How are you spending your SS money?

[racy]

Travel the world, new vehicles, home improvements, gifts to sons and top shelf bourbon.

 

[MarieIG]

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.

Yep, that's me.

Currently costs for health insurance are deducted from DH's pension. When I reach Medicare age, Medicare becomes primary, and the health insurance secondary. I/ we will be IRMAA'd, and will actually be paying more, not less. I will have the max tax available withheld from social security, and deposit the remainder into a dedicated "tax account." (When I budget, funding tax payments is my first line item, and I outline in my head a plan for meeting that expense.) SS won't cover it, but it will reduce that portion which I will need to take from investment income. I always arrange for the necessary first, and then the discretionary. My tentative plan is also to wait until 70, but as you very correctly note, sometimes life throws you curve balls.

 

[pb4uski]

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. ...

+1. Our spending is not a function of income, but rather is a function of overall resources and SS is just another cash inflow.

 

[Midpack]

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

Then it gets spent.

+1. It's all just available money...I am not spending any more or less than before SS, just depleting our nest egg less now,

 

[Koolau]

We've been receiving our SS for a while now. We've found we don't really need it (as such) and have been funding our favorite charities to a greater degree.

We don't need more stuff. We already travel every year. Short of buying a C-8, I don't need a car. What's an oldster to do?

 

[pacergal]

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.

If you have the money, do it! That's what you saved for and it sounds like a long flight, so why not be super comfortable.

 

[Koolau]

(Quote) 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.

If you have the money, do it! That's what you saved for and it sounds like a long flight, so why not be super comfortable.

For whatever reason(s) even though I can afford such flights, I still look at the (limited) added "value" and still come down on the side of the cheaper fare. I suppose it's in the financial DNA by now, but I just can't pull the trigger on a 5X cost increase for BC or 1st Class. Just my thing, I guess so YMMV.

 

[Sue J]

When I got my first month’s Social Security I made a point of spending it. I’m a natural saver, probably to an excessive degree. I wanted to prove that I could spend it just because I knew it would be ongoing every month. So I bought a lovely table and chairs set for our deck.

After that, I save it every month. DH’s COLAed pension covers our monthly spending. Even with the last couple years of inflation, we are still able to make it on the pension. The SS payment goes into an online savings account paying 4.25%. I accumulate it there and then move it to a better investment.

My benefit is relatively small. Medicare Part B deduction and 10% withholding bring it down to $646. But to me that’s automatic savings and investing.

 

[audreyh1]

I plan to increase our annual spending goal by the SS amount less taxes. We’ll probably increase our gifting with some of it.

 

[tmm99]

+1. It's all just available money...I am not spending any more or less than before SS, just depleting our nest egg less

This is a question to some of you who answered in a similar way.

So, this way, you will end up leaving more money on the table in the end. More inheritance for children, etc? Is that the general plan? (I don't have children and I'm planning to spend the excess, but I would probably want to give money to my children especially if they needed some help, so I totally get it.)

 

[OldShooter]

(Quote) 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. For whatever reason(s) even though I can afford such flights, I still look at the (limited) added "value" and still come down on the side of the cheaper fare. I suppose it's in the financial DNA by now, but I just can't pull the trigger on a 5X cost increase for BC or 1st Class. Just my thing, I guess so YMMV.

We flew Delta One to Tokyo Narita in March. First time in that comfort level and it's something we can afford. But, like it or not, we still look for value and did not feel that that the value was there. The fancy seat with the lie-flat option is clever but definitely not spacious. More like lying in a coffin I suppose though I have not tried that. The space was awkward, too, with buttons and features hard to get to. Food was OK, but it was still airplane food. Bottom line is that we are unlikely to BTD on that particular thing again. We'll probably continue flying in "comfort class" or whatever the extra-space cattle class is called.

 

[tmm99]

(Quote) 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.



For whatever reason(s) even though I can afford such flights, I still look at the (limited) added "value" and still come down on the side of the cheaper fare. I suppose it's in the financial DNA by now, but I just can't pull the trigger on a 5X cost increase for BC or 1st Class. Just my thing, I guess so YMMV.

I'm so far in that camp as well. Is BC that's 5X Enomy truly worth it? I think it becomes more and more worth it as we get older, but I am not sure if I'm there yet. Will airlines sell 3 seats to one passenger? That's all I need so I can lie down for the duration of the flight. That's definitely not flying in style, but I guess I'm frugal at heart.

 

[tmm99]

We flew Delta One to Tokyo Narita in March. First time in that comfort level and it's something we can afford. But, like it or not, we still look for value and did not feel that that the value was there. The fancy seat with the lie-flat option is clever but definitely not spacious. More like lying in a coffin I suppose though I have not tried that. The space was awkward, too, with buttons and features hard to get to. Food was OK, but it was still airplane food. Bottom line is that we are unlikely to BTD on that particular thing again. We'll probably continue flying in "comfort class" or whatever the extra-space cattle class is called.

I feel the same way at this point. I've upgraded to BC with my CC and the amount of additional money I spent was small, and I would do that in a heart beat, but if I had to pay the full retail price, I would feel ripped off.

 

[Scrapr]

We fly first/Business for longer flights (Transcon or Europe). Business usually adds in lounge access. So we use that. It's all part of the experience. Virgin lounge in London is fantastic. And we enjoy all of them. Other little nicities are the bag check if needed and sometimes faster lanes for FC/B fliers. And just a little bit more personal service.

If you watch fares you can see the fares fluctuate & see patterns. Google flights has a grid of prices with departure & return dates. You can watch that for trends. Our next flight I watched the grid with about 7-8 "good" prices. Over 2 weeks the number of "good" prices slimmed down to 2 or 3. That is when I jumped on a fare

 

[Dash man]

Mine just goes in our checking account for general expenses. DW will start hers in two years when she turns 70. She was the higher earner and I’m most likely to pass on first. I started mine the month before I turned 65.

 

[jim584672]

Blow that dough. Too early for me right now.

 

[ElizabethT]

We are in the same boat OP, and have been having fun thinking about the upcoming possibilities. What we do not want to do is anything that would raise our fixed expenses, so it will all be directed to discretionary, or one time purchases.

So far we’ve landed on buying a convertible with a portion of our Year One SS proceeds. We’re also bumping up our annual Dining, Entertainment, Hobbies, and Travel allocations, the latter including some family travel we look forward to paying for for everyone - the giving with a warm hand concept, which I think I first read about here.

 

[5Miler]

I'm coming close to the end of my 3rd year collecting SS benefits. When SS started for me, I just shut off my monthly IRA distribution that I had been collecting for about 10 years so I started living on my SS instead. Even though I have Medicare and 12% income tax withheld, this still resulted in about a $12K annual increase in my net income over my previous IRA distributions. We live pretty simply most of the time.

Keeping that increase in mind I suppose you could say I increased my annual spending on travel and other discretionary purchases. Mostly travel Delta One which has become a thing with DGF and I.

DGF just got her first SS check yesterday as she filed at 65. Her annual payments after Medicare but before taxes will equal her previous retirement plan withdrawals. She hasn't really decided what to do yet but has stopped her 401K withdrawals at least until the end of the year as she must reconcile her new income with her ACA subsidy so we are trying to limit the payback she gets hit with for this year. I suspect she will restart at least a partial 401K withdrawal and increase spending which has been curtailed greatly by playing ACA subsidy games for the past 10 years.

 

[Koolau]

I'm coming close to the end of my 3rd year collecting SS benefits. When SS started for me, I just shut off my monthly IRA distribution that I had been collecting for about 10 years so I started living on my SS instead.

How will ceasing your IRA distributions affect your situation when RMDs kick in?

 

[tmm99]

We are in the same boat OP, and have been having fun thinking about the upcoming possibilities. What we do not want to do is anything that would raise our fixed expenses, so it will all be directed to discretionary, or one time purchases.

So far we’ve landed on buying a convertible with a portion of our Year One SS proceeds. We’re also bumping up our annual Dining, Entertainment, Hobbies, and Travel allocations, the latter including some family travel we look forward to paying for for everyone - the giving with a warm hand concept, which I think I first read about here.

It sounds like you are coming up with a lot of fun ideas for your SS money, and that's what I want to do as well.

Let me tell you... Maybe because SS seemed so far away and I never really thought much about it, the realization of actually getting this extra money in a few amonths is starting to make me feel giddy! It's like winning a lottery that pays out every month!

 

[Badger]

It is just money that comes from any other source. It is put into our joint checking account along with our small pensions and used for expenses. We like to gift the max to my wife's grown children and if we need a big ticket item or want to travel then we can use our investments that have continued to increase each year.
Everybody has different expenses and our plans from years ago are working. We have no mortgage and all medical expenses are covered by Medicare and Tricare for Life that are the typical big expenses. As long as my wife can continue to play tennis with her friends or go to her fitness class and I can exercise at the base pool and do some simple projects around the house we are happy.

 

[Midpack]

This is a question to some of you who answered in a similar way.

So, this way, you will end up leaving more money on the table in the end. More inheritance for children, etc? Is that the general plan? (I don't have children and I'm planning to spend the excess, but I would probably want to give money to my children especially if they needed some help, so I totally get it.)

We’re spending more in retirement than we ever did while working. But that doesn’t mean we want to figure out ways to spend as much as possible. With passive income, our WR is now 1-2%, without touching out taxable. So there will be a residual that will go to family and charity, how much remains to be seen but 7 figures.

That was the plan all along, and we knew SS would come - it’s not as if it’s some surprise windfall we didn’t plan on…

 

[Gumby]

We have never spent money just because we happen to have it. We spend exactly as much money as we need to spend to do what we want to do and have what we want to have. If spending less made us happier, we would do that. If spending more made us happier, we would do that. As long as we don't hit zero money before hitting zero life, the amount that remains when we check out is entirely irrelevant to us.

 

[workmyfingerstothebone]

Spending it all , and then some, on the grandkids (3) college's.

One graduated this year , another in 2025 ,,, the youngest will start in 2 years.

PS.
I'm retired the wife will be in 3 years, her decision.

 

[Koolau]

We’re spending more in retirement than we ever did while working. But that doesn’t mean we want to figure out ways to spend as much as possible. With passive income, our WR is now 1-2%, without touching out taxable. So there will be a residual that will go to family and charity, how much remains to be seen but 7 figures.

That was the plan all along, and we knew SS would come - it’s not as if it’s some surprise windfall we didn’t plan on…

It's true that we (all) knew SS was coming - eventually. Still, when it started, it seemed quite a shock. We suddenly had more money than we knew what to do with. That's a good problem to have. It was easily solvable for us as we knew of needs we could meet with the excess. Still, the initial influx of "new" money was quite startling to us. YMMV