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Old 10-09-2018, 02:54 PM   #21
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It’s in The Who knows category.
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Old 10-09-2018, 03:39 PM   #22
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I seem to be in the minority here but I definitely count it in my plans. That extra $40,000/year at age 70 will be welcome.
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Old 10-09-2018, 04:35 PM   #23
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Originally Posted by Cobra9777 View Post
.... Rather, my fear is some combination of small changes, which include means-testing that could disproportionately affect people with substantial assets and/or other sources of income. Probably a slightly more politically-palatable solution.....
^^^^^ this - anyone who has another pension or money coming from the government could be dinged. I will be getting a modified Reservist pension at age 60....however, I also have had a civilian career and paid into SS with both my civilian and military earnings. Even when I was shoveling all of my Reserve income into the TSP, the US Govt took the SS deduction beforehand.

It is easy for the government to just fiddle across the board with those already getting something from the government...however, I do also have other streams of income and if push came to shove, would be able to live fairly nicely without the SS. It's just the principle of it -paying into it (double as a self-employed person) and not receiving much for it.

To the OP, I model full SS amount, reduced amount, different ages (62, 67 and 70) in FireCalc...I'm over 100% on most of my scenarios...it's when I start using 6 figure constant dollar yearly lifestyle costs that my success percentage goes below 100% - just not by much.....

BTW - love that FireCalc app....very nice.... and more conservative than many of the other calcs. I like that as it makes me realize it has a built in buffer.
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Old 10-09-2018, 04:41 PM   #24
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Just so we all understand. Are people predicting a Haircut for ALL recipients, even those who already take SS? Or just new recipients who will become eligible in the next say... 5 - 10 years?
ALL recipients, including current recipients.... cuts will be a percentage across the board from everything that I can find.
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Old 10-09-2018, 05:10 PM   #25
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I'm not predicting anything, just being prepared in case I do face as much as a 25% cut. I personally would not retire if I was counting on 100% SS for my plan to work, even if I was collecting today, even though they probably would get it. I don't use most likely case, I use worst reasonable case for planning.
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Old 10-09-2018, 05:22 PM   #26
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I don't include it in my planning, I want to be safe without it. When I was younger that was because I assumed it wouldn't be around (That's what they told us Gen Xers). Nowadays I assume it will have a 50% haircut by the time I'm taking it, and with any model I do of my spending, it is basically insignificant given my goals for when I want to retire versus how many years later it comes online.
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Old 10-09-2018, 05:46 PM   #27
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When we were planning retirement before I turned 40, I planned $0 for SS as it was too far out and uncertain.

Now that I am almost 20 years older, I am looking at SS in terms of tax torpedo planning, and right now assuming the full amount at $70. If it gets cut 23%, then I'll have less of a tax hit as it may keep me under some brackets.

I assume haircut on all recipients. Even if DH waits until 70, he'll be starting in 2025, me in 2029. So we would be ahead of a 2030 reduction, but not by much. If it's 2035 then I guess we would be recipients for a few years before an across the board cut.
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Old 10-09-2018, 05:47 PM   #28
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I'm 48, and up until 2-3 months ago I didn't factor it in to planning. But I have a non-COLA pension coming as early as age 55, and SS as early as age 62, and I recently decided to see how those fit into plans.

Wow, it makes a big difference!

And, in the worst-case scenario of blowing through all my money I have two lifetime annuities to fall back on.

So now I'm looking to ESR/downshift in the next 4-16 months and allow myself to draw up to 6% of my starting portfolio if needed (dropping to 2.8% in 6.5 years and even less in 13.5 years), but I'm really hoping to make enough to not need to.

And if things start going poorly in the first few years I can go back to full-time work, rent out rooms, eat beans and rice, etc..

The general sequences seem to indicate if you don't have poor luck early in withdrawals, then you end up with lots of "extra" money in the end, and also people tend to spend less as they age. I'm counting on being young enough to take corrective action if I retire into a big bear market.
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Old 10-09-2018, 06:11 PM   #29
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Originally Posted by deserat View Post
^^^^^ this - anyone who has another pension or money coming from the government could be dinged. I will be getting a modified Reservist pension at age 60....however, I also have had a civilian career and paid into SS with both my civilian and military earnings. Even when I was shoveling all of my Reserve income into the TSP, the US Govt took the SS deduction beforehand.

It is easy for the government to just fiddle across the board with those already getting something from the government...however, I do also have other streams of income and if push came to shove, would be able to live fairly nicely without the SS. It's just the principle of it -paying into it (double as a self-employed person) and not receiving much for it.

To the OP, I model full SS amount, reduced amount, different ages (62, 67 and 70) in FireCalc...I'm over 100% on most of my scenarios...it's when I start using 6 figure constant dollar yearly lifestyle costs that my success percentage goes below 100% - just not by much.....

BTW - love that FireCalc app....very nice.... and more conservative than many of the other calcs. I like that as it makes me realize it has a built in buffer.
I also have a Reserve pension which I’m currently collecting. So, I’m interested in knowing why you think this.

To OP: I’m 63 & DW is 61 and we plan to take SS somewhere btwn when I am 68-70 yo (was always age 70 until using Mike Piper’s SS Calculator). We include 100% of SS in our planning & retirement calculator runs because I prefer to quantify any “excess” to evaluate our confidence in our plans, instead of making an arbitrary cut on the front end. Using 100% also improves RMD planning IMO.
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Old 10-09-2018, 06:19 PM   #30
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If we believe there will be a SS haircut in the future, would that not favor starting SS early .. at 62 perhaps?
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Old 10-09-2018, 06:25 PM   #31
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Originally Posted by ShokWaveRider View Post
Just so we all understand. Are people predicting a Haircut for ALL recipients, even those who already take SS? Or just new recipients who will become eligible in the next say... 5 - 10 years?
Neither.
Funny, but no one worries about welfare, SNAP food program or Medicaid recipients having to take a "haircut"-and many of those folks have paid next to nothing for their "benefits"-unlike Seniors and their employers who have paid three, four or more decades into FICA. I don't hear fed. government/military retirees worry about pension "haircuts" (perhaps they do-but I do not know of any).

Personally, I think inflation will take care of SS and the other programs. "just crank up the (treasury) printing presses, boys!"
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Old 10-09-2018, 06:41 PM   #32
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I wouldn't have retired without some expectation of SS.

When I was 35, I assumed zero.

When I was 59, I assumed a 75% after the projected trust fund exhaustion year.

Now, when I'm 71, I'm assuming 100%.
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Old 10-09-2018, 06:51 PM   #33
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This question lends itself to a poll. Here is the last that I know of http://www.early-retirement.org/foru...ity-56869.html

There are 183 responses, sorted by age group. As expected, older people are expecting a higher percent.

The poll is 7 years old. Maybe it's time to ask exactly the same question and see how/whether opinions have changed.

Note that the poll asks for "most likely payout", not "the conservative number that you put into software".
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Old 10-09-2018, 06:52 PM   #34
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Originally Posted by brucethebroker View Post

Personally, I think inflation will take care of SS and the other programs. "just crank up the (treasury) printing presses, boys!"
Is the SS outflow limited to its funding, or is it allowed to run a deficit like the general Federal fund?

By the way, this is what the SSA has to say about the short fall. Note that the emphasis is mine. I guess we share in the blame too. We only have 2 children. My parents have 4.

Quote:
Currently, the Social Security Board of Trustees projects program cost to rise by 2035 so that taxes will be enough to pay for only 75 percent of scheduled benefits. This increase in cost results from population aging, not because we are living longer, but because birth rates dropped from three to two children per woman.
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Old 10-09-2018, 07:00 PM   #35
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Is the SS outflow limited to its funding, or is it allowed to run a deficit like the general Federal fund?

By the way, this is what the SSA has to say about the short fall. Note that the emphasis is mine. I guess we share in the blame too. We only have 2 children. My parents had 4.
I believe that Social Security is currently running an annual deficit, however, it is pulling funds from the Social Security trust fund (reserves) to make up the difference. Once that trust fund goes to zero, then benefits have to be cut to match the SS payments coming in each year, so SS can't borrow to fund additional deficits.

https://www.ssa.gov/policy/trust-funds-summary.html
That indicates that 2018 is the first year for a deficit. But I guess they don't really know until after the year has ended.
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Old 10-09-2018, 07:00 PM   #36
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If we believe there will be a SS haircut in the future, would that not favor starting SS early .. at 62 perhaps?
Depends. Maybe they would grandfather in anyone 62 or over, whether they have started SS or not. Maybe they would even it out, so that if you've been collecting from 62 until the cut, they give you a deeper cut than someone who has been deferring--I doubt this one, even though it seems fair.

I modified my spreadsheet to show an across the board 25% cut at age 70, the worst time possible for someone who defers to 70. Assuming 5% returns on investments on 2% inflation, it moved the breakeven from 84 (no cuts ever) to 90.
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Old 10-09-2018, 07:02 PM   #37
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I believe that Social Security is currently running an annual deficit, however, it is pulling funds from the Social Security trust fund (reserves) to make up the difference. Once that trust fund goes to zero, then benefits have to be cut to match the SS payments coming in each year, so SS can't borrow to fund additional deficits.

https://www.ssa.gov/policy/trust-funds-summary.html
That's what I thought. This means the SSA cannot print money.
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Old 10-09-2018, 07:13 PM   #38
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Depends. Maybe they would grandfather in anyone 62 or over, whether they have started SS or not. Maybe they would even it out, so that if you've been collecting from 62 until the cut, they give you a deeper cut than someone who has been deferring--I doubt this one, even though it seems fair. ....
Everything that I have read indicates an across-the-board cut.. as tax revenues come in a percentage of benefits scheduled to be paid will be paid. No grandfathering.
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Old 10-09-2018, 07:42 PM   #39
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Everything that I have read indicates an across-the-board cut.. as tax revenues come in a percentage of benefits scheduled to be paid will be paid. No grandfathering.
That assumes nothing is done until the trust fund runs out and something HAS to be done. It's probably the most likely scenario, but some combinations of cuts and SS tax increases could be done before then in a different way, including grandfathering, at least until/unless the trust fund runs out later.
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Old 10-09-2018, 07:42 PM   #40
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I also have a Reserve pension which I’m currently collecting. So, I’m interested in knowing why you think this.

To OP: I’m 63 & DW is 61 and we plan to take SS somewhere btwn when I am 68-70 yo (was always age 70 until using Mike Piper’s SS Calculator). We include 100% of SS in our planning & retirement calculator runs because I prefer to quantify any “excess” to evaluate our confidence in our plans, instead of making an arbitrary cut on the front end. Using 100% also improves RMD planning IMO.
We live off our Military pensions (X2) and our VA comps (X2). I have been retired/unemployed for 5 years and DW for 3. We also have some rental income so SS is not part of our plan and will be just be gravy when we are eligible. All of our pensions are COLA adjusted and healthcare is paid for so we don't really have concerns about inflation. There is always a little piece of the back of my mind that worries about the USG Solvency.

If legislatures decide to deleteriously mess with our military pensions or our VA compensations we could be in a world of hurt. We paid off our house and live on half of our income. We are saving the other half. We don't need it to be comfortable and would like to reinforce a nest egg if/when USG goes bankrupt.

Probably not a major issue to concern ourselves with but helps us sleep at night, regardless. We are certainly blessed.
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