Retirees, does SS cover all your needs?

[audreyh1]

Doesn't come close. But then I have 5 years until I can take it early. I can't quite live on nothing.

Right, I forgot to mention that too for me. (besides being small amount)

Folks retiring early before 62 don’t even have the option of drawing on SS for a while.

 

[Tadpole]

My husband started collecting at age 63 and I just took age 70 benefits. Yes, those two would cover expenses, for now. However, it is more likely than not that expenses will increase more than COLA over the near future and beyond.

 

[HadEnuff]

NW you used that top pic of our home without our consent..........lol

this is awkward. that's MY home. The place is so big neither of us knew we were each sold the place, and as of yet we haven't bumped into each other.

 

[Ronstar]

SS could cover all of our needs if we downsized our housing and downshifted our lifestyle.

 

[REWahoo]

SS could cover all of our needs if we downsized our housing and downshifted our lifestyle.

+1

It could cover our needs and we could save a little every month (like my parents did) - if we didn't spend so much.

 

[Badger]

No. It is about $20k short but a few small pensions covers that. We also have no mortgage and all our medical is taken care of.


Cheers!

 

[Independent]

The better OP question could have been "If you start SS at FRA, how much of your anticipated spending will it cover?"

 

[gerntz]

Instead of being envious of his public employee pension maybe a little gratitude for those who serve others is in order.

Beyond defense of our country & emergency services/protection, I don't see public employees as "serving others" anymore than any other job.

 

[ItDontMeanAThing]

No. All my retirement planning assumed zero SS. Part of that was pessimism about future government actions, part was intentionally forcing me to have a large safety margin. SS is now my travel budget. That takes the 'ouch' out of paying for business class.

 

[Chuckanut]

Sadly, SS would only cover about 40% of our estimated expenses. What we really need is one of the those public pension plans that pay a large percentage (i.e., 80%+) of your salary for life.

You're a bit late. Many plans have gone to a hybrid system (50/50 DB/DC). Of course it varies state by state and even by the job. Public safety workers (police, fire, prison guards, etc) often get a better deal than the accountants and teachers. In my state the Golden plan (which sounds like the one you want) was closed in the 1970's. The Hybrid Plan was introduced in the 1990's.

Of course, some states have gone merrily on there way with not much thought to pension reform or even just making the required yearly payments (Illinois and Kentucky come to mind).

And then there are the states that quite legally bypassed Social Security contributions thus removing an important leg of the stool. What could possibly go wrong?

 

[Unpaintedhuffhines]

It will be about 19% of our anticipated expenses, factoring in inflation, and we're going to have a pretty good income with SS. I can't imagine living on SS alone unless we:
1. Lived in the middle of nowhere in a single wide on a busy highway
2. Never traveled to see the world
3. Grew all our own food
4. Never had any alcohol
5. Cut out all entertainment (seeing a movie, going out to eat dinner, going to museums or other cultural events).

None of those things are going to happen, much less all five.

 

[athena53]

A deacon at our church had told me that a few years ago after she retired (DH was already retired) she and her DH spent most of their savings on the trip if a lifetime and were doing OK on just SS. Her DH had a stroke in the following year so maybe it was a good decision to make the trip, but... today she told me that she needs to get her car windshield fixed because it's unsafe to drive but has to wait till she has the money. Wow.

I don't even want to think what will happen when one of them dies and the SS is reduced by 1/3.

 

[unclemick]

Sure, it is more than enough now that we moved under a bridge and keep our possessions in an old grocery cart.

Or start ER in the Louisiana swamp - no property tax, no utilities except electricity(no AC), no medical or other silly insurance. 12 k all time best low expenses in 1993 $ with 18k an early average.

Now with time and events of life in ER, SS is ballpark 30.894% as of last year before taxes.

Now could we if necessary cut expenses to live on his and her SS ?

heh heh heh - would NOT be fun but I believe it could be done. It's not bragging if you are a true believer in Agile, Mobile and Hostile. 25 years of ER and counting.

Go Huskies, Go Saint's

 

[bada bing]

SS could cover all of our needs if we downsized our housing and downshifted our lifestyle.

That is where my estimates put my SS. I don't intend to take it until age 70 in
2029. I have almost maxed my 35 year record and my annual SS is slated to
be ~$40K + inflation in 2029. That may very well be trimmed by funding
shortfalls to ~$32K per year (or ).

Could I live on $32K per year ? Sure
Do I want to live on $32K per year ? nope

The original intention of SS was to replace ~40% of a workers earnings, on
average. It replaces more than 40% of a low earner and less than 40% of a
high earner. In my case, SS will replace about 15% of my final career yearly
salary *if* I wait 9 years of ER to start it. So anyway you crunch the numbers, it
is going to take some frugality compared to your working years to get by on
SS alone.

To the OP: The math behind SS benefit calculations are a bit of a puzzle, but
worth the exercise to figure out if you're truly interested in what your individual
outcome could be. Just don't depend 100% on what you calculate, because it
is certain that things will change.

 

[Souschef]

The whole idea was a 3 legged stool in retirerment. The three legs were SS, pension, and investments.
Well, pensions are going by the wayside, and many people have little saved.
Here is our "trailer down by the river". It is a manufactured home, near the Santa Clara River. And it's paid for

 

[FANOFJESUS]

It covers most daily expenses. A new roof or another used car no.

 

[FIREd]

At present, it would cover my needs but not my wants.

 

[Cessna152]

Excluding health care premiums, our average monthly expenses over the last 4 years prior to retirement was $5759. Those expenses do include medical and health costs not covered by insurance (high deductible, so my periodic visits to a doctor for a chronic condition add up to several hundred a month.)


If we take SS @ age 70, one of us will draw $3088/mo and the other $2811/mo. The math (5899 > 5759) indicates that, excluding supplemental Medicare insurance costs, we'd be pretty dang close to covering the costs of our modest lifestyle indefinitely almost entirely on SS so long as we are both alive.

 

[pb4uski]

I think the more relevant way to frame the question is not how much SS covers of one's spending but how much of one's necessities it covers. We could live reasonably well on SS... we would have a roof over our heads and food on the table and that's is all it was really intended to do.

IOW, in the title thread put emphasis on "needs".

I just remembered that I had a budget that segregates essential expenses from optional expenses. It looks like SS would cover about 75% of our essential expenses.... a part of that is because DW, who was a SAHM, gets a spousal benefit so we'll get 150% of my PIA. If I look at it based on just our aggregate PIAs, it is more like 65%. In both cases I am assuming that we start collecting at FRA.

If I wait until 70 and she waits until her FRA that 75% increases to 91%

 

[NW-Bound]

NW you used that top pic of our home without our consent..........lol

this is awkward. that's MY home. The place is so big neither of us knew we were each sold the place, and as of yet we haven't bumped into each other.

Sorry to put photo of your homes on the Web (it is now just a McMansion that a developer built several on a street, and you two are neighbors but have not talked to one another).

As for me, I looked at the home of needs in the photo below that, and thought to myself "I would turn the home around so that a solar panel on top works better with direct sunlight". Didn't you notice that it is on caster wheels?

PS. That roof area can support more than 500W of solar panels, which is what you need to run the smallest window AC. See, you can live small, but still have comfort.

 

[pb4uski]

The whole idea was a 3 legged stool in retirerment. The three legs were SS, pension, and investments.
Well, pensions are going by the wayside, and many people have little saved.
Here is our "trailer down by the river". It is a manufactured home, near the Santa Clara River. And it's paid for

Very nice... would work for me. We have a few friends with manufactured retirement homes... and all are very nice.

I would pick a bone with you on the first part though... in my view pensions didn't necessarily go by the wayside... they just morphed into 401k matches and DC company contributions.

My next to last employer had a defined benefit pension and a 401k with a match. My last employer had a 401k with a match and a defined contribution plan where they contributed an amount equal to 8% of my earnings to a non-contributory 401k-like investment (I chose how it was invested).

To me the DC plan was similar except it laid the investment risk on me rather than the pension plan.

IMO the reality of the problem is that as defined benefit plans dwindled and were curtailed, 401ks and DC plans emerged... we were all told of the need to save because the pension leg of the stool was crumbling... but many chose not to save and are paying the consequences now.

 

[NW-Bound]

The megacorp I worked for had both pensions AND 401k with 50% matching. And on good years, they had bonuses for everybody, which was a bit more than 1 week of pay.

How the heck did I leave that place?

 

[Spanky]

You're a bit late. Many plans have gone to a hybrid system (50/50 DB/DC). Of course it varies state by state and even by the job. Public safety workers (police, fire, prison guards, etc) often get a better deal than the accountants and teachers. In my state the Golden plan (which sounds like the one you want) was closed in the 1970's. The Hybrid Plan was introduced in the 1990's.

Of course, some states have gone merrily on there way with not much thought to pension reform or even just making the required yearly payments (Illinois and Kentucky come to mind).

And then there are the states that quite legally bypassed Social Security contributions thus removing an important leg of the stool. What could possibly go wrong?

Agreed - it's too late. The good old days of a public or private defined pension are falling on the way side. If still exist, they are not as generous as those of yesteryears. Both sectors, public and private, are making significant strives in reducing retirement benefits. Let's hope that SS benefits and medicare will continue for a long time without any reductions. Thanks for the update.

 

[target2019]

Here is what SS (2) and pension will provide to cover expenses:
35% - SS mine
25% - SS spouse
40% - pension

Will need to take something from investments to supplement, as the spouse SS is a bit high, being calculated from spouse FRA (not spousal).

 

[albireo13]

Haven't retired yet but looks like, wife and I taking SS at FRA, SS will cover 50%
of our budget