SS calculations/FIRECalc question

[Sheryl]

I've been looking at the FIRECalc calculator again lately.* *I am sort of confused by this statement:

"Presumably, you'll need to take a bit less out each year when you start drawing Social Security. Reduce withdrawal by $___.... Uses inflation-adjusted dollars. "

Maybe it's just semantics, but does this mean it wants me to put in a dollar amount adjusted for inflation up to the date I will start drawing social security, or that the claculator will do it for me if I give it today's dollars?

To make matters worse, I don't know what the SS statement I get in the mail is telling me - it says if I stop working at age 62 my payement would be $1,266 per month - is that today's dollars or the dollars I will be getting in 17 years

Help!

[moretolife]

I agree that the SS statement isn't specific. I just finished reading about ER at 62. If I retire at 57, will my SS stay at the statement amounts? (My highest earnings are this year leading back to dropping off some part time work while in college.) I have more questions now than ever before. Any suggestions?

[Martha]

Originally Posted by Sheryl

I've been looking at the FIRECalc calculator again lately. I am sort of confused by this statement:

"Presumably, you'll need to take a bit less out each year when you start drawing Social Security. Reduce withdrawal by $___.... Uses inflation-adjusted dollars. "

Maybe it's just semantics, but does this mean it wants me to put in a dollar amount adjusted for inflation up to the date I will start drawing social security, or that the claculator will do it for me if I give it today's dollars?

Put in today's dollars. The calculator figures out the inflation.

To make matters worse, I don't know what the SS statement I get in the mail is telling me - it says if I stop working at age 62 my payement would be $1,266 per month - is that today's dollars or the dollars I will be getting in 17 years

Help!

The SS statement number has today's dollars. The amount you would get if you were 62 and retired today. If you want, you can multiply that number by 12 and put the total in the FIREcalc calculator.

If you retire before 62, you will have years where you have no earnings. This will make the SS estimate on the statement incorrect. You will have to use the calculator on the SS website to figure out what you might get when you reach 62. www.ssa.gov.

[Sheryl]

Thanks Martha - It's a relief to have that confirmed.* *What you describe is what I have been doing up until now - but everything seems to be working out too well, so I thought there must be something wrong.* * However, I have been accounting for the years of not working with a random SWAG reduction - it's time to run the full cacluator.
*

*Things are starting to look pretty good here for hitting the (3rd revision of the) ER target number in a year or so.* *

[Cb]

You can also go to the SSA website and request a special SS income projection based on quitting at any age. It'll come in the mail 2-3 weeks after your request.

FWIW, I reduce those numbers by 25% in the expectation that benefits will be reduced somewhat over the next ~16 - 17 years.

Cb

[SteveR]

Originally Posted by Sheryl

... However, I have been accounting for the years of not working with a random SWAG reduction - it's time to run the full cacluator.
*

*Things are starting to look pretty good here for hitting the (3rd revision of the) ER target number in a year or so.* *

SWAG is fine for your initial looks at ER but fine-tuning may be required if you are pretty close to matching expenses and income. If you don't have some upside to income or some downside to expenses you can switch on and off as needed you may either run out of money too soon or you may work too long saving more than you need. Obviously, the worse of the two situations is how you view it yourself.

Over analysis can be almost as bad as none at all. Some here call it Analysis Paralysis. This is running the numbers over and over but never finding the "amount" you need to ER and consequently, never getting to ER.

By all means do your homework and check it over a few times to make sure you have found all the Starbucks Lattes and other things you may waste spend money on that will need to be accounted for in your expenses.

When you determine your income stream=expenses + inflation + safety factor then you hve your number. The rest is getting the $$$. Once you have it...retire.

[Sheryl]

Good summary Steve. We're actually in fine shape even without SS. I think. SO is very conservative. (per my reference to the third and latest target goal).

I've budgeted about 20% more than we plan to spend (including big allowances for travel, home remodel and capital purchases/replacements) and plugged in several other factors of safety, not included any expectation of inheritance (its very likely there will be something) and we're still getting 100% safe numbers, with this latest target.

When I include the fact that we don't plan to fully ER but ,may be tinkering with real estate a bit... it looks even more comfortable.

We should hit that latest goal number by sometime next year (stock market willing). There's not too much keeping us from quitting but the sheer joy of work. :P

[Nords]

OK, Sheryl, I gotta ask-- where's the avatar's dive site?

[Sheryl]

You caught me - it's actually just stolen borrowed from the NOAA website.* Just liked the look.

Here's one that's from Utila where I dove last year, if you want something more authentic:

[Nords]

Originally Posted by Sheryl

Here's one that's from Utila where I dove last year

Thanks, I had to look that one up. Where did you stay, what time of year would you recommend, and how were the mosquitos?

Oh yeah, how was the diving?

[Sheryl]

I stayed at the Mango Inn - and Dove with Utila Dive Center. Utila is the poor step-child of the much more glamourous Roatan Island. That will probably be my next trip, but I loved the non-touristy atmosphere of Utila.

I was there in February last year. Bugs were bad after dark, and sand fleas (or whatever those are) were bad anytime.

But the diving was fantastic.

Utila focuses on teaching as well as just rec. dives, so if you want to pick up an advenced cert. of some sort its great. VERY reasonable prices, and personal instruction.

I got my advanced open water for $199 and had two masters with me (one in training himself) on each of the five dives.

Will send some links, but need to go back to w@$k right now.

[Nords]

Originally Posted by Sheryl

Will send some links, but need to go back to w@$k right now.* *

Excellent, thanks. We got as far as NAUI Assistant Instructor back in the '80s but I'd plain never heard of the place before. We'd basically just be interested in diving our butts off without going into triple-digit depths or having to decompress. Wrecks, reefs, & invertebrates.

Bugs, however, are a problem with spouse...

[Sheryl]

Originally Posted by Nords

Excellent, thanks.* We got as far as NAUI Assistant Instructor back in the '80s but I'd plain never heard of the place before.* We'd basically just be interested in diving our butts off without going into triple-digit depths or having to decompress.* Wrecks, reefs, & invertebrates.

Bugs, however, are a problem with spouse...

I only heard of it when I started working with people in Honduras.* I see Roatan popping up in every dive magazine, with usually a one-sentence reference to "Oh, yeah, there's also Utila."* Together with Guanaja, they are referred to as "The Bay Islands" sometimes without reference to Honduras at all.

Utila is MUCH less touristy,* a little, dare I say, grungy??* Lots of backpacker young kids wanting to learn to dive cheap.* But at least at this shop, I felt the instruction was of good quality, no shortcuts - they made me read all the books, take all the tests, etc.*

http://www.utiladivecentre.com/

They have a "deal" with the Mango Inn for cheap lodging, but it's also sort of* backpacker quality.* I paid $35 a night for a room with AC.* It was noisy at night with kids partying, and the quality was nothing near what you would expect at a US hotel or resort.* But I just wanted a cheap place to sleep.* It's still allegedly one of the nicer places on the islands.* The outdoor restaurant was enjoyable and the gardens very nicely kept.

http://www.mango-inn.com/

Your spouse might prefer the place you linked to - Laguna Beach - it sounds much more resort-ish, but I didn't see it.

As to the bugs - they only seemed bad at night, and I didn't always realize I was getting bit - I came home with a lot of bites.* *I don't know if they vary by season.

As to the diving -* I thought the reefs were equal or better in quality to what I'd seen in the Playa del Carmen area (Yucatan) not as huge as Cozumel, but with lots of fish and invertebrate life.* Not necessary to go deeper than 60-70 feet I don't think - I had to do a 100' for my advanced dive, but there was nothing any more interesting down there.* Didn't do any wrecks, and don't know if there are any of note in the area.* I mostly like reefs and fish and there were no shortages of those.

Seeing the whalesharks is one of the promised highlights of Utila, and not uncommon but we didn't find them on my particular three days there.* *They are supposed to be common September through March, I believe.

I have a collection of bad underwater photos from there.* Maybe I can get them uploaded to Photobucket one of these days.*

[Nords]

Thanks, Sheryl, we've added it to the list. Sounds a lot like Chuuk without the noise.

Originally Posted by Sheryl

I have a collection of bad underwater photos from there.* Maybe I can get them uploaded to Photobucket one of these days.*

I hear ya.