Firecalc Revisited for the Social Security entry

[MJ]

I thought I had it right but now I am questioning my understanding.

The Web SSA calculator shows that in 8 years, I will receive approx., either $22k in today's dollars or $30k in future dollars.

I have been using the future dollar amount as described in the posting below but I read other threads writing that I should use "today's dollars" even though I would not be collecting for another 8 years

Now, if your retirement is in 20 years then the "today" that FIRECalc starts with is 20 years in the future. Then you want to enter some inflation (or wage increase adjusted) SS estimate for 20 years from now.

versus

Quest. #1:
For S.S., when it says "uses inflation adjusted dollars", how should I interpret that?

For example, if I knew that my annual S.S. benefit in TODAY'S dollars was $10,000, but would not actually draw it till year 12, what does it do? Does it take the $10,000 TODAY, adjust UPWARDS for whatever inflation was in the respective 12 year period in the model, and use that as the starting amount for drawing S.S? Does it do that?

The answer was Yes.

so which needs to be inputed if you are planning to receive SS payments in the future, today's or future dollars?

 

[Martha]

Today's dollars. The calculator makes the inflation adjustment.

 

[MJ]

Today's dollars. The calculator makes the inflation adjustment.

Perhaps, I also misunderstood the entry of my non-cola company pension of $12k which will kick in 7 years.

I have been unchecking the inflation adjusted box and entering $9k which I calculate is today's dollar value of my fixed $12k pension in 7 years.

 

[Cb]

Perhaps, I also misunderstood the entry of my non-cola company pension of $12k which will kick in 7 years.

I have been unchecking the inflation adjusted box and entering $9k which I calculate is today's dollar value of my fixed $12k pension in 7 years.

I believe that's a mistake, and you ought to enter the 12K figure along with the number of years until it begins...Dory, do I have that right?

Cb

 

[MJ]

I believe that's a mistake, and you ought to enter the 12K figure along with the number of years until it begins...Dory, do I have that right?

Cb

I hope you're right, since I have been overstating my SS payments by $8k. I would nice if I can at least recoup $3.5k even if it is a non-cola amount.

 

[dory36]

Enter everything in today's dollars.

Every year (in FIRECalc's simulation), every figure that is affected by inflation is increased by the CPI or PPI, so that the figure will be where it should be in 5, 12, or 20 years.

 

[MJ]

Luckily my numbers had a fair amount of fat to absorb my $4.5k/annual loss mistake or I might have had to think about going back to work.

Thanks all.

 

[dory36]

... I might have had to think about going back to work.

Thanks all.

We're going to let it slide this time, but please try to refrain from using such language on the forum in the future.

 

[MJ]

We're going to let it slide this time, but please try to refrain from using such language on the forum in the future.

You know I subscribe to the Maynard G Krebs philosophy and begin to get the shakes just thinking about that 4 letter word, let alone actually communicating it.