How are you spending your SS money?

[tmm99]

I have decided to start my social security this November (a few months shy of my full retirement year.) I retired at 55, so I haven't contributed anything to SS since then, but the amount of SS I will be getting is pretty good. Until now, I have been withdrawing about 3.5% of my liquid assets (401K, IRA, etc.) and living off that, along with my small company pension. My calculation tells me that if I continue with the same withdrawal rate from my portfolio, I will have around an additional $35,000 after-tax money I can spend every year once my SS starts.

I knew I would get SS eventually, but now that I am actually going to get it, I'm kind of dumbfounded. That's a lot of money at my disposal that I didn't have before.

I know a lot of you lowered your WR once the SS started. I am not going to do that, as I don't have any children to leave money to, etc. and I want to actually enjoy spending the extra. But on what? This is something I actually haven't thought about at all, for whatever reason. I'm not much of a spender to start with. (Probably only posted a few times on the BTD thread.)

So my question is... What are you doing with your excess SS money?

 

[audreyh1]

If you enjoyed traveling that’s a pretty good money sink.

Read the BTD thread.

No SS yet. DH starts his next year.

 

[OldShooter]

Our SS gets banked like any other income, into our checking accounts. Then we spend from our checking accounts as needed, topping them up from investment accounts also as needed. I get your idea but we are of the money-is-fungible tribe. In a case like yours we would probably increase travel spending and charitable. This is a good place to get travel suggestions.

 

[Dtail]

Travel and entertainment.

 

[Gumby]

Our SS gets banked like any other income, into our checking accounts. Then we spend from our checking accounts as needed, topping them up from investment accounts also as needed. I get your idea but we are of the money-is-fungible tribe. In a case like yours we would probably increase travel spending and charitable. This is a good place to get travel suggestions.

Exactly my methodology as well. Thankfully, we have not needed to dip into the portfolio since we retired, although I expect a very small draw this year, since we're flying business class to Japan this fall.

 

[tmm99]

Thank you for the travel suggestions. Planning a trip to Japan in April with a friend. This was supposed to happen last April, but we had conflicts, so we are doing it this year. Thinking of extending the trip, and also getting the JR train pass, but it's up to how budget-friendly my friend wants the trip to be.

I also looked at pickleballtour.com for pickleball-related tours. I am usually okay once I get to the destination, but I am a reluctant traveler compared to a lot of you here. I used to like to travel a lot when I was younger. I don't know what happend. Well, maybe I do. Getting to the destination can be such a drag. Plus I think I have become more of a homebody.

 

[RetiredHappy]

For us, it's another income stream that we need. We have been withdrawing 6 figures from our savings/investment each year to support our lifestyle, so every little bit is going to help. I am starting mine next year when I turn 62 on my own earnings record. It's small since I had only contributed 18 years, although at maximum amount each year. My spouse filed when he was 70.

 

[Car-Guy]

Gets deposited in my bank account each month out of thin air and is co-mingled with my other cash. Spends the same.

 

[aja8888]

I am spending it as fast as I can.

 

[MarieIG]

I haven't started yet - but it will be used to pay for Medicare and taxes.

 

[brett]

It is just like any other income cashflow. Same as my DB.

Then it gets spent.

 

[Focus]

Exactly my methodology as well. Thankfully, we have not needed to dip into the portfolio since we retired, although I expect a very small draw this year, since we're flying business class to Japan this fall.

I think this is what I'd focus on. The extra income wouldn't change my lifestyle choices much, but I'd look for ways to elevate my experience, as you have by opting for business class on a plane. So much for my previous pooh-poohing of what I viewed as status-driven, unnecessary perks!

 

[athena53]

Same as brett- it's about 1/3 of my annual spending. I did get somewhat of a windfall when I went from the Survivor Benefit on my late husband's record to mine at age 69 and it almost doubled. Allocated more to taxes, to charity and to the "slush fund", which is non-recurring items such as travel, appliance replacement, Stuff Happens, etc. since the regular expenses are budgeted for from withdrawals and my 2 small (total = $1,800) pensions.

Whatever is left in the slush fund at the end of the month goes mostly into the grandkids' 529s.

 

[tmm99]

I've just looked up the cost of flight to Japan in Business Class. Business Class is about 5 times higher in cost compared to Economy. That's definitely in the BTD territory.

 

[ShokWaveRider]

For us it is purely discretionary income. We spend it on anything we like. Living expenses come out of another pot.

 

[HI Bill]

Whatever you've denied yourself. If it's that Ferrari, go for it! If it's a new high-end audio system, go for it! If it's a house remodel, go for it (in stages)!

 

[grasshopper]

Never spent a penny out of our retirement account for 18 years,,,, until starting RMD's this year. Younger Ms G is still awaiting SS, I started at 62 after my BIG C DX. Travel has always been on Uncle Sam.

 

[Ronstar]

I am spending it as fast as I can.

+1. First it comes into my checking account. I then make enough credit card purchases to match that amount within the next month and use the ss $ in my checking account to pay off the credit card. Same thing every month. I know how much my ss is so I make sure that I spend that much before the next ss deposit.

I don't want to leave any excess, or then it looks stupid to have taken my ss before 70.

 

[Ronstar]

Never spent a penny out of our retirement account for 18 years,,,, until starting RMD's this year. Younger Ms G is still awaiting SS, I started at 62 after my BIG C DX. Travel has always been on Uncle Sam.

But...Spending SS is not on Uncle Sam. SS payments to us are paybacks for loans we made to the government over decades.

 

[dmpi]

If you have any debt whatsoever, pay it off. After that...blow the dough.

 

[rk911]

Nothing special. our SS checks, along with our pension checks, are auto-deposited into our checking account for bill payments, gifts, day-to-day use.

 

[Winemaker]

I had DW take hers at 65, she was the income earner. We spend hers along with our pensions. I'll take my $4500+ in 4 years when I turn 70. So it is written, so will it be done.

 

[rodi]

I haven't started yet - but it will be used to pay for Medicare and taxes.

Ah - there's one at every party.... People are talking blow the dough and you're getting practical on us. LOL.

But this raises the question: Presumably you pay taxes and health insurance now, right? So how is it different? Are you assuming taxes and medicare costs will be high enough that your net SS will be super small.

I'm not collecting yet. Not on medicare yet, either. Looking forward to medicare because I will be able to upgrade my health insurance and pay less than I currently am on an exchange plan. Tentative plan is to claim SS at 70, but life sometimes throws curveballs and so I am willing to be flexible with the start date if it makes sense. For example: if DHs prognosis after his cancer treatment is not towards longevity, but he has good enough health to travel, I'll collect sooner and we'll travel while we can.

 

[ivinsfan]

I had DW take hers at 65, she was the income earner. We spend hers along with our pensions. I'll take my $4500+ in 4 years when I turn 70. So it is written, so will it be done.

So you are 66? Can I ask why you picked this method? Did you mean your wife was the low income earner? Otherwise your method is confusing. Keeping in mind when one of you dies you lose the payment of the lowest check.

 

[Chuckanut]

Auto insurance, homeowners insurance, property taxes, higher food prices, braces for a grandchild, and assorted repairs to the house and appliances..

Almost forgot, $400 tabs on a five year old vehicle. Electric rates going up 3x inflation.