With stock market crash, can you still retire?

[daylatedollarshort]

For many of us, when to take SS has less of a budget impact than where we shop for groceries. We've gone over this a million times in past threads. What most people in the wait until 70 camp forget to add is a probability factor. Sure, you make more at age 70 if you wait to collect, but your probability of being alive at 70 or beyond the payback period is not 100%. That is the actuarially neutral part. Yes, if you live to be 110 you will likely to come out ahead if you wait to collect, but there is also a higher probability you will collect $0 if you wait until 70 because you might be dead.


Checkbook.org says a household can save up to $3K a year just by changing where they grocery shop in our area, so factors like that have more of an impact on a retirement budget than when to collect SS. Saving $3K a year at 4% over 40 years comes out to over $300K.

[Sunset]

Quote:

Originally Posted by daylatedollarshort For many of us, when to take SS has less of a budget impact than where we shop for groceries. We've gone over this a million times in past threads. What most people in the wait until 70 camp forget to add is a probability factor. Sure, you make more at age 70 if you wait to collect, but your probability of being alive at 70 or beyond the payback period is not 100%. That is the actuarially neutral part. Yes, if you live to be 110 you will likely to come out ahead if you wait to collect, but there is also a higher probability you will collect $0 if you wait until 70 because you might be dead. Checkbook.org says a household can save up to $3K a year just by changing where they grocery shop in our area, so factors like that have more of an impact on a retirement budget than when to collect SS. Saving $3K a year at 4% over 40 years comes out to over $300K.

Everybody does what they are forced to do or are comfortable with doing...

Myself, I'll wait to age 70 (or at least DW will), if I die before I collect SS, then I won't miss it.
Actually you only need to live to 83 not 110 to come out ahead by delaying SS.

Someone can save a lot by eating cheap, also, don't own a car and just walk to the grocery store will save ~$5K per year. Don't travel, just watch free tv and one can save over $10K per year. But all these issues are separate from SS and mixing them in is adding red herrings to the discussion.

[daylatedollarshort]

Quote:

Originally Posted by Sunset Everybody does what they are forced to do or are comfortable with doing... Myself, I'll wait to age 70 (or at least DW will), if I die before I collect SS, then I won't miss it. Actually you only need to live to 83 not 110 to come out ahead by delaying SS. Someone can save a lot by eating cheap, also, don't own a car and just walk to the grocery store will save ~$5K per year. Don't travel, just watch free tv and one can save over $10K per year. But all these issues are separate from SS and mixing them in is adding red herrings to the discussion.

The checkbook.org food basket compared identical groceries from store to store, so it is not eating cheap, just paying less for the same food.

According to the Society of Actuaries, a 65-year-old male today, in average health, has a 55% probability of living to age 85. You might not miss the money if you are dead, but for those of us who want to leave money to family it is a key consideration on when to take SS. - https://www.rate.com/research/news/r...ent-expectancy.

This discussion is on can you still retire with the stock market crash, not when to take SS. Yes, I can still stay retired, in large part because I don't overpay for good and services, like groceries.

[Exchme]

Quote:

Originally Posted by TripleLindy ... The 8 year loss of SS income isn’t insignificant and I believe the survivor benefit is lower, which impacts the EITHER equation for us, as my wife quit working outside of the home once our first child was born so she has no SS benefits.... I believe that we’ll be able to defer SS for however long we want to, but will still go through a detailed analysis to determine the best option for us. I’m certainly no expert, as I don’t have to even think about it for several years, but I’ll be gaining knowledge as the time approaches.

You mentioned survivor benefits. Since you haven't claimed, the maximum survivor benefit if you pass away early is the PIA amount (benefit at your full retirement age). It derates if she claims early, though it uses a different schedule than regular benefits and will reach the maximum benefit at 66 yrs 8 months. If you make it past FRA, then the scheme changes and she gets what you would have gotten if you claimed on your last day, (or what you actually got if you have claimed).

The whole thing is quite complicated, the best site I've seen for examining claiming strategies is opensocialsecurity.com. In addition to the standard defaults, you can select life expectancy, discount rates, etc.

[street]

I would take a wild guess and say that most here could live a long life without SS. I would also say most here could live the same lifestyle regardless of SS.

So, if one spouse passes away there still would be more than enough for that person to carry on the same lifestyle after one pass away.

[aja8888]

Quote:

Originally Posted by street I would take a wild guess and say that most here could live a long life without SS. I would also say most here could live the same lifestyle regardless of SS. So, if one spouse passes away there still would be more than enough for that person to carry on the same lifestyle after one pass away.

Yes, that's our plan. But we are running out of forward years! Too bad one can't just add some!

[street]

Quote:

Originally Posted by aja8888 Yes, that's our plan. But we are running out of forward years! Too bad one can't just add some!

So True aja8888!!

A believe as humans we try to outguess life and put too much into trying to over think much in life. We want to squeeze every penny we can but in the end that plan might not work.

I'm not going to try to guess I'm going to live to be 75 or 100 years of age. Whatever decision that is made for SS may work for your advantage but then maybe not.

[aja8888]

Quote:

Originally Posted by street [/B] So True aja8888!! A believe as humans we try to outguess life and put too much into trying to over think much in life. We want to squeeze every penny we can but in the end that plan might not work. I'm not going to try to guess I'm going to live to be 75 or 100 years of age. Whatever decision that is made for SS may work for your advantage but then maybe not.

Street, I'm finding out after 79 years of life that having enough money for the remainder of my years is not on the forefront of importance as other priorities that are opening up in front of my eyes as I get older. I have been to way too many funerals already and I have a DW that's not in great health.

I know this thread is about money (as many are here), but it's only one part of retirement that's important.

[NW-Bound]

There have been more posters here who ran out of life before they ran out of money.

"And that's all I have to say about that" -- Forest Gump

[harllee]

Quote:

Originally Posted by NW-Bound There have been more posters here who ran out of life before they ran out of money. "And that's all I have to say about that" -- Forest Gump

I wonder if we have ever had any posters on this Forum who actually ran out of money? I can't remember any. A few have gone back to work but I don't think it was because they were running out of money.

[street]

Quote:

Originally Posted by aja8888 Street, I'm finding out after 79 years of life that having enough money for the remainder of my years is not on the forefront of importance as other priorities that are opening up in front of my eyes as I get older. I have been to way too many funerals already and I have a DW that's not in great health. I know this thread is about money (as many are here), but it's only one part of retirement that's important.

You got that right!!!
The old I get the less I'm concerned about money. Even if I had just enough to live, I would be good with that. My attitude towards money has changed but still want to preserve and sustain what I worked so hard for. What I stopped doing as I have aged is not worried, about how things are going to get paid and if I will enough to the end point. Trying to make a few more dollars by taking SS and trying to guess what is best. I learned to just live and be thankful I'm healthy today and can still do the things I love to do in live. It's just money.

[JoeWras]

Most posters just disappear with status unknown. Hard to know what happened. We've had a few families come on an announce someone's passing. But I'm gonna guess if someone runs out, they may not care about posting here anymore - or may not even have the means.

[NW-Bound]

Quote:

Originally Posted by harllee I wonder if we have ever had any posters on this Forum who actually ran out of money? I can't remember any. A few have gone back to work but I don't think it was because they were running out of money.

You have not been here long enough. I remember at least two who voiced their financial worries, then disappeared. There have been a lot more than two who died.

There are of course a lot more who stopped posting for various reasons. But I think people who start to have financial difficulties tend to ask for advice here on this forum.

In contrast, people with health problems do not expect better help from forum fellows than from their doctors. They often just hinted of a problem, then faded away. I missed many of them.

[Unpaintedhuffhines]

I’m retiring on Friday of this week. Portfolio is down ~1.1M from the height, but my thinking is that this is the very best time to retire. I don’t need ALL of my money, just a little bit every month, and I am confident the market will recover long before I need the vast majority of my $.

[steelyman]

Quote:

Originally Posted by Unpaintedhuffhines I’m retiring on Friday of this week. Portfolio is down ~1.1M from the height, but my thinking is that this is the very best time to retire. I don’t need ALL of my money, just a little bit every month, and I am confident the market will recover long before I need the vast majority of my $.

That’s good. I’m taking mine out the same way I put it in: very slowly.

[finnski1]

Quote:

Originally Posted by daylatedollarshort The checkbook.org food basket compared identical groceries from store to store, so it is not eating cheap, just paying less for the same food. According to the Society of Actuaries, a 65-year-old male today, in average health, has a 55% probability of living to age 85. You might not miss the money if you are dead, but for those of us who want to leave money to family it is a key consideration on when to take SS. - https://www.rate.com/research/news/r...ent-expectancy. This discussion is on can you still retire with the stock market crash, not when to take SS. Yes, I can still stay retired, in large part because I don't overpay for good and services, like groceries.

Quote:

Originally Posted by daylatedollarshort For many of us, when to take SS has less of a budget impact than where we shop for groceries. We've gone over this a million times in past threads. What most people in the wait until 70 camp forget to add is a probability factor. Sure, you make more at age 70 if you wait to collect, but your probability of being alive at 70 or beyond the payback period is not 100%. That is the actuarially neutral part. Yes, if you live to be 110 you will likely to come out ahead if you wait to collect, but there is also a higher probability you will collect $0 if you wait until 70 because you might be dead. Checkbook.org says a household can save up to $3K a year just by changing where they grocery shop in our area, so factors like that have more of an impact on a retirement budget than when to collect SS. Saving $3K a year at 4% over 40 years comes out to over $300K.

I'm pretty sure that most of us waiting to 70 are well aware of our possible demise. The payback for waiting from 62 to 70 is 82.5 not 110.
DW and I have no heirs. Our SS benefits are very similar so no big change in survivors total benefit. Waiting to 70 makes sense for us.

[cyber888]

Quote:

Originally Posted by Unpaintedhuffhines I’m retiring on Friday of this week. Portfolio is down ~1.1M from the height, but my thinking is that this is the very best time to retire. I don’t need ALL of my money, just a little bit every month, and I am confident the market will recover long before I need the vast majority of my $.

Down 1.1M ? well, I guess you have a lot more if that represents only 20%, so no problem.

[TripleLindy]

Quote:

Originally Posted by finnski1 The payback for waiting from 62 to 70 is 82.5 not 110.

Another great stat! I’ve only recently discovered this site, so forgive me if I’m rehashing material that’s been discussed ad nauseam. I’ll dig in deeper as the decision date approaches. Since we’re relatively young from a retirement perspective, I’m sure we’re fine financially (Vanguard shows 97% probability of portfolio survival with both of us living to 100 - highly unlikely) but next year I’ll start tapping into our retirement savings for the first time and it’s a bit scary. But what I’m reading here is that time is the real currency that I should be considering.

[daylatedollarshort]

Quote:

Originally Posted by finnski1 I'm pretty sure that most of us waiting to 70 are well aware of our possible demise. The payback for waiting from 62 to 70 is 82.5 not 110. DW and I have no heirs. Our SS benefits are very similar so no big change in survivors total benefit. Waiting to 70 makes sense for us.

I didn't say the payback period was 110. I said people living to 110 would have a huge difference in benefits by deferring. Conversely, the people who die before 70 will have a big difference in their estate by claiming early, because otherwise their benefits would have been $0. You have around a 50% chance of being dead before the payback period, which isn't a coincidence, it is the actuarially neutral part in action.

You might be aware of your possible demise, but the math is presented time and time again here about coming out ahead just because one is going to, or has waited to age 70 to claim, without factoring in the probability of future mortality, the draw down of the portfolio in the meantime, or the lost opportunity cost of investing the early SS benefits. Even many if not most articles on when to claim Social Security omit mortality probabilities, let alone other factors like the looming trust fund issues or possible future tax changes. I ran the numbers for an average benefit couple through opensocialsecurity.com awhile back and there just wasn't that much difference in total benefits at the different ages.

[Hank]

Quote:

Originally Posted by BackHometown Because I was greedy or too eager to grow the asset, I have invested all the 401k/IRA in QQQ, which dropped a lot (20% or around $500k)

Maybe you made some money on the way up?! Doesn't that count?


I would unload the QQQ and either put all of in VTI or the global Vanguard worldwide equity fund. Even if you you lost 20% of your pile I would move it to a more forgiving allocation. But that's just me.