Mid 50's or younger... are you counting on Social Security?

[DawgMan]

I will be 56 in a month and while currently FI, I continue to work part time by choice. I have shared before on this site that I have plans for Fat Fire which excludes any dependency on Social Security. I am part of a neighborhood retirement/social club that includes mostly guys from their early to later 60's and I have noticed it is clear Social Security is part of their plan... a leg of stool.
While my plan basically ignores SS, all the talk in my local group had me go run the SS calculator and to my surprise, it shows that if I wait until 70, between my wife and I we could have almost $60K coming our way. This got me looking up the latest on the solvency of SS...

"As a result of changes to Social Security enacted in 1983, benefits are now expected to be payable in full on a timely basis until 2037, when the trust fund reserves are projected to become exhausted. At the point where the reserves are used up, continuing taxes are expected to be enough to pay 76 percent of scheduled benefits." Ssa.gov

So, this sort of prompts a number of questions for people roughly my age and younger...

- Should we expect SS to be there in full for our life time? Will the politics be strong enough to effect SS for years to come?
- Should we take the current solvency at face value? If so, what does that do to your timing/plans to start taking SS?
- If, like me, you did not factor SS in your modeling... should you? And if you do, how will you/should you adjust your spending up until you start taking withdrawals?

There are worst plans in the world... just plan on SS as found money. But, at the same time, if you believe it will be there, you effectively could make an argument to "blow the dough" a little more aggressively up until then.

What say you?

 

[aaronc879]

I'm only 40 and i'm expecting SS to be there at at least 75% of current payout. I will not be a high net worth person and if I was I would be less sure about SS since I think it could be means tested in the future.

 

[FREE866]

Im 53. I have factored it in to my plans and hope to wait till I'm 70 ( 2036) to start collecting. Nothing is guaranteed, but my sense is at the very least we will get 80% + ( probably 100%) of what SS tells us. I think there is a tendency on this board for people to be over conservative about these topics.

 

[DawgMan]

Im 53. I have factored it in to my plans and hope to wait till I'm 70 ( 2036) to start collecting. Nothing is guaranteed, but my sense is at the very least we will get 80% + ( probably 100%) of what SS tells us. I think there is a tendency on this board for people to be over conservative about these topics.

I hope you are right. there are allot of "what ifs" out there. I am the tail end of the baby boomers so my people are "large and in charge" when it comes to politics. I think it could be political suicide for either party to "take away our toys". That said, at some point the math has got to work so i suspect somethings will start to ding it (i.e. net worth, gross retirement income).

 

[UnrealizedPotential]

I am age 50 and SS is a part of my future plans.
I have my pension, tira, and roth ira to take from as I age. SS is certainly a part of my future plans and I am certainly counting on some percentage of it being there.

 

[FREE866]

I hope you are right. there are allot of "what ifs" out there. I am the tail end of the baby boomers so my people are "large and in charge" when it comes to politics. I think it could be political suicide for either party to "take away our toys". That said, at some point the math has got to work so i suspect somethings will start to ding it (i.e. net worth, gross retirement income).

Here's an article with some good info IMO:

https://www.fisherinvestments.com/e...hing-retirement/busting-social-security-myths

 

[GenXguy]

This topic has been beat to death on this forum and many others.

I'm also in my 50's and factor SS into my calculations based on the currently promised benefit amount because those dollars will be just as spendable as the dollars in my stash. It's not a bonus, it's an earned benefit. I look at it no differently than the funds that will come out of my IRA, 457B, brokerage, CDs, etc.

I also factor in that those SS dollars will be 85% taxable because of the yearly post-tax SS benefit cut explained here:

https://www.early-retirement.org/fo...-break-even-dilemma-101996-5.html#post2367635

If there are even greater cuts to SS benefits in the future, including yet another increase in the FRA, I will take comfort in knowing that I have a big cushion of stash that will allow an enjoyable retirement with plenty of discretionary spending that isn't dependent on the full promised SS benefit. And even if it is cut in the future, I don't expect it to disappear completely, so I will continue to figure it into my calculations.

 

[CaliKid]

I am 50'ish and do not consider SS at all. If it happens will be bonus spending money. I feel fortunate to be in this position.

 

[DawgMan]

This topic has been beat to death on this forum and many others.

I'm also in my 50's and factor SS into my calculations based on the currently promised benefit amount because those dollars will be just as spendable as the dollars in my stash. It's not a bonus, it's an earned benefit. I look at it no differently than the funds that will come out of my IRA, 457B, brokerage, CDs, etc.

I also factor in that those SS dollars will be 85% taxable because of the yearly post-tax SS benefit cut explained here:

https://www.early-retirement.org/fo...-break-even-dilemma-101996-5.html#post2367635

If there are even greater cuts to SS benefits in the future, including yet another increase in the FRA, I will take comfort in knowing that I have a big cushion of stash that isn't dependent on the full promised SS benefit. And even if it is cut in the future, I don't expect it to disappear completely, so I will continue to figure it into my calculations.

I suppose I am coming from the angle of what your level of confidence is if it will be there if you are in a certain age group and what it does to your plan. In theory, if you believe you have say $60K coming your way at age 70 and thereafter, that's effectively a $1.5M investment injection (assuming the 4% rule). That's a big deal for many. If you think it will be there, you can adjust your spending (or perhaps retire even earlier) prior to say 70 by that $60K (example) additional income. It moves the needle and can be a game changer for many.

 

[Cayman]

I'm early 50s and RE'd about 2 years. Firecalc says we're 100% without inputting SS. We won't rely on it, but fully expect to receive it - We paid for it!
We plan to take SS at 70.

 

[geeky_grrl]

I'm 48 and I think SS will be there for me but at probably a reduced level from now. I'm assuming about 75% of what the current benefits are for modelling.

I don't expect to actually need the SS money so I'm not as worried about it as someone who will rely on it. My current plans are to claim as late as possible to use SS as longevity insurance so I don't think I will claim earlier based on solvency. At current projections I'll hit FRA after SS needs to be cut for solvency so I don't know if it will matter.

 

[COcheesehead]

I heard a SS expert talk the other day on a podcast and he said even when it goes belly up in 2035 or whenever it’s supposed to be broke, it still will be able to payout close to an 80% level.
So do I need it? No. Will I take even at 80% ish? Yes.

 

[Scratchy]

54 YO here. When I input data for retirement modeling programs I discount the SS numbers by 50 %. I have a decent-sized nest egg and I strongly suspect that that will be used against me when it comes time to claim.

 

[Bigdawg]

I expect to receive what SSA.gov has me projected to receive. It would be political suicide to cut benefits. My wife is a government employee. They advertise the three legged retirement. TSP(their 401K), their pension and the third leg is SS. They are union. I can't see the federal government going back on that employment/retirement promise. The way the federal government shuffles money around, prints more and deficit spends I don't see 2037 becoming a problem. If for some reason they cut it by 25% we will be fine. FATFIRE will become almost as fat fire.

 

[GenXguy]

I suppose I am coming from the angle of what your level of confidence is if it will be there if you are in a certain age group and what it does to your plan. In theory, if you believe you have say $60K coming your way at age 70 and thereafter, that's effectively a $1.5M investment injection (assuming the 4% rule). That's a big deal for many. If you think it will be there, you can adjust your spending (or perhaps retire even earlier) prior to say 70 by that $60K (example) additional income. It moves the needle and can be a game changer for many.

I'm closer to 55, so I think that by the time any legislation was to be passed to cut benefits or raise the FRA, I'm more likely to be across the age threshold of those affected. They tend to exclude those "close to retirement" from taking a hit. I don't think my retirement income will be high enough to be affected by potential future means testing, either. So, all said, I'm confident I won't see a significant cut that others often refer to, but it's easier to be confident if you aren't dependent on the full promised SS benefit amount to live an enjoyable retirement in the first place. As a single SS recipient, I'm expecting closer to $35K/yr in today's dollars.

Of course, there are other potential results that would be worse, such as if Congress does nothing, and the SS benefits are cut across the board for all recipients when the incoming funds can only fund ~80% of benefits. Also, if a form of UBI (Universal Basic Income) was to replace Social Security among other programs which pays much less than my projected SS benefit.

 

[MrsHaloFIRE]

Im mid 30s, husband mid50s. I figure he may get half and I may get nothing. If I end up with some, I will be happy. I figure theyre going to means test it at some point. Just a hunch. So it may still be around, but not for everyone.

 

[John0019]

Being 58 I'm a little past the mid-50's you asked input from but FWIW I tried to plan or conceptualize both with and without S.S. Works either way for me but with it guess kids will at least have more legacy $ left to them...or at least they hope so anyway (ha). Generally feel it won't go away any time soon, but would not be surprised to see it reduced by 20-25% by mid-2030's or so. With it though, for us personally even if cut by 20-25% it along with distributions from annuity would more than likely at least cover our living expenses...thus leaving more tIRA/401k, taxable, etc to do whatever or blow that dough!

 

[Dtail]

Still feel SS will be fixed to pay out at 100% in the future.
It is slated to provide us with 50% of spending, so it is definitely in our plan.
BTW, it is already indirectly means tested.

 

[Mulligan]

I am mid 50s and greatly expecting to get my SS. When I turn 62, I will immediately file and get my ~$120 a month. My lady will be so impressed when I take her out for an additional dinner each month compliments of SS.

 

[tb001]

DH turns 57 this year and we expect to take SS at 62 (young kids so it makes sense financially). Given that it’s only 5 years away, we are factoring it into our plans. I’m turning 50, so it’s less of a sure thing. Still, we’re assuming some level of SS for me. If it’s cut to 75%, that will be fine. Just comes out of discretionary extras. If it’s totally eliminated, it may mean we need to readjust some spending plans, but it won’t lead to failure.

 

[JillPill]

Turned 54 this week. I work as a housing counselor with seniors (people 62 and older) who are homeowners- they are my main client base. Mostly blue collar in their working days, some white collar. The vast majority - 60-70% have no other income than Social Security in their retirement.

I'll give you a canary in the coal mine response - you don't want to live in a country that does not fund Social Security as it was set up. You don't want to see what that America looks like.

I'll give you my political answer too. We spend more than 2 billion dollars a week in our military adventures in the Middle East. We *have* the money to fully fund Social Security, in spades. Don't let anyone convince you otherwise.

Yes. I expect Social Security to be there when I retire.

 

[JackJester]

I expect SS to be fully funded when I retire. I am 53 and will be able to FIRE without SS when I'm 55. I look at SS as an annuity to fund Long Term Health Care as a worst case scenario. But, regardless, politicians aren't stupid enough to let SS flounder. Old folks are the ones that vote. SS funding won't get solved until the last minute since no politician has the vision to solve future problems. Its only when they are forced to vote to save their jobs will they provide the necessary funds to make it solvent.

 

[scrabbler1]

I am 56 and have been living just fine off my taxable investments for the last 11 years. I consider SS to be one of my 3 "reinforcements," with unfettered access to my tIRA and my frozen company pension the other 2, available at various times starting at age 59.5.


If somehow SS isn't there or gets reduced by the time I am old enough to be at FRA (age 67), I will still have the other 2 reinforcements ready to supplement my already good financial situation.

 

[targatom2019]

50 here and retired. I don't count on SS in my budget assuming it will not be here when I collect SS. If I do get SS then it will be part of "blow that dough"

 

[2lhasas]

I do not think it's wise to consider SS as part of retirement at my age, unless something about what has been going on in Washington leads you to believe our Congress can do anything the protect it. Deficit is growing. Interest on our debt is becoming a larger and larger percentage of the budget every year. Here's a fun calculator that can tell you how much you are likely to get if the current situation continues.

How Old Will You Be When Social Security's Funds Run Out? | Committee for a Responsible Federal Budget