SS as a %age of your income

What percentage of your expenses will SS cover

  • 0-25%

    Votes: 55 42.6%

  • 25-50%

    Votes: 49 38.0%

  • 50-75%

    Votes: 13 10.1%

  • 75-100%

    Votes: 12 9.3%

  • over 100%

    Votes: 0 0.0%
  • Total voters
    129
Gumby said:
The prediction I just got from the SSA says I should get slightly over $28k per year, but I don't believe a word of it. For the last 20 years, my retirement plans have assumed that I will get zero from Social Security.
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My approach as well. Assume nothing from SS and hopefully be pleasantly surprised.
 
LARS said:
Gee, I hate to be the negative guy on this thread, but I am assuming in the next ten years or so Congress will get around to means testing SS recipients. My best guess is that SS will be phased out for anyone with over $100,000 income. Perhaps offset will be you can withdraw from IRSs/401ks tax-free to make up for "stealing" earlier contributions.
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Do you mean $100,000 income from other sources during retirement or do you mean the person earned more than $100,000 a year while working?

If the former, how do you determine the $100,000? Is that based upon AGI the prior year? What if the person has a single year of $100,000 income...does that person never get SS again?

If you mean the latter, it seems sort of unfair for people at or near retirement age who built their retirement plans around SS. Also what if the person worked 35 years and made over $100,000 only 1 year. Does that mean no SS?
 
Katsmeow said:
Do you mean $100,000 income from other sources during retirement or do you mean the person earned more than $100,000 a year while working?

If the former, how do you determine the $100,000? Is that based upon AGI the prior year? What if the person has a single year of $100,000 income...does that person never get SS again?

If you mean the former, it seems sort of unfair for people at or near retirement age who built their retirement plans around SS. Also what if the person worked 35 years and made over $100,000 only 1 year. Does that mean no SS?
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I am assuming "current" income. How that will be determined, I haven't the foggiest. You raise a good point on up and down income levels in retirement. Also, what if you put all your capital in stocks and manage your "income"? Presumably, some Congressional staffer too smart by half will come up with some rediculous formula.

Still, I'm just fairly confident something has to be done on the SS front, and going after citizens with money is usually somewhere in the answer.
 
We have never looked at SS as any kind of percentage of potential percentage of expenses. An interesting way to look at things, but hardly relevant to most that ER, since by definition, that makes SS very far in the future. I've been ER for 3 1/2 years now, and still 8 more before the earliest that I could draw at 62. Our most logical tentative plan would be for me to draw early and DW to draw late based on the actuary tables. She should likely outlive me by a decade or more, but obviously that's a crapshoot. We may when we get there both decide to draw early just to get something after all those years of paying in and waiting for the return. As pointed out above, changes in the laws may help us decide on the approach we take as well.

We have always looked at SS (since if was going to occur at least 12 years after our ER) as a nice bonus if and when we get it for travel and other fun stuff, never as one of the legs of funding our FIRE. We have and will have long since got used to living within our means without taking it into consideration. It's pure gravy when we get old enough to qualify. COOL! ;)
 
LARS said:
My approach as well. Assume nothing from SS and hopefully be pleasantly surprised.
Click to expand...

That's like saying assume nothing from your 401k, IRAs etc. While SS will definitely change before I reach 62 (I'm 48 now) I believe it to be at least as good a bet as my retirement accounts, so I always include it in my projections. Doing that brings my ER date closer by reducing the net worth I'll need to comfortably ER. I look at it like this, if you don't have some faith in the US Government to honor its obligations you'd better sell all those TIPS and I-Bonds too. I'd love to hear where the idea that SS should not be included in retirement projections came from.......
 
nun said:
That's like saying assume nothing from your 401k, IRAs etc. While SS will definitely change before I reach 62 (I'm 48 now) I believe it to be at least as good a bet as my retirement accounts, so I always include it in my projections. Doing that brings my ER date closer by reducing the net worth I'll need to comfortably ER. I look at it like this, if you don't have some faith in the US Government to honor its obligations you'd better sell all those TIPS and I-Bonds too. I'd love to hear where the idea that SS should not be included in retirement projections came from.......
Click to expand...

I agree and have always put SS projections into my ER plan. I would not be surprised if SS payments became taxable for high income individuals but I don't see the government defaulting on the payments. If I had taxable income of $100K /year at age 67 then paying tax on SS income is not not going to destroy my lifestyle.
 
SS has always been part of my plans. Knowing that I won't need it for basic subsistence is even better, because it has allowed me considerable peace of mind. I have no mortgage so hopefully my retirement income will not trigger future possible high-income taxes on my SS.
 
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Alan said:
I agree and have always put SS projections into my ER plan. I would not be surprised if SS payments became taxable for high income individuals but I don't see the government defaulting on the payments. If I had taxable income of $100K /year at age 67 then paying tax on SS income is not not going to destroy my lifestyle.
Click to expand...

SS is taxable if your modified gross income is above a certain level. In 2008 for a single person if half your SS income added to all your other income is less than $25k your SS is not taxed.
 
Is our combined projected annual SS total of $38,688 close to what others are seeing?
 
TromboneAl said:
Is our combined projected annual SS total of $38,688 close to what others are seeing?
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I'm single and my projection is $14k from SS at 62 (I've worked in Government service for a while so I won't get as much SS as many). I look at this as having an extra $250k in my retirement account.
 
I agree with JonnyM's approach. ER'd at 52 in 2002 with the expectation of collecting SS at 62. I'm actually looking forward to SS as a nice annual bonus. I also agree with several posters that SS will be there, albeit with possible changes in taxation levels. I seriously doubt that there could be a scenario where the Guvimmint defaults on SS payments but continues to pay on treasuries, TIPS etc. ( I may change my mind on Dec 21, 2012 but then it won't matter anywhoo :whistle:)
 
The max amount for 2009 for a person retiring at full retirement age (66) is $2,323. So a couple's max is $4646 at full retirement age. At 62, 75% of that(3484) and at 70 132%?(6133). Wow!
 
I have given some thought about SS being reduced for those with other income as well. Given that SS will become more and more strained in years to come I think the Govment will consider several options.

1. Reduce the normal SS benefit based on the amount of other income. For example, if you have $100,000 of "non earned" income during retirement your benefit may be reduced by 20%, with more of a reduction if the income is higher (pro rated).

2. Currently SS taxes are paid on "earned" income. They could start collecting SS taxes on all income regardles of source and age.

3. Remove the current ceiling on the amount of earned income that subject to the SS tax.

I really think that all three of these options, in come combination and to some degree, will be implemented withing the next 10 years or so.

I have no basis in fact for the above narritive, just my feeble mind doing "what ifs".

I think that SS, in its present form, should provide 25% or less of my retirement income at 62. I'm currently 55 and expect to ER prior to 57....maybe....might be 58...:whistle:
 
nun said:
SS is taxable if your modified gross income is above a certain level. In 2008 for a single person if half your SS income added to all your other income is less than $25k your SS is not taxed.
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Is this not earned income? If you have earned income you are paying FICA and increasing the amount of SS you will get at full retirement age.

I was saying that I wouldn't be surprised if they started taxing SS on folks who have large sums ( eg >$100K) of unearned income.
 
It is more than earned income from the SS site:

Are Your Social Security Benefits Taxable?

  • First, add one–half of the total social security you received to all your other income, including any tax exempt interest and other exclusions from income.
  • Then, compare this total to the base amount for your filing status. If the total is more than your base amount, some of your benefits may be taxable.
 
I'm supposed to get 18K/yr at 62 but don't expect to see it.

Govt doesn't need to reduce the promised amount, and doesn't need to tax it further - just make me pay more for medicare, and take the medicare payment out of the SS check - I'm hoping to net five hundred a month.
 
The more that I think about it, my guess is that someone over a certain income level (say the $100,000) will get their SS payment as promised. However, it will be taxed at 90 % to make it virtually irrelevant.

So I agree the Government won't renege on the obligation, just tax it away...
 
I checked 0%-25% simply because I plan on SS being 0% of our expenses.
In 25 years (when I would qualify for it) I don't expect it to be there. We will either be means tested out of it, or it will be marginalized in some other way.
If we do receive any, it will be gravy and most likely donated.
 
I haven't locked down my retirement budget yet, haven't decided where to live or if I will have a mortgage or what medical will cost.

Assuming I can live on 35K a year and SS is 18K, roommate pays 7K that leaves 10K from investments. I will retire when my portfolio reaches 500K. So SS is more than half my expenses but not more than half of my income.

I want my portfolio to grow so that later in retirement if my roommate dies or something needs replaced I won't be in trouble. I don't want to take out more than 2% until I am over 75.
 
LARS said:
The more that I think about it, my guess is that someone over a certain income level (say the $100,000) will get their SS payment as promised. However, it will be taxed at 90 % to make it virtually irrelevant.

So I agree the Government won't renege on the obligation, just tax it away...
Click to expand...

That seems fair
 
LARS said:
The more that I think about it, my guess is that someone over a certain income level (say the $100,000) will get their SS payment as promised. However, it will be taxed at 90 % to make it virtually irrelevant.

So I agree the Government won't renege on the obligation, just tax it away...
Click to expand...

As well as taxing high income people they could also start taxing high net worth people like some European countries. Wealth Tax

I probably heard it on this forum but once we reach maximum numbers of retirees, discussions on how to fund SS will be like 2 wolves and a sheep voting on what to have for lunch.
 
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