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Old 08-10-2020, 07:26 AM   #21
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Originally Posted by ShokWaveRider View Post
SS is not free, we have all paid for it throughout our working life. The fact it is called "Social Security" does not mean it is an entitlement, it is more of an insurance policy. BUT, all games are off "IF" the insurance company is forced into bankruptcy.


Please. The federal government is a long, long, long way from that.
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Old 08-10-2020, 07:27 AM   #22
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CindyBlue, as Markola points out below, the estimates were for ~ 25% cuts to SS in 2035 if no action is taken. Now, the economic impact of COVID19, plus the effect of this Executive Order could pull that date in some, but it certainly isn't going to pull it in to March!

Rather than worry, plan. So maybe instead of that 25% cut in 2035 (again, assuming no action is taken), maybe plan for a 25% cut in 2034, or 2033 instead? If you plug that into FIRECalc, does that change your success rate significantly? I doubt that a few more years of a 25% cut will have much effect, and if it does, you might be playing things a bit too close anyhow? Regardless, you have 12 years or so to makes some adjustments.

-ERD50
So...I guess that one thing I can do to make myself feel better is figure out how to save/invest (though not sure where to put it, especially with the economy doing what it's doing!) at least 25% of my Social Security income from when I start getting it next March, until 2035, both to practice living on that reduced income and to have more backup savings.

I wasn't playing it too close that I know of when I retired last August, but just right, according to FireCalc. I had to plan with what information I had at the time. The money I have is the money I have. If the pension falls apart and/or Social Security falls apart, I will be in trouble after about ten years.

The good news is that so far, all is working out. I'd planned for a retirement budget since 2016 (with the help of all you kind people here), then practiced for a year in 2017, opening an account and depositing into it and spending from it only what I thought I'd have in retirement, and came in under budget. The spending this first year of retirement (from last August to to the end of this month) matched that practice year (coming in under budget), even with a couple of unexpected expenses.

I have to figure out how to just stop worrying.

Thank you for your advice and information...I am feeling better informed. It's the unknown that is so hard to deal with...sigh...
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Old 08-10-2020, 07:30 AM   #23
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Please. The federal government is a long, long, long way from that.
No one said it was.
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Old 08-10-2020, 07:34 AM   #24
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At the risk of sounding obvious - if eliminated, eliminate for those entering the workforce.

What to do about those who have been PRE-PAYING their entire adult lives?
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Old 08-10-2020, 07:46 AM   #25
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So...I guess that one thing I can do to make myself feel better is figure out how to save/invest (though not sure where to put it, especially with the economy doing what it's doing!) at least 25% of my Social Security income from when I start getting it next March, until 2035, both to practice living on that reduced income and to have more backup savings.

I wasn't playing it too close that I know of when I retired last August, but just right, according to FireCalc. I had to plan with what information I had at the time. The money I have is the money I have. If the pension falls apart and/or Social Security falls apart, I will be in trouble after about ten years.

The good news is that so far, all is working out. I'd planned for a retirement budget since 2016 (with the help of all you kind people here), then practiced for a year in 2017, opening an account and depositing into it and spending from it only what I thought I'd have in retirement, and came in under budget. The spending this first year of retirement (from last August to to the end of this month) matched that practice year (coming in under budget), even with a couple of unexpected expenses.

I have to figure out how to just stop worrying.

Thank you for your advice and information...I am feeling better informed. It's the unknown that is so hard to deal with...sigh...
Based on the fact you budgeted and your spending is tracking your budget so far, you'll be fine.

You've picked a fabulous time to NOT be in workforce right now, IMO.
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Old 08-10-2020, 07:49 AM   #26
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How's that? But with negative interest we'll be able to reduce the burden, yes?
I think not ---Lowering interest rates will decrease the cost of newly issued debt but the dollars used to pay off any existing debt are now worth more in terms of what they can buy. An increase in inflation is good for borrowers and bad for lenders because the borrower makes the previously agreed-upon interest payments in dollars that are worth less. The converse is also true: a decrease in inflation is bad for borrowers and good for lenders because the borrower makes the previously agreed-upon interest payments in dollars that are worth more.
So in terms of "real" cost of government debt the FED should increase interest rates - not decrease them (increase inflation to a certain level). When inflation is lowered (especially negative) it increases the real cost of government debt outstanding, leaving taxpayers with a bigger tax bill in real terms.

Got a headache yet!!

Now back to the ongoing issues of SS which we all love and most need.

Peace
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Old 08-10-2020, 07:50 AM   #27
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Sigh...I'm hoping that, since there is really nothing I can do about it (except vote!), that I can figure out how to stop worrying. Thank you for letting me worry here, though, everyone!
Read and watch less uninformed stuff online and stay away from politics that should help with the worrying.

But the most important is what age to actually take your SS..
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Old 08-10-2020, 07:59 AM   #28
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Read and watch less uninformed stuff online and stay away from politics that should help with the worrying.

But the most important is what age to actually take your SS..
I know I should wait until 70 to take Social Security in order to get maximum benefits, but I really can't, financially. So I'm waiting (and using my pension augmented by my savings) until FRA.
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Old 08-10-2020, 07:59 AM   #29
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Ok, I'll be the one to ask...yet again...
I retired last August. I've been living on my savings since then (not my 403b, but savings - I planned it that way for the first year of retirement) plus my pension. I was all set to do fine in retirement. But...
Will Social Security be there when I take it next March (I'm waiting until FRA)? After reading about the president approving tax cuts...and the economy...I'm worried about Social Security. I'm also worried about my (defined benefit) pension still being there.
Sometimes I think all I do is worry...sigh...
I look for them to do a combination of four things. Lower the benefit a little,raise the payroll tax a little, raise the cap a little and raise the age to draw a little.
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Old 08-10-2020, 08:00 AM   #30
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Someone just grabbed the third rail with both hands, I have my popcorn.
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Old 08-10-2020, 08:02 AM   #31
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Based on the fact you budgeted and your spending is tracking your budget so far, you'll be fine.

You've picked a fabulous time to NOT be in workforce right now, IMO.
I agree...especially since I retired from a lifetime career of teaching. What those poor teachers are going through now...sigh... Timing is everything (smile!)
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Old 08-10-2020, 08:02 AM   #32
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I look for them to do a combination of four things. Lower the benefit a little,raise the payroll tax a little, raise the cap a little and raise the age to draw a little.
Pretty much business as usual then...
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Old 08-10-2020, 08:02 AM   #33
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Someone just grabbed the third rail with both hands, I have my popcorn.
Sorry...didn't mean to start anything!
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Old 08-10-2020, 08:04 AM   #34
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Sorry...didn't mean to start anything!
I wasn't referring to you. Someone who is de-funding the trust fund.
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Old 08-10-2020, 08:05 AM   #35
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Someone just grabbed the third rail with both hands, I have my popcorn.
I am just trying to say the government will try to spread the pain out so no one group bears it all. Worker or retiree
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Old 08-10-2020, 08:07 AM   #36
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I know I should wait until 70 to take Social Security in order to get maximum benefits, but I really can't, financially. So I'm waiting (and using my pension augmented by my savings) until FRA.
That still puts you in the more conservative and cautious minority. Most of the people I know NEED it at 62 if they don't want to work. You seem to be doing well.
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Old 08-10-2020, 08:08 AM   #37
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I wasn't referring to you. Someone who is de-funding the trust fund.
(...whew!...)
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Old 08-10-2020, 08:10 AM   #38
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That still puts you in the more conservative and cautious minority. Most of the people I know NEED it at 62 if they don't want to work. You seem to be doing well.
Making it so far. I don't have anywhere near the retirement resources that a lot of people seem to have here, but I've planned as best I can, and hopefully planned correctly! But I can't plan if the government keeps "moving my cheese" after the fact.
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Old 08-10-2020, 08:14 AM   #39
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For the OP
This pamphlet was included with my Vanguard 401(k) statement back in 2006.
Sorry about the quality, had a really cheap scanner back then.

Thank you for this. I'd read something similar before I retired. I am even more concerned now because I keep reading in the news the past couple of days that the Social Security "haircut" could be a lot worse if the payroll tax is cut...
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Old 08-10-2020, 08:16 AM   #40
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I know I should wait until 70 to take Social Security in order to get maximum benefits, but I really can't, financially. So I'm waiting (and using my pension augmented by my savings) until FRA.
I was more than able to wait until 70, and although 1.5 years isn't much in terms of moving up the payout date, out of concern the haircut would come sooner I took it at 68.5.
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