Anyone else worried about SS?

[albireo13]

Year to year my wife and I are getting more worried about major cuts to SS benefits.
I am 69yo, retired and pulling my SS. My wife was going to retire next year at 65 but, is now planning to keep working.
She is all done with her job but, is distraught about SS uncertainty.

Her SS benefit is expected to be a significant part of our cash flow so, she wants to bank more in her IRA. She also will have a pension which will benefit from another year working.

I think we will be ok but, she … not so much.

Anyone else rethinking their retirement plan base on SS status?

 

[mrfeh]

If benefits are reduced, I'd be amazed if that happened for anybody of your ages.

I would not be worried about it.

 

[audreyh1]

Check out this discussion: Modeling Social Security 2033 Insolvency

 

[sakowitzm]

If benefits are reduced, I'd be amazed if that happened for anybody of your ages.

I would not be worried about it.

An alternative view (not necessarily with strong conviction.) Any Congress that would actually vote to reduce Social Security benefits *might* not be too concerned about cutting them for everyone. If you're gonna touch the "third rail", may as well go big or go home.

 

[Car-Guy]

At "our" ages (late 60's/early70's) we don't worry about anymore.

 

[mrfeh]

An alternative view (not necessarily with strong conviction.) Any Congress that would actually vote to reduce Social Security benefits *might* not be too concerned about cutting them for everyone. If you're gonna touch the "third rail", may as well go big or go home.

Seniors vote at a much higher rate than everybody else.

I don't see either party going big.

 

[athena53]

I agree. I could see higher taxation of SS for those with income from other sources but the average SS check replaces only about 40% of your previous salary and a scary % (close to 50% IIRC) rely on SS for most or all of their income in retirement. They're struggling. Any substantial cuts to that group would not only lose votes but place a higher load on other income-based social programs to make up for the loss of SS.

I was a high earner so losing 100% of my SS would be painful but it wouldn't be the end of the world. I'd definitely have to cut back my substantial charitable donations.

 

[MichaelB]

I think there is one possibility we may see in the near future that would affect members here. The SS pension is indexed to CPI-W, the consumer price index for wage earners. This index could be replaced by Chained CPI. This would reduce the inflation adjustments by about 0.25% per year. It doesn’t sound like much but over 10 years it’s 2.5% of the total amount, which can be meaningful for someone on a tight budget,

This can be extended indefinitely into the future, which reduces the cost of the total fix needed.

Something similar might take place for the wage index. If the current wage index is replaced by one that is lower and grows more slowly, the future outlays will be less than currently projected.

 

[disneysteve]

I have always done our retirement planning without factoring in SS. Now that we're 60 and I'm retired, if we get SS, that's great. If we don't, we'll be just fine since I never counted on it in deciding when I was okay to retire.

I fully expect some sort of cuts or changes to happen whether it's to the tax structure or the benefit calculation or the ages or whatever but I still expect the system to exist. The benefits might just be a bit less generous than they are currently.

 

[Al18]

It’s not something I worry about - I have no control over the outcome. I’m assuming a 30% cut in 5 years.

 

[albireo13]

I have always done our retirement planning without factoring in SS. Now that we're 60 and I'm retired, if we get SS, that's great. If we don't, we'll be just fine since I never counted on it in deciding when I was okay to retire.

I fully expect some sort of cuts or changes to happen whether it's to the tax structure or the benefit calculation or the ages or whatever but I still expect the system to exist. The benefits might just be a bit less generous than they are currently.

Unfortunately, we need to factor in SS as part of our income. That is just reality.
I wish we were in a position where we can't but, life had other ideas.

 

[GenXguy]

Another thread about this? We just had one.

I'm more concerned about the ACA at this point. Hopefully SS will get propped up so that people who rightfully earned those benefits won't receive cuts to their benefits.

 

[albireo13]

If benefits are reduced, I'd be amazed if that happened for anybody of your ages.

I would not be worried about it.

I am not so optimistic.

 

[GenXguy]

Unfortunately, we need to factor in SS as part of our income. That is just reality.
I wish we were in a position where we can't but, life had other ideas.

I always factor in SS benefits as part of my retirement income because those dollars are worth just as much as any other dollar of retirement income. But, I do account for a 25% haircut in my projections to be on the safe side.

 

[VanWinkle]

If they cut it 30 %, I'll increase my withdrawal from nothing to 2 % from my assets.
Not worried at all, politicians need jobs.

 

[MC Rider]

I'm wondering if I should claim now at almost 66, or wait until 70 as I have planned.

 

[Gumby]

I laid my plans for retirement assuming that social security would not be available at all, with the thought that a conservative approach would be wise. That means I can survive a cut to social security, but I'm still going to be quite angry with all the feckless politicians who have led us to this juncture when they could have fixed the issues years ago at much lower cost.

 

[Mark1]

Unfortunately, we need to factor in SS as part of our income. That is just reality.
I wish we were in a position where we can't but, life had other ideas.

OP, if you really can't tolerate a 25 to 30% haircut, I would probably encourage DW to work one more year.

I'll be shocked if we don't just keep borrowing money to cover the SS deficit, however our retirement is over funded so we can sustain any haircut and still be fine.
Actually, I would welcome some government benefit cuts and tax increases. As I stated earlier, DW and I are over funded for retirement, provided they don't screw this up in our lifetime.

 

[jazz4cash]

It’s not something I worry about - I have no control over the outcome. I’m assuming a 30% cut in 5 years.

Same here. I never counted on 100% and my PIA is ~20% higher than my planning number. It’s a belt and suspenders plan. I think there is nearly 0% chance of getting cut to nothing.

I can tweak some things a bit but I just don’t worry about the things that are out of my comtrol.

 

[MarieIG]

Rethinking our plan - no. The issues with SS, while not welcome, are not new.

 

[AudiDudi]

Once the Trust Fund is depleted in about 10 yrs, there will not be enough money to cover full benefit checks. I planned on a 23% haircut 10 years ago. I don't think Congress will act (it's already too late, IMO) and if they do, it will be, as usual, too little too late. The politcal promise to stop taxing SS will likely cause the Trust Fund to run out of money 2-4 months early by my calculations.

 

[RetiredHappy]

We are spending every cent of SS but will continue to have a comfortable retirement without SS. So no, we are not worried.

 

[RetireBy90]

I’m not very focused on SS reductions. However I always thought the path of least resistance would include some of the following:
- another increase to full retirement age
- increase in contribution percentage
- increase in top end limit for SS contributions
- probably some combination of the above

My uninformed bet would be it will be much less likely to reduce for those already drawing followed by those 60 or older. It seems to me the solution will ultimately fall on younger not drawing yet.
Sorry kids and grandkids, with no more defined benefit pensions and SS bomb, plan accordingly.
Full disclosure, DW draws already and I’ll start at 69.5 Jan 26

 

[youbet]

I’m not very focused on SS reductions. However I always thought the path of least resistance would include some of the following:
- another increase to full retirement age
- increase in contribution percentage
- increase in top end limit for SS contributions
- probably some combination of the above

My uninformed bet would be it will be much less likely to reduce for those already drawing followed by those 60 or older. It seems to me the solution will ultimately fall on younger not drawing yet.
Sorry kids and grandkids, with no more defined benefit pensions and SS bomb, plan accordingly.
Full disclosure, DW draws already and I’ll start at 69.5 Jan 26

I'd vote for redrawing the benefits curve changing the bend points to lower benefits for high income folks. Then, have this new schedule apply to everyone including folks already receiving benefits. It seems silly to have some "Joe Toolbox" supporting a family on $40k - $50k a year pay higher contributions so wealthy current recipients, or soon to be recipients, don't have their unneeded benefits shaved a bit.

If comments on this forum regarding the need for full current SS for high income folks are typical ("It's just icing on the cake" or "I don't count on it or need it") are representative, no harm would be done to the high AGI folks and wouldn't put all the burden on the youngsters.

 

[luckydude]

Unfortunately, we need to factor in SS as part of our income. That is just reality.
I wish we were in a position where we can't but, life had other ideas.

You can't control what happens with SS, but you have control over your retirement spending. So, the question is how much discretionary spending have you built into your retirement expenses? If your retirement expenses have a lot of "fat" that can be trimmed in case of a SS benefits cutback, then you should be ok. If not, then IMO it would be a good idea to have your wife work an extra year just in case.