Could you retire without social security?

[hankster]

I'm looking for another option on the poll. "Didn't need SS to meet our basic spending, but I still would have deferred retirement without SS because SS is part of our margin for safety or for extras."

We should certainly be able to retire without SS, but I would choose to delay retirement if the anticipated amount was not available. I'd rather w*rk longer to avoid spending retirement on a bare bones budget.

 

[Danmar]

Canada's pension plan (CPP) is on a sound actuarial footing. Total pension is only about $11k/yr though. A supplemental amount (about $6k/year) is clawed back for earnings over about $65k/yr. Totally immaterial to our retirement. No plans to give back though.

 

[Moemg]

when I turn 62 I'm really going to go nuts. I'm going to surprise DW with a divorce, and go for lunch at Hooters.

You had better have a strong drink with your chicken wings because by the time the bill comes your DW will have frozen all credit cards and be hooking up with a cut throat lawyer !

 

[79protons]

Wow.... everyone around 40+ and under seems to be willing to concede what they have paid in and rollover??

You paid into it... you should get it. Make sure you make it clear to your senators and representative that you expect them to deal with the problem.

FINALLY! One voice of reason on here. Why should everyone under 40 (or those just around that age) give up up to 20+ years of SS they have already paid into the system so easily? It is this lax attitude that scares me more than anything about that (my) generation. "Oh, well, I don't really expect SS to be around when I retire, even though I am paying 12.4% a year, have been paying 12.4% a year, and will pay 12.4% a year for the foreseable future" Huh?

These type of polls tend to condition our generation to accept the fact that we are going to get screwed in the future. The correct response would be "I see something is wrong with SS and I want it fixed now, even if that means a reduction in current benefits for those already retired". If your portfolio is hurting, what do you do? you reduce your SWR. We need to reduce the SWR of SS right now so that the portfolio can survive.

 

[GregLee]

The first farmer who said "A lot of children may be a burden today, but at least I'll have someone to care for me in my old age" was building an underfunded pension system.

No, because those children provided a future income stream to the farmer. We characterize a pension system as "underfunded" when the future income stream from workers paying into the system will not suffice to meet the anticipated obligations. The farmer's plan was not underfunded. Ours are.

 

[samclem]

The correct response would be "I see something is wrong with SS and I want it fixed now, even if that means a reduction in current benefits for those already retired". If your portfolio is hurting, what do you do? you reduce your SWR. We need to reduce the SWR of SS right now so that the portfolio can survive.

Let's see where this "cut the SWR rate" idea leads, and the impact on you. Monthly SS payments to folks who had low earnings histories are already low--if they get cut further, many of these folks will be in serious hurt or on other forms of govt assistance (so, no net savings to taxpayers). So, we probably can't do an across-the-board benefits cut. We could also save by increasing the retirement age, which is already happening, and we may be able to take it farther. But the serious savings (and that's what you wanted) come from means testing payouts. Let's say that happens--how are you going to play that hand? Two options--
A) Accumulate only a tiny nest egg (so you're sure to benefit from the SS program). Spend the money while you are young--enjoy!
B) Save like crazy because this whole SS scheme is turning into a welfare scheme and you don't know how low the limbo bar will go.

You can't do A, because it's exactly what you criticized the Boomers for doing.
You can do B. In fact, you can do B regardless of what happens with SS. Which is exactly what most folks here have done, according to the poll. If you end up getting some SS checks, that's gravy.

 

[Khan]

To answer the original question: I could live without it, but my pension decreases at age 62.

 

[harley]

Let's see where this "cut the SWR rate" idea leads, and the impact on you. Monthly SS payments to folks who had low earnings histories are already low--if they get cut further, many of these folks will be in serious hurt or on other forms of govt assistance (so, no net savings to taxpayers). So, we probably can't do an across-the-board benefits cut. We could also save by increasing the retirement age, which is already happening, and we may be able to take it farther. But the serious savings (and that's what you wanted) come from means testing payouts. Let's say that happens--how are you going to play that hand? Two options--
A) Accumulate only a tiny nest egg (so you're sure to benefit from the SS program). Spend the money while you are young--enjoy!
B) Save like crazy because this whole SS scheme is turning into a welfare scheme and you don't know how low the limbo bar will go.

You can't do A, because it's exactly what you criticized the Boomers for doing.
You can do B. In fact, you can do B regardless of what happens with SS. Which is exactly what most folks here have done, according to the poll. If you end up getting some SS checks, that's gravy.

+1. Exactly.

 

[79protons]

Let's see where this "cut the SWR rate" idea leads, and the impact on you. Monthly SS payments to folks who had low earnings histories are already low--if they get cut further, many of these folks will be in serious hurt or on other forms of govt assistance (so, no net savings to taxpayers). So, we probably can't do an across-the-board benefits cut. We could also save by increasing the retirement age, which is already happening, and we may be able to take it farther. But the serious savings (and that's what you wanted) come from means testing payouts. Let's say that happens--how are you going to play that hand? Two options--
A) Accumulate only a tiny nest egg (so you're sure to benefit from the SS program). Spend the money while you are young--enjoy!
B) Save like crazy because this whole SS scheme is turning into a welfare scheme and you don't know how low the limbo bar will go.

You can't do A, because it's exactly what you criticized the Boomers for doing.
You can do B. In fact, you can do B regardless of what happens with SS. Which is exactly what most folks here have done, according to the poll. If you end up getting some SS checks, that's gravy.

I actually like a combo of A + B. Accumulate a decent nest egg but retire early, depending on SS for your later years. It is very easy to get around means testing, as it is almost impossible for the government to evaluate every single item every family owns (art, houses, jewelry, money under matress, gold bars buried in the basement, etc.). If the means testing is just based on income, then Roths and municipal bonds could get around that too. Another advantage of depending on SS and retiring earlier than you otherwise could is that you stop paying into the supposed SS Ponzi scheme. If you keep working, you keep perpetuating it.

 

[BTravlin]

FINALLY! One voice of reason on here. Why should everyone under 40 (or those just around that age) give up up to 20+ years of SS they have already paid into the system so easily? It is this lax attitude that scares me more than anything about that (my) generation. "Oh, well, I don't really expect SS to be around when I retire, even though I am paying 12.4% a year, have been paying 12.4% a year, and will pay 12.4% a year for the foreseable future" Huh?

These type of polls tend to condition our generation to accept the fact that we are going to get screwed in the future. The correct response would be "I see something is wrong with SS and I want it fixed now, even if that means a reduction in current benefits for those already retired". If your portfolio is hurting, what do you do? you reduce your SWR. We need to reduce the SWR of SS right now so that the portfolio can survive.

I agree that your generation should not throw in the towel so easily. Get involved and push your representatives to fix the problem now.

But I seriously disagree with cutting the benefits of those who have already retired. Those retirees were promised certain benefits by the government and they made plans for their retirement based on those promises. Reducing their benefits after they've retired is not acceptable. Not saying it won't happen but it's not the right way to go about it. SOme retirees have sufficient assets to weather the change while many others do not.

 

[79protons]

But I seriously disagree with cutting the benefits of those who have already retired. Those retirees were promised certain benefits by the government and they made plans for their retirement based on those promises. Reducing their benefits after they've retired is not acceptable. Not saying it won't happen but it's not the right way to go about it. SOme retirees have sufficient assets to weather the change while many others do not.

This is a flawed arguement because those who have not retired yet but have been paying into SS for 20+ years also have made plans (or been forced to make plans by having 12.4% of their pay deducted). Sure, they may have *some* time to make other arrangements, but with the current economy and fear that we may not get the historic 10% stock market returns that past generations did, it is not a given that you can weather the "change" if you are only 40ish. Besides, I see many grays buying lotto tickets or playing $1 slots, so things must not be *that* bad for some of them. Certainly something like a 2% cut if you are 80+, a 5% cut if you are 70+, 10% if you are 60+, etc. would be a lot more fair than just saying don't expect anything if you are <45.

 

[Gumby]

This is a flawed arguement because those who have not retired yet but have been paying into SS for 20+ years also have made plans (or been forced to make plans by having 12.4% of their pay deducted). Sure, they may have *some* time to make other arrangements, but with the current economy and fear that we may not get the historic 10% stock market returns that past generations did, it is not a given that you can weather the "change" if you are only 40ish. Besides, I see many grays buying lotto tickets or playing $1 slots, so things must not be *that* bad for some of them. Certainly something like a 2% cut if you are 80+, a 5% cut if you are 70+, 10% if you are 60+, etc. would be a lot more fair than just saying don't expect anything if you are <45.

Okay, you've convinced me. There's only one solution to our problem.

 

[BTravlin]

This is a flawed arguement because those who have not retired yet but have been paying into SS for 20+ years also have made plans (or been forced to make plans by having 12.4% of their pay deducted). Sure, they may have *some* time to make other arrangements, but with the current economy and fear that we may not get the historic 10% stock market returns that past generations did, it is not a given that you can weather the "change" if you are only 40ish. Besides, I see many grays buying lotto tickets or playing $1 slots, so things must not be *that* bad for some of them. Certainly something like a 2% cut if you are 80+, a 5% cut if you are 70+, 10% if you are 60+, etc. would be a lot more fair than just saying don't expect anything if you are <45.

It's not a flawed argument because many retirees have been out of the job market for awhile and can't readily jump back in to patch the holes imposed upon their plans. Those who have no yet retired have many more options available to them for dealing with the problem. And, yes, I already agreed that some retirees would be able to cope with the changes.

The real answer though is to force our representatives to act now rather than continually putting off unpopular changes. The sooner they act the less drastic the fixes will be.

 

[79protons]

It's not a flawed argument because many retirees have been out of the job market for awhile and can't readily jump back in to patch the holes imposed upon their plans.

Two words: Walmart Greeter

 

[M Paquette]

Two words: Walmart Greeter

We're gonna need more WalMarts...

 

[BTravlin]

Two words: Walmart Greeter

I've two word for you: two jobs

 

[GregLee]

But I seriously disagree with cutting the benefits of those who have already retired.

Absolutely. Me, too. Because I have already retired, and I do not want my benefits to be cut.

 

[saluki9]

From a macro perspective, all old age support systems are "underfunded", because so many of the economic goods that old people use have to be produced at about the same time as they are used. No pension scheme completely avoids that issue.

And from an actuarial perspective, that's BS.

 

[saluki9]

Whoa, dude! Righteous postslamming those greedy boo-boo's! Major angst download! Stressed over SS or just a 5-Hour Energy rush? Working too hard at GameStop? Too much caffeine? Like, maybe you need to take a break from those $6 double-shot Sumatran fair-trade mochalatte espressos you've been slamming while blogging from the free Starbucks wi-fi hotspot. Scooter on over to AGE or Third Millennium Headquarters to lick chai-flavored virtual fundraising envelopes and make prank phone calls to those avaricious AARP members. Meritorious post, bro, a double-knuckle bump!

Oh, and here's a link you may want to discuss at the next "Don't Undermine My Benefits- Axe Social Security!" podcast blamestorming meeting. Just don't tell them you got it from a boomer on the geezerweb and you'll be like, totally golden.

The Generation Gambit

Don't worry, I'm sure at least your spouse finds you funny.

 

[veremchuka]

This is a flawed arguement because those who have not retired yet but have been paying into SS for 20+ years also have made plans (or been forced to make plans by having 12.4% of their pay deducted). Sure, they may have *some* time to make other arrangements, but with the current economy and fear that we may not get the historic 10% stock market returns that past generations did, it is not a given that you can weather the "change" if you are only 40ish. Besides, I see many grays buying lotto tickets or playing $1 slots, so things must not be *that* bad for some of them. Certainly something like a 2% cut if you are 80+, a 5% cut if you are 70+, 10% if you are 60+, etc. would be a lot more fair than just saying don't expect anything if you are <45.

and at that rate by the time they get to 45 guess what? 95% cut, see not a good idea.

also you kept saying 12.4%, ss is 6.2% unless you are self employed then it is 12.4% and that is an outrageous amount to loose even if you get to collect ss.

 

[bbbamI]

I like bacon.

 

[W2R]

I like bacon.

Bacon is good! Even though there isn't any bacon in my shrimp po'boy.

 

[Independent]

No, because those children provided a future income stream to the farmer. We characterize a pension system as "underfunded" when the future income stream from workers paying into the system will not suffice to meet the anticipated obligations. The farmer's plan was not underfunded. Ours are.

There could be a definition problem. I thought I knew what Saluki meant, but you have a different possibility. I'll be wordy to try to sort it out.

I guessed Saluki was saying that any pension scheme that doesn't own enough stocks/bonds today to pay all benefits that have already been accrued is "underfunded".

You're thinking he meant that pay-as-you-go systems can be "fully funded" if the current formulas for contributions and benefits look like they will provide annual contributions each year in the future to pay that year's benefits, even if the system doesn't own any financial assets at all.

Under the first definition, no paygo public system like Social Security nor any informal "take care of your parents when they need you" system could be ever be fully funded.

Under the second definition, SS is adequately funded in the near term since taxes are expected to match benefits for the next 5 or so years. But, it's not
adequately funded in the out years because the current benefit formula is expected to generate future benefits that exceed future taxes. (I think this is what you are saying.)

I can agree with both statements above, it's just a matter of clarifying what "underfunded" is supposed to mean. If Saluki is still around, I'll let him do that.

 

[saluki9]

I can agree with both statements above, it's just a matter of clarifying what "underfunded" is supposed to mean. If Saluki is still around, I'll let him do that.

You are correct. You inferred exactly what I was thinking. SS should have at least been funded using the same methodology (ABO,PBO, etc) that our same government requires of private companies.

I was not suggesting that boomers should not get SS, I was pointing out that while the system is still solvent, all participants should make a sacrifice to save it.

Based on what I have seen from some other posters, they are content with letting it break as long as it doesn't affect their benefit. This of course being the same attitude that explains a lot of what goes on with out government.

 

[REWahoo]

Based on what I have seen from some other posters, they are content with letting it break as long as it doesn't affect their benefit.

I'm not seeing this in the posts I've been reading. Can you link to these comments so I can see what I've missed?