning to use the EM withdrawal strategy from from the book "Living Off Your Money" by M. McClung, instead of the 4% with annual inflation adjustments presented above.  Again I am simplifying in the example above.

#### ysette9

• Magnum Stache
• Posts: 3641
• Location: Bay Area, CA
##### Re: How do you factor social security into your withdrawal stategy
« Reply #1 on: December 23, 2017, 06:05:14 PM »
I am a long way out from SS but I run an estimate on their website, and then input that as an additional income line item into cFIREsim.

#### NaturallyHappier

• Stubble
• Posts: 129
• Age: 53
• FIRED 3/10/2017
##### Re: How do you factor social security into your withdrawal stategy
« Reply #2 on: December 23, 2017, 06:23:10 PM »
ysette9,

Thanks for the reply.  Good suggestion.  I have done that in the past, but I am trying now to figure out how to handle it when figuring out how much I can withdraw during the draw down phase now that I am already FIRE.  I also have a spreadsheet that projects SS out into the future and while that helped me figure out whether I could FIRE and gives me a good feel as to how much more I can withdraw, but it does not help me much in actually putting together a withdrawal strategy spreadsheet.

I need to project future SS back to today to figure out how much I can safely withdraw now knowing that SS will be available later.

• Magnum Stache
• Posts: 4656
##### Re: How do you factor social security into your withdrawal stategy
« Reply #3 on: December 23, 2017, 06:39:55 PM »
I would be cautious with imputing Social Security payments at your age.  You will not be eligible to collect until 2029, and that's only if the minimum age to collect is not raised.  The trust fund will be exhausted around 2034, and if nothing is done, your annuity will be cut by around 25 percent.  I would project five years at your estimated payment at 62 and 75 percent of the inflation adjusted amount beginning in 2034.

#### Monkey Uncle

• Handlebar Stache
• Posts: 1406
• Location: West-by-god-Virginia
##### Re: How do you factor social security into your withdrawal stategy
« Reply #4 on: December 24, 2017, 05:18:15 AM »
This is a bit tangential to the question you asked, but I suggest comparing various SS start ages in cFiresim.  You may find that it is better to start collecting earlier as opposed to waiting until you're 70.  When I ran my numbers, I actually got the best maximum safe spend by starting both my and DW's SS payments at 62.  This is because starting early reduces the amount we have to pull from the stash early on, which reduces sequence of return risk.

Also, if Congress changes benefit amounts to address the funding shortfall, I believe they will be less likely to cut my benefits if I am already drawing them.  Sort of a "get it while you can" situation.

#### NaturallyHappier

• Stubble
• Posts: 129
• Age: 53
• FIRED 3/10/2017
##### Re: How do you factor social security into your withdrawal stategy
« Reply #5 on: December 24, 2017, 05:49:16 AM »
This is a bit tangential to the question you asked, but I suggest comparing various SS start ages in cFiresim.  You may find that it is better to start collecting earlier as opposed to waiting until you're 70.  When I ran my numbers, I actually got the best maximum safe spend by starting both my and DW's SS payments at 62.  This is because starting early reduces the amount we have to pull from the stash early on, which reduces sequence of return risk.

Also, if Congress changes benefit amounts to address the funding shortfall, I believe they will be less likely to cut my benefits if I am already drawing them.  Sort of a "get it while you can" situation.

Interesting, so back testing proved that it may actually be better to start early.  I have modeled this in spreadsheets using a relatively low return rate and found it was slightly better to wait.  So you are saying that using real historic returns then proves the opposite.

#### rab-bit

• Stubble
• Posts: 114
##### Re: How do you factor social security into your withdrawal stategy
« Reply #6 on: December 24, 2017, 05:51:48 AM »
+1 for @Monkey Uncle comment, I have found the same thing. If you have plenty of income in the later years, it can be helpful to pull as much of that as possible to the earlier years.

Regarding your original question, I have done it a little differently. I have a spreadsheet that figures out the WR each year based on the income that I need minus any other income sources. So for example, in the first few years, we have only rental property income so I find that my required WR is around 7%. When my SS benefits start at 62, it drops to around 5%, and eventually to 3% after my wife's SS and some pensions begin. Since this final WR is below the 4% SWR, I know we should be okay.
« Last Edit: December 24, 2017, 06:48:21 AM by rab »

#### freya

• Stubble
• Posts: 202
##### Re: How do you factor social security into your withdrawal stategy
« Reply #7 on: December 24, 2017, 06:35:13 AM »
I'm a little older than the OP (54), and have been wrestling with the same issue.  I did it in a maybe hokey way but it works for me:

I calculated annual expenses as same as current (in today's dollars) plus extra to cover costs of medical insurance and copays/deductible, in two phases:  prior to age 70, and after age 70.  At age 70, expenses are reduced by the Social Security benefit.  I used my actual benefit minus 20% to cover potential cuts, and further assumed that the entire benefit is subject to tax.   All numbers in today's dollars, with assumption that current expenses, savings and SS will track inflation.

I then calculated the savings required for age 70 expenses at a 4% SWR.  This is less than my current savings, so I then assume I can spend down the excess.  The amount of this spend-down (divide by #years until age 70) gets added to the 4% SWR from the post-age 70 savings pot.

Reaching FI happens when the income from the age-70 savings pot plus annual spend-down exceeds annual expenses.  This is a much lower number than a straight calculation of savings = expenses * 25 yields, and accordingly speeds up the FI timetable.

Definitely interested to see how other people handle this.  I prefer my own spreadsheets to depending entirely on FIREcalc, although this tool is much appreciated.

#### Blackeagle

• Stubble
• Posts: 121
• Location: Wichita, KS
##### Re: How do you factor social security into your withdrawal stategy
« Reply #8 on: December 24, 2017, 07:34:18 AM »
I have not been factoring social security into my FIRE calculations at all.  There will probably be a 20 year gap between when I retire and when I claim social security.  With that big a gap the difference between a stache I can live on indefinitely, and a stache that I can live on until I start supplementing it with social security is pretty small.  Easier to just aim for the slightly larger starting stache and think of social security as gravy.

#### NaturallyHappier

• Stubble
• Posts: 129
• Age: 53
• FIRED 3/10/2017
##### Re: How do you factor social security into your withdrawal stategy
« Reply #9 on: December 24, 2017, 07:57:16 AM »
I'm a little older than the OP (54), and have been wrestling with the same issue.  I did it in a maybe hokey way but it works for me:

I calculated annual expenses as same as current (in today's dollars) plus extra to cover costs of medical insurance and copays/deductible, in two phases:  prior to age 70, and after age 70.  At age 70, expenses are reduced by the Social Security benefit.  I used my actual benefit minus 20% to cover potential cuts, and further assumed that the entire benefit is subject to tax.   All numbers in today's dollars, with assumption that current expenses, savings and SS will track inflation.

I then calculated the savings required for age 70 expenses at a 4% SWR.  This is less than my current savings, so I then assume I can spend down the excess.  The amount of this spend-down (divide by #years until age 70) gets added to the 4% SWR from the post-age 70 savings pot.

Reaching FI happens when the income from the age-70 savings pot plus annual spend-down exceeds annual expenses.  This is a much lower number than a straight calculation of savings = expenses * 25 yields, and accordingly speeds up the FI timetable.

Definitely interested to see how other people handle this.  I prefer my own spreadsheets to depending entirely on FIREcalc, although this tool is much appreciated.

I am not understanding how you are doing it.  Let me try to summarize to see if I even have it half right.

You divide your remaining years into pre SS and post SS.

For post SS, you figure what you will need to live on each year and subtract out 80% of SS and Taxes on 80% of SS.  Then you take what is left and figure you need 25 times that amount in your stash for that period of your life.  That amount covers post retirement.

After that I am lost.

#### Monkey Uncle

• Handlebar Stache
• Posts: 1406
• Location: West-by-god-Virginia
##### Re: How do you factor social security into your withdrawal stategy
« Reply #10 on: December 24, 2017, 09:08:27 AM »
This is a bit tangential to the question you asked, but I suggest comparing various SS start ages in cFiresim.  You may find that it is better to start collecting earlier as opposed to waiting until you're 70.  When I ran my numbers, I actually got the best maximum safe spend by starting both my and DW's SS payments at 62.  This is because starting early reduces the amount we have to pull from the stash early on, which reduces sequence of return risk.

Also, if Congress changes benefit amounts to address the funding shortfall, I believe they will be less likely to cut my benefits if I am already drawing them.  Sort of a "get it while you can" situation.

Interesting, so back testing proved that it may actually be better to start early.  I have modeled this in spreadsheets using a relatively low return rate and found it was slightly better to wait.  So you are saying that using real historic returns then proves the opposite.

I think it probably depends on your personal circumstances, so I would encourage you to run the numbers for yourself.  The older you are when you FIRE, the closer you are to drawing SS during the early years of retirement.  I think this has a bigger impact on sequence of return risk than for someone who FIREs in their 30s and then has 30 years of retirement to get through before they can start drawing.

Also I should emphasize that my metric of interest is maximum safe annual spending amount, not total return or average ending stash size.  IIRC, my runs that began SS at 62 showed a higher max spend, but a lower average ending stash size.
« Last Edit: December 24, 2017, 09:15:09 AM by Monkey Uncle »

#### NaturallyHappier

• Stubble
• Posts: 129
• Age: 53
• FIRED 3/10/2017
##### Re: How do you factor social security into your withdrawal stategy
« Reply #11 on: December 24, 2017, 09:56:58 AM »
This is a bit tangential to the question you asked, but I suggest comparing various SS start ages in cFiresim.  You may find that it is better to start collecting earlier as opposed to waiting until you're 70.  When I ran my numbers, I actually got the best maximum safe spend by starting both my and DW's SS payments at 62.  This is because starting early reduces the amount we have to pull from the stash early on, which reduces sequence of return risk.

Also, if Congress changes benefit amounts to address the funding shortfall, I believe they will be less likely to cut my benefits if I am already drawing them.  Sort of a "get it while you can" situation.

Interesting, so back testing proved that it may actually be better to start early.  I have modeled this in spreadsheets using a relatively low return rate and found it was slightly better to wait.  So you are saying that using real historic returns then proves the opposite.

I think it probably depends on your personal circumstances, so I would encourage you to run the numbers for yourself.  The older you are when you FIRE, the closer you are to drawing SS during the early years of retirement.  I think this has a bigger impact on sequence of return risk than for someone who FIREs in their 30s and then has 30 years of retirement to get through before they can start drawing.

Also I should emphasize that my metric of interest is maximum safe annual spending amount, not total return or average ending stash size.  IIRC, my runs that began SS at 62 showed a higher max spend, but a lower average ending stash size.

If you are interested in maximizing withdrawal rates, then I would recommend reading "Living Off Your Money" by M. McClung if you have not already.  It is an expensive book @\$35.00, but worth every penny in my opinion.  He goes through many different withdrawal methods and back tests them thoroughly against historical data to see how they hold up and he recommends the EM or ECM methods.  He gives the reader the results of his back testing to show why he recommends them.  He even comes up with a new method himself that looks very promising, but he eventually throws it out because of the possibility of outliving your stash in a couple bad years.    He also has a free spreadsheet that implements his withdrawal method and his harvesting method @ https://gumroad.com/l/OfsGt/free.

#### freya

• Stubble
• Posts: 202
##### Re: How do you factor social security into your withdrawal stategy
« Reply #12 on: December 24, 2017, 01:34:10 PM »
I'm a little older than the OP (54), and have been wrestling with the same issue.  I did it in a maybe hokey way but it works for me:

I calculated annual expenses as same as current (in today's dollars) plus extra to cover costs of medical insurance and copays/deductible, in two phases:  prior to age 70, and after age 70.  At age 70, expenses are reduced by the Social Security benefit.  I used my actual benefit minus 20% to cover potential cuts, and further assumed that the entire benefit is subject to tax.   All numbers in today's dollars, with assumption that current expenses, savings and SS will track inflation.

I then calculated the savings required for age 70 expenses at a 4% SWR.  This is less than my current savings, so I then assume I can spend down the excess.  The amount of this spend-down (divide by #years until age 70) gets added to the 4% SWR from the post-age 70 savings pot.

Reaching FI happens when the income from the age-70 savings pot plus annual spend-down exceeds annual expenses.  This is a much lower number than a straight calculation of savings = expenses * 25 yields, and accordingly speeds up the FI timetable.

Definitely interested to see how other people handle this.  I prefer my own spreadsheets to depending entirely on FIREcalc, although this tool is much appreciated.

I am not understanding how you are doing it.  Let me try to summarize to see if I even have it half right.

You divide your remaining years into pre SS and post SS.

For post SS, you figure what you will need to live on each year and subtract out 80% of SS and Taxes on 80% of SS.  Then you take what is left and figure you need 25 times that amount in your stash for that period of your life.  That amount covers post retirement.

After that I am lost.

OK let me see if I can explain it better.

Prior to age 70, my expenses are assumed to be what they are today plus some extra for things like medical insurance that are covered by employment benefits now.  I assume no other sources of income, so the stash has to provide all living expenses.

After age 70, my expenses are the same, but I now have a new source of income (SS).  My stash now needs to supply only the portion of expenses not covered by SS.

The minimum stash amount thus has two components:  one for after 70 which has to survive indefinitely, and one for before age 70 which can be spent down.  It's sort of what the OP did, I just took a different approach and don't need to make any longevity assumptions.

BTW totally agree that I would not consider SS if retiring before, say, age 45.  It's too long a time horizon for this to make any difference.

Also, as far as sequence of returns risk, I'm not terribly concerned about that as my long term savings is in the Permanent Portfolio.  A 4% SWR in that portfolio is far safer than it is for a typical stock/bond portfolio.  The bit of CAGR you give up for that protection is worth it to me.

#### Monkey Uncle

• Handlebar Stache
• Posts: 1406
• Location: West-by-god-Virginia
##### Re: How do you factor social security into your withdrawal stategy
« Reply #13 on: December 24, 2017, 02:17:03 PM »
This is a bit tangential to the question you asked, but I suggest comparing various SS start ages in cFiresim.  You may find that it is better to start collecting earlier as opposed to waiting until you're 70.  When I ran my numbers, I actually got the best maximum safe spend by starting both my and DW's SS payments at 62.  This is because starting early reduces the amount we have to pull from the stash early on, which reduces sequence of return risk.

Also, if Congress changes benefit amounts to address the funding shortfall, I believe they will be less likely to cut my benefits if I am already drawing them.  Sort of a "get it while you can" situation.

Interesting, so back testing proved that it may actually be better to start early.  I have modeled this in spreadsheets using a relatively low return rate and found it was slightly better to wait.  So you are saying that using real historic returns then proves the opposite.

I think it probably depends on your personal circumstances, so I would encourage you to run the numbers for yourself.  The older you are when you FIRE, the closer you are to drawing SS during the early years of retirement.  I think this has a bigger impact on sequence of return risk than for someone who FIREs in their 30s and then has 30 years of retirement to get through before they can start drawing.

Also I should emphasize that my metric of interest is maximum safe annual spending amount, not total return or average ending stash size.  IIRC, my runs that began SS at 62 showed a higher max spend, but a lower average ending stash size.

If you are interested in maximizing withdrawal rates, then I would recommend reading "Living Off Your Money" by M. McClung if you have not already.  It is an expensive book @\$35.00, but worth every penny in my opinion.  He goes through many different withdrawal methods and back tests them thoroughly against historical data to see how they hold up and he recommends the EM or ECM methods.  He gives the reader the results of his back testing to show why he recommends them.  He even comes up with a new method himself that looks very promising, but he eventually throws it out because of the possibility of outliving your stash in a couple bad years.    He also has a free spreadsheet that implements his withdrawal method and his harvesting method @ https://gumroad.com/l/OfsGt/free.

Thanks for the tip.  I'll have to check it out.

#### Mr. Green

• Handlebar Stache
• Posts: 1790
• Age: 35
• Location: Wilmington, NC
##### Re: How do you factor social security into your withdrawal stategy
« Reply #14 on: December 25, 2017, 07:15:59 AM »
SS will be the gravy on top of our other income. We intend to use it to boost our spending in our 60s and 70s while we're still healthy enough for long distance travel, then cover any potential increase in medical expenses as our health declines.

#### secondcor521

• Handlebar Stache
• Posts: 1808
• Age: 49
• Location: Boise, Idaho
• Big cattle, no hat.
##### Re: How do you factor social security into your withdrawal stategy
« Reply #15 on: December 25, 2017, 11:45:30 AM »
Just to throw another method out there, here's how I do it at age 48 and FIREd for about 2 years:

I take my age 67 (FRA for me) benefit from the SS website.  I then project this forward monthly at my chosen inflation rate (3%) out to age 83.  I then take 40% of that number as a conservative amount I choose to plan on given the funding issues everyone knows about.  I then only consider the amounts from age 67 to age 83.  (Why 83?  I don't remember exactly, but I think that is a reasonable estimate of my 50th percentile life expectancy.)

I then take the NPV of the sum of those payments, using that same 3% as the discount rate and add that sum into my FIRE stash.  I then take 4% of that FIRE stash as the upper limit on what I can spend.

Currently I am spending only about 2.38% of my FIRE stash, so I feel pretty comfortable about things.

When I run cFIREsim, I use my FIRE stash without Social Security and add in my Social Security payments as an additional income stream coming on line when I hit FRA.  I feel that approach is the closest to the way cFIREsim is intended to be used and it also keeps things as simple as possible.  And simplicity helps avoid mistakes in math that could occur and make the results a less reliable projection.

For some perspective, doing it this way is about 25% more conservative than the OP's method with my numbers, and considerably more complicated.  The NPV that I add in for Social Security is only about 12% of my total FIRE stash.

Bottom line in my case, Social Security is a nice addition but isn't that much of a factor in my personal situation.

#### SwordGuy

• Magnum Stache
• Posts: 4613
• Location: Fayetteville, NC
##### Re: How do you factor social security into your withdrawal stategy
« Reply #16 on: December 25, 2017, 12:02:11 PM »
+1 for @Monkey Uncle comment, I have found the same thing. If you have plenty of income in the later years, it can be helpful to pull as much of that as possible to the earlier years.

Regarding your original question, I have done it a little differently. I have a spreadsheet that figures out the WR each year based on the income that I need minus any other income sources. So for example, in the first few years, we have only rental property income so I find that my required WR is around 7%. When my SS benefits start at 62, it drops to around 5%, and eventually to 3% after my wife's SS and some pensions begin. Since this final WR is below the 4% SWR, I know we should be okay.

Sorry to be morbid, but I rarely see this point discussed and it's relevant.

If one of you dies, do the expenses drop enough to keep the final WR below the 4% SWR?   Because if they won't, then the surviving partner will have higher odds of a failure.

#### rab-bit

• Stubble
• Posts: 114
##### Re: How do you factor social security into your withdrawal stategy
« Reply #17 on: December 25, 2017, 12:50:37 PM »
@SwordGuy I agree that this is important and I have thought about it. In our case, when one of us dies we would lose the lower of the two SS benefits. All other income sources would remain unchanged. Increasing the WR from 3% to 4% would offset about half of that, and I'm confident that the rest could be absorbed through lower expenses (one less person so lower food, medical and possibly housing costs).

Of course everyone's situation is different, so YMMV.
« Last Edit: December 25, 2017, 01:04:56 PM by rab »

#### Monkey Uncle

• Handlebar Stache
• Posts: 1406
• Location: West-by-god-Virginia
##### Re: How do you factor social security into your withdrawal stategy
« Reply #18 on: December 25, 2017, 01:13:54 PM »
@SwordGuy I agree that this is important and I have thought about it. In our case, when one of us dies we would lose the lower of the two SS benefits. All other income sources would remain unchanged. Increasing the WR from 3% to 4% would offset about half of that, and I'm confident that the rest could be absorbed through lower expenses (one less person so lower food, medical and possibly housing costs).

Of course everyone's situation is different, so YMMV.

In our case, it is highly likely that the surviving spouse will downsize to a smaller, less expensive house.

#### soccerluvof4

• Magnum Stache
• Posts: 3994
• Location: Artic Midwest
• Retired at 50
##### Re: How do you factor social security into your withdrawal stategy
« Reply #19 on: December 26, 2017, 03:28:29 AM »
SS will be the gravy on top of our other income. We intend to use it to boost our spending in our 60s and 70s while we're still healthy enough for long distance travel, then cover any potential increase in medical expenses as our health declines.

This is how we look at it as well , just in case against all my reasoning it would not be there for us.

#### rab-bit

• Stubble
• Posts: 114
##### Re: How do you factor social security into your withdrawal stategy
« Reply #20 on: December 26, 2017, 04:22:24 AM »
@SwordGuy I agree that this is important and I have thought about it. In our case, when one of us dies we would lose the lower of the two SS benefits. All other income sources would remain unchanged. Increasing the WR from 3% to 4% would offset about half of that, and I'm confident that the rest could be absorbed through lower expenses (one less person so lower food, medical and possibly housing costs).

Of course everyone's situation is different, so YMMV.

In our case, it is highly likely that the surviving spouse will downsize to a smaller, less expensive house.

Another thing to consider is that once SS age is reached, the time that your money needs to last is starting to get shorter than the 30 years built into the 4% rule. Even at age 62, life expectancy is probably 25 years or less, so this should reduce the risk of one spouse running out of money after the other spouse passes and the lower SS benefit is lost.

#### dude

• Handlebar Stache
• Posts: 2289
##### Re: How do you factor social security into your withdrawal stategy
« Reply #21 on: December 26, 2017, 09:39:34 AM »
I plan to wait until 70 (spouse is 7 years younger than me and I'm the higher earner). I've basically calculated that I need a 1.9% draw until 62, then a 4%-5% draw from 62-70*, at which point, I start taking SS (projected to be @\$35k). RMD's come at 70.5, and I'm likely to have way more income than I'll be able to spend, unless (and I fully expect this is coming down the pike) the assholes in charge start means-testing SS. I will confess that I'm contemplating taking SS earlier depending on what the political climate is like in 2027 when I turn 62, because as someone mentioned, the Trust Fund "surplus" runs out in 2034, just 7 years later, right as I'll be approaching 70 years old. So I may claim it earlier in hopes of being grandfathered into whatever 11th hour "solution" Congress comes up with then, or if the numbers suggest that collecting the Age 62 amount outweighs waiting for 75% of the full amount at age 70.

*If my account has survived/avoided a bad sequence of returns hit in the first 10 years, I should have no problem bumping to 5, 6 or even 7%.

#### jim555

• Handlebar Stache
• Posts: 1908
##### Re: How do you factor social security into your withdrawal stategy
« Reply #22 on: December 26, 2017, 10:31:08 AM »
Having a pension (starting from 55-65) and SS (starting from 62-70) means a floor of income that covers the basics.  So I could spend down faster in the front years and less in the back years.  I could even spend to zero to age 70 and just rely on pension/SS from then on.  Solves the problem of leaving money on the table.

• Handlebar Stache
• Posts: 1830
##### How do you factor social security into your withdrawal stategy
« Reply #23 on: January 06, 2018, 07:44:15 AM »
My Hub and I started Social Security (SS) at age 63 and 62 1/2. We both had to go on Obamacare and to receive the subsidy we had to keep income below \$63,000. With our 2 SS checks, one small pension our income level is around \$49,500. We then withdraw from IRA but only take about \$10K. So we have a total income of close to \$60K. If we need more money we withdraw from savings. My point is that our SS checks tally around \$43K a year that we are drawing for 3 and 3 1/2 years before Full Retirement Age (FRA). We will have drawn approx. \$150K from SS and not taken that out of our IRA's. Our break even point is around 78-80 years old. I know financial people advise to not withdraw from SS till your FRA or age 70 but for those who have children and want to be able to give them an inheritance, seems to me using SS money instead of savings is the better way to go. You can will your savings, you cannot will Social Security.

#### BTDretire

• Handlebar Stache
• Posts: 2307
##### Re: How do you factor social security into your withdrawal stategy
« Reply #24 on: January 07, 2018, 07:48:36 AM »
I'm still trying to get a handle on when to start collecting. I have always thought I'd wait until 70 to get the max, I'm 62 now, wife is 58.
However, I'm also looking at RMDs and even with a modest 6% growth rate I'm looking about \$50k of RMDs when we are both doing required RMDs. If we both wait until 70 to retire out SS
income will be about \$48k, plus dividends from non-tax deferred accounts, we will have a sizeable taxable yearly income that we can't get out of. Nice problem to have, but my job is to minimize taxes and maximize the NW while living a comfortable life.
The end result desired is to live well and leave as much to the kids as we can.

#### Lake161

• Stubble
• Posts: 113
• Location: NorCal
##### Re: How do you factor social security into your withdrawal stategy
« Reply #25 on: January 07, 2018, 11:00:39 AM »
For a really deep dive into the math around SS and withdrawal rates: https://earlyretirementnow.com/2017/01/04/the-ultimate-guide-to-safe-withdrawal-rates-part-4-social-security-pensions/

Also on that site, recommendations for how much to discount SS to account for the risk that Congress will shrink your benefits before you get there, based on your current age:
Age 55+: no discount. Political suicide to mess with this cohort
46-54: -10%
40-45: -15%
<40: -20%

#### BTDretire

• Handlebar Stache
• Posts: 2307
##### Re: How do you factor social security into your withdrawal stategy
« Reply #26 on: January 07, 2018, 12:40:19 PM »
For a really deep dive into the math around SS and withdrawal rates: https://earlyretirementnow.com/2017/01/04/the-ultimate-guide-to-safe-withdrawal-rates-part-4-social-security-pensions/

I found this of interest: https://tinyurl.com/y8ymz23
It says (in graph form) retiring at FRA may be better than 70 if you live past 92. I would like to do the calculations, with all the key assumptions listed at the end but I don't find the calculator.
The article was found here in the list of SS articles, near the bottom.
http://www.analyzenow.com/Articles/Social%20Security/Social%20Security.htm

Others can try this, it is basically, what if I stop paying SS taxes now but don't collect for years down the road.

I followed the directions in the last paragraph and I get a number slightly higher than what SS projects with me working until 66 and collecting at 66 vs working until 62 and collecting at 66.
I know that's not correct. Don't see how I could have made a mistake. If other can make it work, then I'll post my data for others to peruse.

#### weirdlair

• Stubble
• Posts: 186
• Location: Midwest
• Impeach the orange idiot
##### Re: How do you factor social security into your withdrawal stategy
« Reply #27 on: January 07, 2018, 12:55:01 PM »
I'm still trying to get a handle on when to start collecting. I have always thought I'd wait until 70 to get the max, I'm 62 now, wife is 58.
However, I'm also looking at RMDs and even with a modest 6% growth rate I'm looking about \$50k of RMDs when we are both doing required RMDs. If we both wait until 70 to retire out SS
income will be about \$48k, plus dividends from non-tax deferred accounts, we will have a sizeable taxable yearly income that we can't get out of. Nice problem to have, but my job is to minimize taxes and maximize the NW while living a comfortable life.
The end result desired is to live well and leave as much to the kids as we can.
We struggle with this as well, but have several years before we are 62. RMDs + SS + pension will result in a very large tax bill. We might just have the higher wage earner wait until FRA (or maybe 70) to collect SS, and the other start at 62.

#### hdatontodo

• Bristles
• Posts: 272
• Location: Balto Co, MD
##### Re: How do you factor social security into your withdrawal stategy
« Reply #28 on: January 07, 2018, 03:46:56 PM »

Others can try this, it is basically, what if I stop paying SS taxes now but don't collect for years down the road.

I downloaded the social security Windows benefit calculator in which you manually enter each year of 30-some years of earnings and specify the retirement year.

I'm 57. I put in that I worked through 2017 and would retire at 62. The amount was \$1,825/mo. If I cleared 2017 to \$0 income, it said my monthly benefit would be \$1804.

#### MDM

• Walrus Stache
• Posts: 8857
##### Re: How do you factor social security into your withdrawal stategy
« Reply #29 on: January 07, 2018, 04:27:39 PM »
I followed the directions in the last paragraph and I get a number slightly higher than what SS projects with me working until 66 and collecting at 66 vs working until 62 and collecting at 66.
I know that's not correct. Don't see how I could have made a mistake. If other can make it work, then I'll post my data for others to peruse.
There is also the SocialSecurity tab in the case study spreadsheet, for those who prefer spreadsheets to canned programs.

#### NaturallyHappier

• Stubble
• Posts: 129
• Age: 53
• FIRED 3/10/2017
##### Re: How do you factor social security into your withdrawal stategy
« Reply #30 on: January 08, 2018, 04:49:47 AM »
You can also use my google spreadsheet (make a copy for yourself) to calculate the effect of ER on your SS income.

This will tell you how much you can expect to receive at 62, 65 and 70, but wont tell you whether it is better to take it early.  To do that I think you need to first come up with the age you expect to expire and then add up the amount you would receive by that time at each age to see which is highest.

#### Monkey Uncle

• Handlebar Stache
• Posts: 1406
• Location: West-by-god-Virginia
##### Re: How do you factor social security into your withdrawal stategy
« Reply #31 on: January 08, 2018, 05:03:48 AM »
You can also use my google spreadsheet (make a copy for yourself) to calculate the effect of ER on your SS income.

This will tell you how much you can expect to receive at 62, 65 and 70, but wont tell you whether it is better to take it early.  To do that I think you need to first come up with the age you expect to expire and then add up the amount you would receive by that time at each age to see which is highest.

SS is actuarially designed to pay out the same amount of lifetime benefits regardless of the age at which you start.  So if you live to the average life expectancy for your age/sex, you get the same amount over your lifetime whether you start at 62 or 70 or any age in between.  The only way to optimize from this perspective is if you have some special knowledge of when you expect to die.

#### NaturallyHappier

• Stubble
• Posts: 129
• Age: 53
• FIRED 3/10/2017
##### Re: How do you factor social security into your withdrawal stategy
« Reply #32 on: January 08, 2018, 05:59:09 AM »
SS is actuarially designed to pay out the same amount of lifetime benefits regardless of the age at which you start.  So if you live to the average life expectancy for your age/sex, you get the same amount over your lifetime whether you start at 62 or 70 or any age in between.  The only way to optimize from this perspective is if you have some special knowledge of when you expect to die.

Good point.  It does not take into consideration gender, or family history, so most will have some special knowledge....or at least an informed guess as to whether they expect to live shorter or longer.

#### SwordGuy

• Magnum Stache
• Posts: 4613
• Location: Fayetteville, NC
##### Re: How do you factor social security into your withdrawal stategy
« Reply #33 on: January 11, 2018, 08:57:35 PM »
If you are a high earner, most of what you're paying into social security is being given to someone else.   So if you quit working a few years early (just make sure it's no so many you don't qualify for SS!!!!), it really doesn't make much difference at all.

#### Classical_Liberal

• Handlebar Stache
• Posts: 1023
• Age: 42
##### Re: How do you factor social security into your withdrawal stategy
« Reply #34 on: January 11, 2018, 10:28:34 PM »
You can will your savings, you cannot will Social Security.

I think I've thought of everything and then this...  Smart!

One other thing to consider is market conditions once one becomes eligible for SS, particularly for the equity heavy investor (most of us).  For example, if at 63 you see a rather large, longer term correction point and assets take a hit, it may be advantageous to start drawing SS early.  This will help avoid drawdowns and allow you to be more price sensitive in assets sales.  If there's a bull in your early-mid 60's, then it might make more sense to keep SS as longevity insurance, allowing for more aggressive investing later in life.
before you get there, based on your current age:
Age 55+: no discount. Political suicide to mess with this cohort
46-54: -10%
40-45: -15%
<40: -20%
This is probably very realistic, but I'm a pessimist.

Personally, I'm only 41.  I do, however, think it's foolish to not account for some income from SS.  At my low spending levels it's just too much money to ignore and would cost me years of extra working.  I'm very conservative and assume 50% of my current earned benefit (ie if I never contributed again).  Obviously this amount goes up each year I do work.  This method basically provides me with a minimum inflation adjusted stash amount I need to maintain to age 62(early SS if I opt for it) for a 4%WR.  Once I near that age, future benefit levels will likely be less opaque and I can adjust accordingly.

Stash/25 >= Post Fire Annual Spend - (earned SS benefit @ 67 *.5)

If I'm FIRE'd, under age 62, and this equation becomes unbalanced; I need to fix it while I still have decent earning power.

In assuming a 50% of current earned benefit, I feel it's still extremely likely I will see more money from the system than I'm planning(both through new contributions and potential future fixes to the system).  A good enough safety margin for my tastes.
« Last Edit: January 11, 2018, 11:05:42 PM by Classical_Liberal »

#### rab-bit

• Stubble
• Posts: 114
##### Re: How do you factor social security into your withdrawal stategy
« Reply #35 on: January 12, 2018, 06:09:10 AM »
It's been stated many times and in many places, including here:

https://www.ssa.gov/policy/docs/ssb/v70n3/v70n3p111.html

that SS will remain solvent until around 2037 after which it will be able to pay out around 75% of scheduled benefits. So I think that even for younger people, a 25% reduction in expected SS benefits is a reasonable lower bound. As @Classical_Liberal mentioned, ignoring SS completely could result in working years longer than you would need to otherwise, and none of us wants that!

#### des999

• Stubble
• Posts: 168
##### Re: How do you factor social security into your withdrawal stategy
« Reply #36 on: January 12, 2018, 10:48:13 AM »
my expected SS with wife is about 40k plus a small pension.  That would easily cover my expenses.  I am starting to think about a draw down scenario that is more for 20-25 years, until the SS kicks in.  Even if it went to 0 I would be technically be ok as I could live off of SS.

This would assume SS is still in place as is today, so I have to take that into consideration, but I am more of a believer that it will be fine as too many people rely on it for them to let it crash and burn (some minor tweaks).

I also do not think I'll run my stash to 0 or close to it, but it makes me feel better knowing I have SS waiting.

I am 38, for a frame of reference.

#### mamagoose

• Bristles
• Posts: 355
• Location: FL
##### Re: How do you factor social security into your withdrawal stategy
« Reply #37 on: January 12, 2018, 10:56:34 AM »
We do not include it as expected income in retirement. If we do receive it (30 years from now), we will be the most generous grandparents ever.

#### TheWifeHalf

• Bristles
• Posts: 496
##### Re: How do you factor social security into your withdrawal stategy
« Reply #38 on: January 12, 2018, 02:37:50 PM »
Our plan (might change of course)

TheHusbandHalf worked for the railroad a little over 10 years in our first years of marriage. He paid what they call Tier 1 and Tier 2. I think Tier 1 is like social security.
That Tier 2 payment gives him (last checked 4 months ago) \$500/mo, and is paid with his Social Security check. So, he will get 36,000 at FRA, I will get half of that 2 years later, total 54,000.

He plans to stop working Jan 4 2019 At the time, he will have had that employer 28 years and will be 62 1/2. Between then and his FRA, we will use the money I got from a car accident to live, and to convert as much tIRA to Roth. The accident money is capitial gains and this is where I won't say anymore because I don't fully understand it. We will get health, dental insurance through his employer and (something I made him check) I will still be covered if something happens to him, say at 63 or 64. His medical insurance as a retiree: the company pays half and he is one of the highest seniority employees so the company pays another 30%. So, he will pay 20% of whatever the insurance is at the time..

When he stops working he will get his pension in a lump sum and it will go in his tIRA

I have DNA on my mother's and father's  side that lead me to believe I will go on into my mid 90's. He, mid 80's. This is why we are waiting until his FRA, because it might be 35 years that we get SS. If not, oh well. He has over 35 years of paying into SS or equivalent, so those 4 years of not working will not bring his monthly SS check down.

Something interesting, at least to me:
His brother worked for the railroad all his working days. In that case, a rr retiree gets Railroad Retirement, not SS. He is allowed, and did, retire at 60. He gets 7000 per month, his wife gets half. I'm not sure that all is worth the wear and tear on his body, but I say, Good for them!

#### Brahmaniac

• Posts: 3
##### Re: How do you factor social security into your withdrawal stategy
« Reply #39 on: January 16, 2018, 09:25:23 PM »
People who don't include Social Security are being mindless Sheeple, repeating media talking points instead of engaging their brain.

Medicare is more likely to run out of money than Social Security but I don't see any of them saying "I just assume I'll have to pay \$50,000 a year for health insurance when I'm 85 and if Medicare is actually still around I'll consider it a bonus."

(I mean, seriously, have you priced private health care for a pair of 80 year olds with pre-existing conditions?)

Since their retirement won't work at all without Medicare paying for their health care at an advanced age, they just assume it will be around to make all their numbers work. Even though it is more underfunded than Social Security and in much bigger trouble.

There is no world in which Medicare still exists but Social Security doesn't.

#### dude

• Handlebar Stache
• Posts: 2289
##### Re: How do you factor social security into your withdrawal stategy
« Reply #40 on: January 17, 2018, 01:16:53 PM »
People who don't include Social Security are being mindless Sheeple, repeating media talking points instead of engaging their brain.

Medicare is more likely to run out of money than Social Security but I don't see any of them saying "I just assume I'll have to pay \$50,000 a year for health insurance when I'm 85 and if Medicare is actually still around I'll consider it a bonus."

(I mean, seriously, have you priced private health care for a pair of 80 year olds with pre-existing conditions?)

Since their retirement won't work at all without Medicare paying for their health care at an advanced age, they just assume it will be around to make all their numbers work. Even though it is more underfunded than Social Security and in much bigger trouble.

There is no world in which Medicare still exists but Social Security doesn't.

Yep, and old people vote.  There is no way they (and the AARP) are going to let them take Medicare away. Down the road, we're all looking at hefty income tax increases to pay for this shit, especially after the GOP tax bill does its damage. Hopefully, people will WTFU and make the billionaires pony up.

• Handlebar Stache
• Posts: 1830
##### Re: How do you factor social security into your withdrawal stategy
« Reply #41 on: January 18, 2018, 05:13:38 AM »
Let's say you take Social Security (SS) at age 62 and are making \$20,000 a year. You collect for 8 years then die at age 70. You would have collected \$160,000 during that 8 years time. That is money you have not had to pull from your IRA's savings, bank accounts, etc. So had you waited till age 70 to get the big reward from Social Security, you would have gotten nothing because you died and the gubment doesn't pay dead people. However, your spouse would get the bigger check. I like the idea of using my SS money at an earlier age for a longer period of time and letting my little green soldiers (IRA's, etc.) grow big and strong. I have no children to will my money to but if I did, I would prefer to use my SS check to live on and leave my stache as untouched as possible. Hub and I collect \$43,600 with two SS checks plus a small pension which brings our income up to almost \$50K a year. Not bad income for not actually working for it! LOL! Love my 'welfare' checks! Laughing all the way to the bank! Hahahahaha!

#### MasterStache

• Handlebar Stache
• Posts: 1829
##### Re: How do you factor social security into your withdrawal stategy
« Reply #42 on: January 18, 2018, 06:34:23 AM »
SS will be the gravy on top of our other income. We intend to use it to boost our spending in our 60s and 70s while we're still healthy enough for long distance travel, then cover any potential increase in medical expenses as our health declines.

This is how we look at it as well , just in case against all my reasoning it would not be there for us.

Us as well. I don't factor SS at all. If we get some, awesome, it will help likely with medical and pay for some travel. My wife's pension is likely more relevant and we do factor that in somewhat.

#### fattest_foot

• Pencil Stache
• Posts: 593
##### Re: How do you factor social security into your withdrawal stategy
« Reply #43 on: January 18, 2018, 10:35:57 AM »
It's been stated many times and in many places, including here:

https://www.ssa.gov/policy/docs/ssb/v70n3/v70n3p111.html

that SS will remain solvent until around 2037 after which it will be able to pay out around 75% of scheduled benefits. So I think that even for younger people, a 25% reduction in expected SS benefits is a reasonable lower bound. As @Classical_Liberal mentioned, ignoring SS completely could result in working years longer than you would need to otherwise, and none of us wants that!

Just a correction, but the Social Security Trust Fund will remain solvent until 2037. Social Security remains solvent as long as there's still a payroll deduction for it and a pool of workers to draw from. The reason it drops 75% when the Trust Fund runs out of money is that they're essentially using it as an additional payment to current retirees because there's just too much money.

If you look at it as Social Security will always pay 100%, but current retiree's are getting about 133%, it'd be more accurate.

#### Bateaux

• Handlebar Stache
• Posts: 1266
• Location: Port Vincent
##### Re: How do you factor social security into your withdrawal stategy
« Reply #44 on: January 18, 2018, 12:05:23 PM »
My hope is that Social Security will be enough to  over health care.   I'm skeptical that it will be there in the two decades before I'll draw.  Offsetting the cost of increased medical costs with SS I'd consider a win.

#### Classical_Liberal

• Handlebar Stache
• Posts: 1023
• Age: 42
##### Re: How do you factor social security into your withdrawal stategy
« Reply #45 on: January 18, 2018, 08:12:38 PM »
People who don't include Social Security are being mindless Sheeple, repeating media talking points instead of engaging their brain.

Medicare is more likely to run out of money than Social Security but I don't see any of them saying "I just assume I'll have to pay \$50,000 a year for health insurance when I'm 85 and if Medicare is actually still around I'll consider it a bonus."

(I mean, seriously, have you priced private health care for a pair of 80 year olds with pre-existing conditions?)

Since their retirement won't work at all without Medicare paying for their health care at an advanced age, they just assume it will be around to make all their numbers work. Even though it is more underfunded than Social Security and in much bigger trouble.

There is no world in which Medicare still exists but Social Security doesn't.
Great comment!  Forced me to look through my own bias and cognitive dissonance.  We need more thought provoking posters now-a-days; too many facebook of FI comments and too little well though out posts.

My hope is that Social Security will be enough to  over health care.   I'm skeptical that it will be there in the two decades before I'll draw.  Offsetting the cost of increased medical costs with SS I'd consider a win.
Speaking of facebook of FI comments...  I'm always seriously amazed how people will see a trend for a few years and then extrapolate that into the future indefinitely.  It's not as if medical costs have no upper limit.

If SS disappears about 50% of grandma&pa's are literally starving in the streets.  As long as Western civilization is intact, so to will SS remain intact; or at least a very orderly transition to another program.

#### BTDretire

• Handlebar Stache
• Posts: 2307
##### Re: How do you factor social security into your withdrawal stategy
« Reply #46 on: January 21, 2018, 08:49:40 AM »
Let's say you take Social Security (SS) at age 62 and are making \$20,000 a year. You collect for 8 years then die at age 70. You would have collected \$160,000 during that 8 years time. That is money you have not had to pull from your IRA's savings, bank accounts, etc. So had you waited till age 70 to get the big reward from Social Security, you would have gotten nothing because you died and the gubment doesn't pay dead people. However, your spouse would get the bigger check. I like the idea of using my SS money at an earlier age for a longer period of time and letting my little green soldiers (IRA's, etc.) grow big and strong. I have no children to will my money to but if I did, I would prefer to use my SS check to live on and leave my stache as untouched as possible. Hub and I collect \$43,600 with two SS checks plus a small pension which brings our income up to almost \$50K a year. Not bad income for not actually working for it! LOL! Love my 'welfare' checks! Laughing all the way to the bank! Hahahahaha!

Collecting early is certainly one way to go, but what if you live to 85 yrs old and the stock market has a 10 year plateau when you are 62 to 72. Your nest egg will have no growth, but your SS check would grow by 8% a year from 62 to 70, if you waited.
We have had a 311% growth in the S&P during the last 9 years, this has a lot of people thinking that is just the way it is.
On the other hand The S&P was 1527 in Mar, 2000 and got back up to 1527 again in Mar, 2013. That's 13 years of just earning the dividends.

#### Mr. Green

• Handlebar Stache
• Posts: 1790
• Age: 35
• Location: Wilmington, NC
##### Re: How do you factor social security into your withdrawal stategy
« Reply #47 on: January 21, 2018, 01:44:39 PM »
It's been stated many times and in many places, including here:

https://www.ssa.gov/policy/docs/ssb/v70n3/v70n3p111.html

that SS will remain solvent until around 2037 after which it will be able to pay out around 75% of scheduled benefits. So I think that even for younger people, a 25% reduction in expected SS benefits is a reasonable lower bound. As @Classical_Liberal mentioned, ignoring SS completely could result in working years longer than you would need to otherwise, and none of us wants that!

Just a correction, but the Social Security Trust Fund will remain solvent until 2037. Social Security remains solvent as long as there's still a payroll deduction for it and a pool of workers to draw from. The reason it drops 75% when the Trust Fund runs out of money is that they're essentially using it as an additional payment to current retirees because there's just too much money.

If you look at it as Social Security will always pay 100%, but current retiree's are getting about 133%, it'd be more accurate.
This is inaccurate. The system is designed so that what retirees get currently is 100%. If the Trust Fund is exhausted that simply means the money paid in can no longer support the amount paid out, and the formula needs to change.

#### Monkey Uncle

• Handlebar Stache
• Posts: 1406
• Location: West-by-god-Virginia
##### Re: How do you factor social security into your withdrawal stategy
« Reply #48 on: January 22, 2018, 04:29:03 AM »
Let's say you take Social Security (SS) at age 62 and are making \$20,000 a year. You collect for 8 years then die at age 70. You would have collected \$160,000 during that 8 years time. That is money you have not had to pull from your IRA's savings, bank accounts, etc. So had you waited till age 70 to get the big reward from Social Security, you would have gotten nothing because you died and the gubment doesn't pay dead people. However, your spouse would get the bigger check. I like the idea of using my SS money at an earlier age for a longer period of time and letting my little green soldiers (IRA's, etc.) grow big and strong. I have no children to will my money to but if I did, I would prefer to use my SS check to live on and leave my stache as untouched as possible. Hub and I collect \$43,600 with two SS checks plus a small pension which brings our income up to almost \$50K a year. Not bad income for not actually working for it! LOL! Love my 'welfare' checks! Laughing all the way to the bank! Hahahahaha!

Collecting early is certainly one way to go, but what if you live to 85 yrs old and the stock market has a 10 year plateau when you are 62 to 72. Your nest egg will have no growth, but your SS check would grow by 8% a year from 62 to 70, if you waited.
We have had a 311% growth in the S&P during the last 9 years, this has a lot of people thinking that is just the way it is.
On the other hand The S&P was 1527 in Mar, 2000 and got back up to 1527 again in Mar, 2013. That's 13 years of just earning the dividends.

That situation is precisely when you need to be collecting a SS benefit.  It helps ease sequence of return risk because you are pulling less out of your portfolio.

It's been said before, but it bears repeating: if you live to the normal life expectancy for someone your age, your total inflation-adjusted payout over your lifetime is the same regardless of the age at which you start collecting.  That 8%/yr growth in your SS payment is offset by the fact that you aren't getting a benefit check from age 62 to 70.  It is NOT the same thing as an 8% return on an investment.

What really matters is what is happening with your portfolio during those years, and the age at which you actually die.  Unfortunately neither of those things can be predicted with any accuracy.  The best you can do is model your personal situation using a tool like cFiresim to see which strategy would have optimized your metric of interest in the worst-case market return scenarios of the past.
« Last Edit: January 22, 2018, 07:39:05 AM by Monkey Uncle »

#### Classical_Liberal

• Handlebar Stache
• Posts: 1023
• Age: 42
##### Re: How do you factor social security into your withdrawal stategy
« Reply #49 on: January 22, 2018, 08:55:01 AM »
The best you can do is model your personal situation using a tool like cFiresim to see which strategy would have optimized your metric of interest in the worst-case market return scenarios of the past.

Actually, the best thing you can do is wait until you're eligible.  Then, take one of the unknowns out of the equation. IOW, am I at high risk for a sequence issues based on real world market conditions from 62-70?  Then decide when to take SS.  If sequence issues are not a problem you have free longevity insurance, taking the other unknown out of the equation.

It's like having a lifeline against one or the other (sequence of returns nightmare or super-long life).  You get to choose when to take the lifeline based on risk factors at the time.