Are you counting on SS?

[gayl]

I would count on it once I decided to take it. Do not take away my benefits once I am getting them or else.... My big decision is whether I take it at 65 (January) or FRA (66) when I apply for Medicare and have it deducted from it. I am waiting to see what the ACA turns out for DW in 2019 who is only 60 this year as it would put our MAGI up. The difference for me if I take it at 65 vs 66 is only (-150pm or $1800pa). If by taking it at 65 vs 66, it increases DWs ACA by ~$400 a month, that is $4800pa, I will wait.

Medicare A is free but if not applying for Medicare B until 66, will you incur a penalty for applying a year late? Mom applied for it late and was assessed a higher premium every month. Has that gone away?

 

[ShokWaveRider]

Medicare A is free but if not applying for Medicare B until 66, will you incur a penalty for applying a year late? Mom applied for it late and was assessed a higher premium every month. Has that gone away?

I know that very well. I will take Medicare at 65 but not SS

 

[Ronnieboy]

A few days ago, DS (who is 29) was explaining to me how he will never see any of the SS deducted from his paycheck. It's no consolation to him when I explain that I thought the same thing at 29, and thus never planned for it. He says it's different now. And maybe it is.

It is a little different, back in 1950 there were 16.5 workers paying into SS for every person receiving benefits, but in 2012 there were only 2.9 workers paying into the system for every person receiving benefits. Due to increasing life spans, large baby boom population, expansion of social security programs.

Yes, I'm counting on it -- like others here, at least 75% after 2035. That's for the sake of arriving at a conservative estimate in my retirement planning. But I'm not giving up on the remaining 25%. Any politician wishing to make the 75% permanent will have a major battle on their hands.

Just from reading the comments here on this thread I can see why politicians are scared to mess with SS.

Heck, I have even read where Warren Buffett collects his social security and he's worth $82 Billion dollars. His social security deposit in his account must look like 1 penny was added compared to his net worth

It is the 'I paid into it and I am going to get something out of it' mind set that is just human nature when it comes to SS. Even when we don't think the same with the other taxes we pay (getting a physical $$ amount vs infrastructure, schools, police, military, etc. that taxes provide).

When I started thinking about retirement in general, I didn't expect SS to be there. As I have gotten older, I expect something will be there and I will be taking it when it is the best financial time to take it for myself and DW. I consider it our 'bond' portion of our portfolio.

Probably the best way for the government to fix it is to have a group of retiring politicians who have no fear of repercussions draft the bill and be the 'face' of the bill (for all the hate mail, calls and threats) to get something passed

 

[gayl]

I know that very well. I will take Medicare at 65 but not SS

My bad. I thought you were waiting

 

[Cessna152]

If SS did not exist we would have had to wait roughly 8 more years to retire. Our retirement this year makes us dependent on SS. Though we wont actually be taking SS for another 7 and 8 years (when we turn 70.) We’ll be doing an “unsafe” withdrawal rate of our assets to bridge that time span.

 

[Dogman]

I am without question going to take it as I have payed into the system about $290,000. However I cannot take SS until after I turn 65 due to Obamacare which requires me to keep my income under $65,000.00 or I do not get a substidy. If I earn over $65,000 the insurance for my wife and I would cost $29,500.00 in AZ with a $7,000. deductable. Plus the $29,500.00 insurance is no better than the lowest cost substidy. No choice here in AZ. Therefore, I will wait to take my SocialSecurity until sometime after I reach Medicare age. Living on dividends and saving.
But hey life is great sold my business at 61.5 yrs and I have found that doing nothing is great. Have learned to be a HVAC expert, dog groomer expert, cat groomer expert (lion cut my speciality), I have found I can repair almost anything with a little patience and YouTube. Life is good, food is good, and dogs are great!

 

[Dtail]

If SS did not exist we would have had to wait roughly 8 more years to retire. Our retirement this year makes us dependent on SS. Though we wont actually be taking SS for another 7 and 8 years (when we turn 70.) We’ll be doing an “unsafe” withdrawal rate of our assets to bridge that time span.

Well if you ran your numbers through Firecalc even though retired, even if you have an "unsafe" WR, your overall portfolio survival probably was fine.

 

[lribookend]

One thing I was thinking, (Bet you were wondering what the noise was) I would have thought SS would be getting somewhat of boost because of the current ultra low unemployment stats. Would this not mitigate the gradual depletion somewhat?

I think it definitely would do so. Also, the ones who will probably pay the price to keep SS solvent are younger workers. I expect to see their SS taxes increase considerably, as well as a moving forward of the age of eligibility. Also, a very slight decrease in benefits may occur, but politically, the hot potato of SS is a sacred cow. Changes will most likely affect future retirees, not current retirees. Just my opinion.
Larry

 

[mountainsoft]

If SS did not exist we would have had to wait roughly 8 more years to retire. Our retirement this year makes us dependent on SS. Though we wont actually be taking SS for another 7 and 8 years (when we turn 70.) We’ll be doing an “unsafe” withdrawal rate of our assets to bridge that time span.

Our situation is very similar. With my wife and I both taking SS at 62, our success rate (Flexible Retirement Planner) is 100%. Without SS our success rate drops to 4% or less if we retire the same year. So yes, we are definitely counting on SS as part of our retirement, though I'm only planning to receive 75% of the benefits SS estimates.

I have not taken the time to calculate how long we would need to work if we did not have SS. Might be an interesting experiment when I get the time.

Like you, we'll be taking large 8% to 16% withdrawals from my IRA during the first 7-8 years. Once we start SS we won't really need the IRA anymore so the withdrawal rate will drop to 0% until I have to take RMD's.

 

[audreyh1]

Yes, but only "counting on it" to pay Medicare Part B & the cost of supplement plans.

Same here.

 

[joeea]

Economically, a portion of those payments has been covered with new borrowing from the public since 2010.
That portion will continue to go up.

What is this "borrowing"? Can you provide a link to an explanation of what you mean?

 

[joeea]

Today, SS borrows, albeit indirectly through trust fund expenditures putting claims on current GF tax dollars, increasing the deficit outside of SS.

If by "borrows" you mean "receives payments with interest on the money borrowed from their trust fund" then you are correct.

In that sense, you are borrowing money from the bank when you receive interest on your CDs.

That's not how most people would use the term "borrows".

 

[joeea]

I expect to see their SS taxes increase considerably

What would "considerably" be in your view?

 

[flyingaway]

I believe social security is a mandatory retirement savings program. If they do away with it without a proper replacement, there will be a lot of old people needing support.

 

[Independent]

What is this "borrowing"? Can you provide a link to an explanation of what you mean?

SS has tax revenue and it has expenses. The revenue has been lower than the expenses since 2010. See the link above to the Trust Fund history.

The Trust Fund worksheet shows that the gap is covered by "interest" from the general fund. But, the general fund is already in hole. The only way it can pay that interest is to borrow money from the public.

If SS raised taxes or cut benefits this year, the federal gov't would borrow less money from the public as a result.

The borrowing is the normal T-bills and T-bonds that the Treasury routinely sells.

 

[jkern]

Technically I can survive without SS. I could get my withdrawal rate to 3% if I wanted to. However, I will start SS at 62 (less than 1 1/2 years) and plan on it. This will give me a lot of flexibility. Increase financial security, self insure LTC, self insure Earth Quake hazard, increase Standard of Living if desired, and/or secure a legacy for children/grandchildren.

 

[scrabbler1]

If by "borrows" you mean "receives payments with interest on the money borrowed from their trust fund" then you are correct.

In that sense, you are borrowing money from the bank when you receive interest on your CDs.

That's not how most people would use the term "borrows".

What I meant by "borrows" is just what Independent wrote in post 2 above this one in answering a similar question from you.

 

[Carpediem]

If SS did not exist we would have had to wait roughly 8 more years to retire. Our retirement this year makes us dependent on SS. Though we wont actually be taking SS for another 7 and 8 years (when we turn 70.) We’ll be doing an “unsafe” withdrawal rate of our assets to bridge that time span.

Our situation is very similar. With my wife and I both taking SS at 62, our success rate (Flexible Retirement Planner) is 100%. Without SS our success rate drops to 4% or less if we retire the same year. So yes, we are definitely counting on SS as part of our retirement, though I'm only planning to receive 75% of the benefits SS estimates.

Thank you both for your posts. Our situation is exactly what you both described. With all the talk about a SWR of 4% or less, I have worried and worried that our starting WR was well over 4% until I reach SS (probably at 70 but possibly at FRA). I will turn 60 later this year and yes, we are definitely counting on SS being there.

I have run FireCalc and FRP until there was smoke coming from my computer and all scenarios that included my full SS amount are at or near 100%. We could withstand a 25% SS haircut but we'd need to cut back on the travel budget and possibly other discretionary items.