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Social Security - yay or nay?
Old 12-30-2007, 08:09 PM   #1
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Social Security - yay or nay?

Retirement begins on Tuesday. I've run all of the calculations based on NOT getting any social security. Obviously, adding it in provides a nice cushion. For someone like me (52 and single,) do you:

A) count on nothing
B) count on getting everything to which you're entitled (based on the current numbers)
C) count on a reduced amount, say 50%
D) other

All of it, none of it, half of it or some other entirely different plan. The voting begins right now...and thanks.
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Old 12-30-2007, 08:19 PM   #2
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I am your age. I don't count on it for calculating a withdrawal rate. But, as a person without a pension, without retiree health care, I sure would like both SS and Medicare to be there. I doubt that I would have retired if we didn't have that social safety net. Especially as I have relatives that will depend on both.
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Old 12-30-2007, 08:20 PM   #3
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At 52 I'd probably plug in 75% of your projected benefit, even though I think that may be too conservative. Better safe...
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Old 12-30-2007, 08:23 PM   #4
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I'm counting on getting enough from social security to cover health insurance. No more, no less. I don't believe anyone who is currently old enough to pay taxes will be without any social security in retirement. They may have to wait longer to collect or get a reduced benefit of up to 50% compared to todays retirees but there is zero chance in my opinion that they will be entirely without social security. With private pensions going extinct, S.S. is a must for over half the population. In terms or retirement savings my parents are better off than most people I know of and they have less than 250K net worth including house. Without S.S. they would be homeless before age 75.
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Old 12-30-2007, 08:25 PM   #5
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I think it will be there at your current rate. However I feel taxes will be higher.
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Old 12-30-2007, 08:29 PM   #6
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For me at 40, I plug in nothing. For you at 52... well, I'd still plug in nothing.

Potential downside: You have more money available in 10+ years that you didn't count on. You could have safely spent more during those years.

Potential upside: (1) The system more or less collapses, and you have a small fraction or none of the money you were 'promised'. You're still in good shape, instead of scrambling to cut costs/find paid employment. (2) The system stays more or less intact, and you have a significant portion of what you were 'promised'. You now have more money to spend if you want, or more cushion. Either is great!

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Old 12-30-2007, 08:32 PM   #7
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I am 49 and retired. I do not expect anything from SS, and did not count on it to make my
decision last. year. I think the most likely outcome is that most of what I would get if I was
62 now will be means-tested away from me by the time I get there, but this does not upset
me. I always considered SS a tax to pay for poor, current retirees, not a piggy bank for me
in the future. Of course, I will file for what I can at 62, just like I filed for the 1 week of
unemployment I qualified for in my career ($230 in 1997).
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Old 12-30-2007, 08:35 PM   #8
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I would say C. However, I would think 75% of current is a conservative estimate. But if 50% lets you sleep at night use that.
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Old 12-30-2007, 09:08 PM   #9
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I'm planning on 100%, but I'm assuming it will all be taxed as income. So maybe close to the 75% answer.

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Old 12-30-2007, 09:10 PM   #10
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At 56, I am FIREd (6 months now ... and still grinning from ear to ear) and am counting on getting my stated allocation. I did not add SS in when computing my numbers, so this will be a 'bonus' for me. If I get enough to cover the medicare and health insurance premiums I will be happy. Maybe a little left over for a bottle or two of 18 year old scotch or a nice XO Cognac.
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Old 12-30-2007, 09:14 PM   #11
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I vote "C" -- something, maybe 50%.
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Old 12-30-2007, 09:28 PM   #12
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Quote:
Originally Posted by ARB57 View Post
Retirement begins on Tuesday. I've run all of the calculations based on NOT getting any social security. Obviously, adding it in provides a nice cushion. For someone like me (52 and single,) do you:

A) count on nothing
B) count on getting everything to which you're entitled (based on the current numbers)
C) count on a reduced amount, say 50%
D) other

All of it, none of it, half of it or some other entirely different plan. The voting begins right now...and thanks.
I would say (C). You will probably get the full amount, but it might be significantly reduced by higher taxes, inflation, and so on. It would probably be smart to arrange your ER so that you don't need it for survival, just in case.

I am 59, and I am including it in my plans even though I don't intend to claim it until I am 66. However, I won't need it for survival. It will make my life easier.
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Old 12-30-2007, 10:33 PM   #13
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I don't count on any for my calculation, but expect to get 75%...

I will just use it for 'more fun'.... I hope to travel and that will mean I can travel more (or better)... if I get less... then nothing lost as I will have enough to live on, but not a lot more..
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Old 12-30-2007, 10:37 PM   #14
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75%. This is very close to the amount the actuary types say if "nothing" is done to shore up the system, then in 2042 the sytem will be only able to pay x% of promised SS benefits.

If you look at your latest annual SS benefit estimate statement, I think it says this percent in there somewhere.
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Old 12-30-2007, 10:39 PM   #15
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I am almost 60 and counting on 90% of it.
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Old 12-30-2007, 10:40 PM   #16
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I'm 50 and my DH is 53. He wants to retire when he's 55. When I run firecalc, I get 100% success rate when I add ss. When I use 50% ss, I get 100%, and when I don't add ss, I get 80%.

If we need to cut our withdrawal rate, we can get by with 30% less.

Besides, what if his pension stops, medical benefits are cut, stock market crashes, and so on. Life happens.
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Old 12-30-2007, 10:44 PM   #17
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If I were to make a prediction, I'd guess that maybe 75% of what my current benefit projection is will be available and tax law changes will likely reduce that below 50% value. However, since I cannot count on it, I plan for zero. If I am pleasantly surprised, I will have no problem reducing my SWR or increasing my spending. If I am right, or worse, then the fact that I planned for it not to be there at all means I can continue with ER and not be caught with less income than I planned.
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Old 12-30-2007, 10:48 PM   #18
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I'm 51 1/2 and like others my age here I'm not counting on getting SS but still think I'll get most of what the estimates are telling me today....but I wouldn't be suprised if the amount is reduced OR I'm taxed at a higher rate OR they delay the age at which I can start collecting it. So, I don't include it in my ER decision.
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Old 12-30-2007, 10:59 PM   #19
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I bailed out in April at 50, and I didn't count SS in while figuring up my ER finances. If it's there...it's there. If it's not....it's not. With that stated, I plan on collecting at 62, and I pretty much expect that I'll get about what the estimates say. Fortunately for me, it'll be like extra hot fudge on my sundae!
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Old 12-31-2007, 05:56 AM   #20
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Quote:
Originally Posted by REWahoo View Post
At 52 I'd probably plug in 75% of your projected benefit, even though I think that may be too conservative. Better safe...
That 75% is not conservative at all and just about right TODAY. We actually SEE only 76.5% of benefits now. Taxation (at 85%) along with MEDICARE Premiums take 23.5% off the top. If you have a pension and/or enough other taxable income (including RMD's) you will pay tax on your benefits. So I would think 75% of projected benefits is a reasonable number to use. For those that say they can keep it from being taxable - I hope you are right - however, you may want to work the IRS form a few times projecting your future income expectations.
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