Poll: If you or your DW have started SS, how much did starting SS increase your spending and/or quaity of life?

[Badger]

We both retired from a teaching career and started SS at 64 with very small pensions, are mortgage free, and health insurance is taken care of with Medicare and Tricare. Combined they all come to about what we had already been living on and we only touch some dividends for gifting to my wife's 2 grown children or when we bought our "retirement cars". It covers the normal living expenses (utilities, groceries, insurance, etc.) with enough for wife's tennis and home repairs. The only changes are we don't go to work so we have time for hobbies and relaxing. Our investments are there if there are any surprises.

 

[Ready-4-ER-at-14]

i chose significant. The older of us took SS just before full retirement age basically so as not having to juggle another payment re the Medicare cost, since a spouse is no longer covered by others health insurance when they hit Medicare age.

Since the younger of us had a significantly higher social security earnings record, the intent was to receive spousal benefits for the older when the younger eventually turned on social security. The spousal benefit for monthly income stops increasing at full retirement age but the survivor benefit of inheriting the higher of the two social security benefits keeps increasing till 70 i assume.

Had to use an online calculator but it suggested maximum benefit to us if younger took benefits after full retirement age but before 70. We waited a few months after the optimum age suggestion. We also set younger persons turn on to be towards the end of the calendar year to hopefully also catch any cola for the year.

The added income allowed Roth and regular money to compound for a lot of extra years, that was used to purchase other income streams to help fund rest of life.

I was reading this thread thinking hmm a number of these assumingly affluent people saying the ss# was not significant at a time where government is means testing everything... wonder how it might or could be taken away. I mean at some point everyone can have excess income. We have been paying high Medicare costs monthly for a while now as the last of the fine tuning of retirement caused taxable events that did not produce income.. ie conversions.

 

[Time2]

We already spend much less than 4% of our nest egg. My wife and I are waiting until this coming Jan to start SS, it will add about $58k to our already low spend rate. I don't expect we will change much in our spending. My wife has talked about a kitchen remodel, I said wait until we start SS. However when she finds I'm not willing to do the work, she may balk at the price. Our 3 vehicles all run fine, but they are all older, our daily driver is a 1997 Toyota T-100, we have a 2005 GMC Cargo Van and a 2009 Toyota 4 runner. Will need to upgrade at sometime, but feel no great need until there is a problem.

 

[audreyh1]

We both took SS at 62. It did not change our quality of life or change our spending.

It did change our portfolio withdrawal amount for the better.

Three years later, Medicare further reduced our portfolio withdrawals by about another $28,000 per year.

I use my annual portfolio withdrawal after expected taxes we will pay to gage how much I can spend in the coming year.

SS will add to that, so it certainly will increase the available spending money.

 

[RetiredHappy]

I use my annual portfolio withdrawal after expected taxes we will pay to gage how much I can spend in the coming year.

SS will add to that, so it certainly will increase the available spending money.

We are the complete opposite. We spend what we want to spend on, which typically means extra withdrawal is necessary throughout the year. We do have our rough projected spending, not including ad hoc home projects which can be expensive. My husband has started his RMD, so we never withdraw beyond RMD from his IRA. Since I have a large bucket in taxable account, all additional withdrawals come from my account. We range from needing to draw an extra $60K to $100K from taxable per year. When my SS starts in January, it really means that the extra withdrawal will drop by about $20K. It does not change how much we spend. My IRA has been turned into 2 term fixed income annuities and help fund our spendings.

 

[CRLLS]

No noticeable change for us so far. We lived simple, comfortable lives and that hasn't changed. I guess that we have come accustomed to our lifestyle over the last 50 years. Old habits die hard. We are making some incremental progress on the spending front though. For the first time, we are taking first class seats on a long flight in November.

 

[harllee]

I bet the answer to this survey lies mainly in the size of the monthly SS amount. For me a SS payment of around $5000 per month made a huge difference in my lifestyle (it doubled my income). If my SS payment had only $2500 the impact on my lifestyle would have been much less.

 

[pb4uski]

^^^ That may be a factor in some cases, but I suspect that most posters here have very significant SS benefits. I think a larger factor is likely that they have a lot of retirement savings, so they are very confident that they'll never run out of money, so they have no hesitation about spending down some from 62 to 70 as if they had SS.

If you retire in 2024 at 62, the maximum benefit would be $2,710. And that benefit is 70% of their PIA, so their PIA would be $3,871. And if they wait until 70 they would get 3 years at 8% or 124% of their PIA, or $4,800/month.

So if starting SS at 62 is important to you, you would only need $260,160 in retirement savings to start withdrawing $2,710/month beginning at 62 until you turn 70. Most posters here have way more than that.

My point is that for those who have $1-2 million saved and good longevity prospects, starting SS at 62 because they can spend more while they are young and go-go is more in the mind than in reality as long as they can get over the psychological hurdle of starting to spend their retirement savings.

 

[Out of Steam]

My wife took her Social Security shortly before turning 63, and it allowed us to stick with a 4-4.5% withdrawal rate from retirement savings despite price increases. It made a significant difference for us.

I'm 65 and haven't taken mine yet, though I will apply for it sometime in 2025. We've postponed work on our house that we would like to have done, including some things I can no longer do myself because of health risk. The freshly paved street outside the house is also making our old driveway look pretty bad.

This is in accordance with our planning, as I decided at retirement that I wouldn't delay past 65 if it negatively affected our standard of living.

 

[RobLJ]

Along the lines of the OP's post, I'm taking SS in early 2025 at FRA, primaily to encourage younger DW to spend more, although it won't probably be my SS check, maybe half or so. But that will mean European hiking with first class seats.
Waiting on 70 for her SS, so when I pass, she'll get the maximum. Given the market, we're at the point where we can spend more, but taking it all out of 403b/IRA seems like more than if a 1/3 is my SS. It's a psychological thing. I have convinced her to loosen the strings for travel, including to see her sister in Penn several times over the last 3 years, but I think I'm good for only another 6-8 years of moderate/challenging extended hikes. Scotland in July and the Alps last year were fine, so I may misunderestimate myself.

 

[racy]

DW took SS at 66, I at 70. SS allowed us to reduce our portfolio withdrawal rate from 3.03% to 0.94%.

 

[retiredunder50]

There were a few mentions in the thread of WEP and GPO impact on social security income. This year looks like things are actually moving towards a vote on the issue: House lawmakers plan to force a vote on bill to kill provision that cuts some feds' retirement pay

 

[wmc1000]

We took ours at FRA and it eliminated any need for annual WR as it more than covers our expenses since we do not owe on our home or vehicles. Our nest egg is split approx. 62% taxable and 38% non-taxable so RMD's will not cause a tax torpedo to any great extent down the line when those kick in.

 

[Koolau]

There were a few mentions in the thread of WEP and GPO impact on social security income. This year looks like things are actually moving towards a vote on the issue: House lawmakers plan to force a vote on bill to kill provision that cuts some feds' retirement pay

Probably not for this thread, but I don't understand the provisions of the law as they stand. The site you include suggests the provisions are "unfair." Of course, the original law suggested that the law made it more "fair." I'm sure those affected think its unfair, but I remember all kinds of talk at the time about gummint employees "double dipping" and such verbiage. "Who's ox is gored" comes to mind but YMMV.

 

[jazz4cash]

Probably not for this thread, but I don't understand the provisions of the law as they stand. The site you include suggests the provisions are "unfair." Of course, the original law suggested that the law made it more "fair." I'm sure those affected think its unfair, but I remember all kinds of talk at the time about gummint employees "double dipping" and such verbiage. "Who's ox is gored" comes to mind but YMMV.

Just consider the linked article is from a publication called Government Executive. Offhand I’d guess the two provisions could be tweaked to be ‘fairer’ but eliminating them would open the door for claims of denied benefits, no?

 

[Gumby]

Just consider the linked article is from a publication called Government Executive. Offhand I’d guess the two provisions could be tweaked to be ‘fairer’ but eliminating them would open the door for claims of denied benefits, no?

Unless specifically provided otherwise in the law itself, changes to the laws are generally not retroactive.

 

[Out of Steam]

Given the market, we're at the point where we can spend more, but taking it all out of 403b/IRA seems like more than if a 1/3 is my SS. It's a psychological thing. I have convinced her to loosen the strings for travel, including to see her sister in Penn several times over the last 3 years, but I think I'm good for only another 6-8 years of moderate/challenging extended hikes. Scotland in July and the Alps last year were fine, so I may misunderestimate myself.

I could reasonably delay taking my Social Security to (or beyond) my FRA in 2026, but my wife has become nervous about our finances, and a withdrawal rate above this year's planned 4.5% would be a nonstarter. I will file sometime during 2025, possibly as early as June.

 

[pb4uski]

If you think it would be better overall for you to delay beyond FRA, what you could do is to at your FRA carve out 3 years worth of 124% of your PIA and then live on your age 70 SS amount plus 4.5% of the remainder. It is a smaller version of the carveout approach at age 62 mentioned in other threads.

For example, let's say that your PIA at age 67 is $40,000 a year and your age 70 SS benefit would be $49,600 (124%0 and that you have $800,000 saved and are comfortable with a 4.5% withdrawal rate.

Option A woud be to collect $40,000 of SS at age 67 and combined with $36,000 of portfolio withdrawals (4.5% of $800,000) leaves $76,000 for spending.

Option B would be to carve out a side fund of $148,800 [$49,600 *(70-67)] from the $800,000, leaving $651,200. You take $49,600 annually (from the side fund for the first 3 years and SS thereafter) and $29,304 in portfolio withdrawals from the retirement portfolio (4.5% of $651,200) and have $78,904 to spend.

You can safely spend more now and for the rest of your life with no additional risk.

 

[Walt34]

Our position would be "somewhat" affected if SS went away but not significantly. Most months well over 50% of it gets banked anyway, since between the pension and some investment income we have all the regular expenses covered. It's only when "lumpy" stuff comes due, like property taxes, that we spend most or even all of the full SS income for that month.

The SS income is mostly being spent as I predicted before it started; DW spoiling the grandnieces and grandnephews rotten. I'm hard put to think of a better use for it.

 

[Teacher Terry]

Probably not for this thread, but I don't understand the provisions of the law as they stand. The site you include suggests the provisions are "unfair." Of course, the original law suggested that the law made it more "fair." I'm sure those affected think its unfair, but I remember all kinds of talk at the time about gummint employees "double dipping" and such verbiage. "Who's ox is gored" comes to mind but YMMV.

I have spent a lot of time reading about this issue. Basically if you spend 30 years as a government employee and then have 10 years in low paid jobs such as high school and college part time jobs you look like a low income worker and your SS is bigger than it should be because SS is slanted towards giving low wage earners more money in benefits in a effort to help the lower earners . So it’s fair to these people to reduce their SS since they aren’t low earners and in fact will have big pensions..

WEP is unfair to people like me that split their careers between SS and non SS jobs. I’m not sure how well I have explained this but it’s not as simple as it appears.

 

[Teacher Terry]

There were a few mentions in the thread of WEP and GPO impact on social security income. This year looks like things are actually moving towards a vote on the issue: House lawmakers plan to force a vote on bill to kill provision that cuts some feds' retirement pay

This would make a real difference for me but I won’t hold my breath that something will actually happen to restore my SS to what it should be.

 

[gamboolman]

ms gamboolgal started hers at age 62 because all the folks we asked and the online calculator programs said that was best.

I am waiting until age 70 for the same reasons as detailed above.

Like alot of folks, her SS has not made any change to us. But it's nice to get her check each month