What percentage of your retirement income is Social Security?

[SecondAttempt]

so far, zero.

As clarification, you asked retirement income. Is that what you want to know, or is it retirement annual spending or retirement annual budget. Most here do not spend all their income.

Thanks for the responses so far!

Sorry, I was not clear.

I went to a retirement planning seminar (not in any way a sales pitch, put on by a retiree from my company and very well done). He mentioned that Social Security was never meant to provide all retirement income but rather X % of retirement income and he noted that that number is pretty close to what the average amount for retirees is now. I'll tell you the actual % he gave in a few days.

He speciifically said "income" but included investment returns and withdrawals and one source of income, pensions being the other.

So I guess given that net income=expenses by definition for a retiree, % of expense would give the same answer. (If your income exceeds your enpenses that excess just goes back into savings, right)

I'm interested in seeing if the experience of people here is close to the average and the original intent of SS. If you are not yet taking SS then I would say it does not make sense to answer unless you want to report what you plan it to be.

 

[Gumby]

The OP specifically included portfolio withdrawals as part of retirement income.

I saw that, but I think it is a mistake to do so. Some witdraw to support their spending, others to manage their tax burden when RMDs start, and others maybe to simply reallocate their portfolio. And then there is a situation like mine, where my portfolio withdrawals have been negative. There is little if any useful information to be gleaned from studying portfolio withdrawals compared to social security income.

 

[SecondAttempt]

I saw that, but I think it is a mistake to do so. Some witdraw to support their spending, others to manage their tax burden when RMDs start, and others maybe to simply reallocate their portfolio. And then there is a situation like mine, where my portfolio withdrawals have been negative. There is little if any useful information to be gleaned from studying portfolio withdrawals compared to social security income.

Fair points. I'm trying not to overthink this. Maybe I should have said what % of expenses. We all have expenses whether extravagant or very frugal. What % of those does SS cover? It will obviously vary depending on your stage of retirement. Early = high travel and activity costs, mid = lower costs, late = higher medical and possibly assisted living costs.

 

[TheWizard]

...So I guess given that net income=expenses by definition for a retiree, % of expense would give the same answer. (If your income exceeds your enpenses that excess just goes back into savings, right)...

Especially after starting SS two+ years ago at age 70, I now have sufficient income with my pension/annuity that I don't need to do portfolio withdrawals for routine spending.
So I have a negative withdrawal rate as some others here apparently do.

There's a mishmash of terminology if we're not careful.
At age 72 now, I have three income streams hitting my checking account each month. They all contribute to my AGI. From largest to smallest:
1) my pension/annuity
2) my SS
3) my RMD (taken as twelve equal monthly payments)

I'm not one of those who claims to be reinvesting his RMD. My records show considerably more than my gross RMD going into my taxable account settlement fund from checking each month, on average.

I actually have two more income components that I pay income tax on:
4) dividends and interest in my taxable account
5) Roth conversions (much smaller now that I'm in RMD land)

I'm planning/hoping to buy a new car next year to replace my 2008 one. I'll pay $40,000 cash for it by selling stock index funds in my taxable account. This obviously will be a Portfolio Withdrawal but will be managed so as NOT to create more taxable income. I'll quite likely have a Capital Loss on that withdrawal.

If things were different and my taxable account components all had GAINS, then I would withdraw most of the $40k from my Roth IRA instead.

Hope this clarifies things...

 

[old medic]

Nada. This is a retire EARLY forum after all

Well seems 33 are zero and 30 collecting somthing..

 

[Sunset]

Fair points. I'm trying not to overthink this. Maybe I should have said what % of expenses. We all have expenses whether extravagant or very frugal. What % of those does SS cover? It will obviously vary depending on your stage of retirement. Early = high travel and activity costs, mid = lower costs, late = higher medical and possibly assisted living costs.

Ok I'll play.

Right now it's zero, but when we collect at age 70, I estimate it will be ~50% of our spending, assuming our spending does not radically change.

 

[HarveyS]

Right now it's zero, but when we collect at age 70, I estimate it will be ~12% of our spending, assuming our spending does not radically change.

 

[steelyman]

Not getting any SS at present but when I do claim it will be subject to WEP so I’ll be happy if it covers Medicare premium.

 

[pacergal]

about 33%, pensions 67% . Planned our budget on these two income streams, with monthly extra to the savings for travel, unplanned issues, etc

Most years do not pull from IRAs, hope to keep that up until RMDs require.

 

[O2Bfree]

Nothing yet, as I retired before age 62. But if my current spending patterns hold and I take SS at 62, it'll cover 85% of my expenses.

 

[Toast]

We haven’t retired yet, but our 2 social security checks and 3 cola’d pensions will more than cover our expenses, including travel and extras.

 

[dtbach]

Roughly 33%. Pension about 25% and the remainder investments and IRA.

 

[MarieIG]

I understand how you feel.
Certain money is like cash in your wallet after all taxes have been paid. That includes your Roth IRA.
So Roth conversions count as income even though you have no need to SPEND it all this year.

Money in your tax-deferred accounts is NOT equivalent to cash in your wallet because you haven't yet paid the ransom to get it out of tax-deferred.

Hope this line of reasoning helps...

Yes!

 

[FlaMariner]

Zero now (58) and when it arrives in 4 years (62) we plan to increase the budget.

 

[Trailwalker]

Zero now (age 61). SS will add some cushion when we file sometime between 67 and 70. Too many variables to attach a percentage to it.

 

[Katsmeow]

In a sense, it depends on what I want for the year.

100% of our income is either Social Security or IRA withdrawals. For DH and I SS is collectively about $61k a year for next year.

IRA withdrawals vary depending on needed spending each year. We don't withdraw more than we plan to spend. So if we want to spend $80k then SS for that year would be 75% of income. If we wanted to spend less than that, then SS would be a greater percentage of income. If we wanted to spend more then we would withdraw more from the IRA and SS would be a lesser percentage.

 

[RobbieB]

Less than 10.

 

[SecondAttempt]

Clearly people can look at things in many different ways. In my simple view of things, if you get $3000 per month from SS, $5000 from pensions, and $1500 of investment income ($9500 total income) but your expenses are $6000 a month then you have $3500 a month that you don't need. You can either blow it, or maybe give it to you son to maintain his bride, or you can choose not to withdraw it. If you blow it, your expenses go up to $9500. If you choose not to withdraw it then your expenses stay at $6000 and so does your total income. The point is, in my view, once you are retired expense == income. And in that case the percentage could be either 50% ($3000/$6000) or 31.5% ($3000/$9500)

In any case, I'll cut to the chase. Supposedly SS was designed to provide about 40% of retirement income and that is pretty close to the average in the US.

 

[Irishgirlyc58]

My social security amount is reduced due to WEP and is approximately 13% of my monthly income. Remaining 87% is from my pension.
457b account for unplanned emergencies.

 

[RobbieB]

It's a pretty simple and easy question.

Just look at your last tax return and that should answer "what percentage of your income is from SS"

 

[TheWizard]

It's a pretty simple and easy question.

Just look at your last tax return and that should answer "what percentage of your income is from SS"

That's basically what I did, correcting for the 85% factor on SS...

 

[TheWizard]

Clearly people can look at things in many different ways. In my simple view of things, if you get $3000 per month from SS, $5000 from pensions, and $1500 of investment income ($9500 total income) but your expenses are $6000 a month then you have $3500 a month that you don't need. You can either blow it, or maybe give it to you son to maintain his bride, or you can choose not to withdraw it...

Except with my RMD, I can't choose not to withdraw it.

More broadly, I think we should get away from the "living paycheck to paycheck" mentality in retirement. Many of us have excess retirement income which we can effectively accumulate in our bank account with an eye to possible future spending.

When I spend $50,000 for a new car next year, on top of my other expenses, that doesn't mean my income for that year was $50,000 higher than the year before...

 

[gayl]

It's 100% of my savings but 0% of my monthly spending

 

[Sue J]

My SS benefit is 15% of our income. Our expenses are currently covered by DHs COLAed pension, so my SS goes into savings.

 

[RaySharpton]

37% pension, 63% Social Security, and not using 403b account except for mandatory first year RMD of $7,000 for 2022. I do have a large amount in my checking account. I am happy about my emergency hospital bills taken care of since I bought the Plan F Medicare Suppliment insurance before it was discontinued for new clients a couple of years ago.. I waited until I was 68 years old to retire. For a long time I never thought I could support myself if I retired alone with no family.