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Old 06-03-2016, 11:45 AM   #61
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It makes a difference for our retirement date decision(s). Without SS, we are at a 4.4% WR and with it we are 2.8%. So I am in a bit of a quandary about it.

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Old 06-03-2016, 12:22 PM   #62
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Actually, the Social Security Administration is pre-spending SS. According to current estimates the trust fund runs out in 18 years. It was 19 years before the last budget raided retirement benefits to pay for SSDI. After that, only 79% of benefits can be paid.

This could be earlier, if say, a bunch of 30 year olds decide to retire early.

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Old 06-03-2016, 04:36 PM   #63
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If "pre-spending SS" is defined as withdrawing more from an IRA today because we know we will eventually get SS,

then, sure, that's what we're doing.
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Old 06-03-2016, 04:44 PM   #64
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Originally Posted by marko View Post
That is exactly how I understand it and what I meant be 'pre-spending' SS.

My original question was whether people spend less until SS arrives and then consider it a raise that brings them up to their calculated spending level when it does arrive.
Still not clear but our retirement plan spending does not change for anything other than inflation. Current WR (2017 withdrawals/proj Dec 2016 balance) is 4.3%. WR in first full year of SS is 2.6% (2026 withdrawals/proj Dec 2016 Balance)

As a practical matter once those income streams are online we might well splurge more but no "plan" to consider it a raise. We should probably be spending more now.
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Anyone "Pre-spending" SS?
Old 06-03-2016, 04:45 PM   #65
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Anyone "Pre-spending" SS?

Originally Posted by RunningBum View Post
It's been quite awhile since I've used Firecalc so I can't say for sure but I didn't think Firecalc gives you a SWR. From what I see, you give it your portfolio and SS with planned begin date, along with your expenses, and Firecalc tells you if that plan works based on history. If you go take 4 extra years out of your portfolio to make up for the shortfall before you start collecting SS, you are no longer following the plan that you entered into Firecalc.

If you use a tool like I-orp, it would have you taking more out of your portfolio early, then reducing that when your SS kicks in.

Someone more familiar with those tools can correct me if I'm wrong.

Like you say, it's only 4 years. But if you were doing this for 20 years, I think you could see clearly this is wrong and puts your portfolio at risk. For 4 years, or even 1 year, is still wrong, but just not nearly as risky as 20 years.

In the "investigate" page of firecalc, there is a "Given a success rate, determine spending level for a set portfolio" this takes into account the data you enter regarding your SS benefits

When I run in this mode and don't include SS the difference in what it says my speeding level is is about 14000 a year less which is less than my as benefits at FRA so it is accounting for SS input in a manner that one would expect

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