Retirees, does SS cover all your needs?

[DEC-1982]

I ask cause it “appears” that even with cuts that SS would cover our expenses. Even retiring early the numbers are there as we are high earners and don’t spend much.
It would seem that we could still plan for a 30yr drawdown but have it be from 40-70yrs. At 40yrs we’ll be at 4%WR and that’s with pitiful 3% estimated returns.
Spending down tax advantage would avoid tax torpedo. Downsides?

IIRC from the letters the IRS sometimes sends me, SS is supposed to cover 40% of the pre-retirement income (which I know is not the same as expenses).

 

[Alan]

We are a few years away from FRA but yes, SS will cover our needs. Add onto that our UK SS, which starts at the same time, and the 2 together will cover plenty of extras. When I die DW will lose her SS and my UK SS but there will still be plenty to cover her needs.

 

[DrRoy]

Don't receive SS. Likely will not for 10 years,

 

[grasshopper]

Barely covers our travel expenses, and that's OK with us.

 

[footenote]

DH took SS at FRA; his SS currently pays 44% of our average monthly expenses. (This includes frills, so his SS covers at least 50% of necessary expenses like groceries, utilities and property taxes.)

When / if* I also take SS at my FRA, our combined SS will pay for 110% of current average expenses.

(Having said that, when one of us dies first, the other will receive somewhere south of 50% of current expenses through SS, a factor others have thoughtfully noted here.)

Looking back, I had anticipated SS would be a much lower % of average expenses in retirement than it is.

*"If" because I'll take SS early if my health gets dodgy. In that case, combined SS would pay for about 80% of our expenses depending on the exact age when I applied for benefits.

 

[HadEnuff]

I retired at 62, and took SS almost immediately. My earnings history was over 40 years, earning at least the max, so I am guessing my SS benefit is about the max it could have been, given that I took it at 62 1/2.
No it does not cover all of my expenses, but what it does do is let me live my comfortable lifestyle, and keep my WR in the low 3s%.
When DW starts taking her SS in about 13 months, our combined SS will equal about 1.6% of our nut, so it will shave off about 1.6% of our WR.

DW retired at 59 1/2.

I can tell you that when I was in my 30s, in the 1980s, when I projected my retirement numbers, I factored ZERO for SS, just because I figured there was no way to accurately predict what the politicians and inflation would do to that amount. It wasn't until I was about 7 years out from R when I looked at the SS numbers and realized it was going to have a significant impact on my lifestyle in my retirement.

 

[Tom52]

We've been retired almost 5 years and just this fall DW started her SS at age 64.5 so that I could file for spousal at my full retirement age of 66. Current plan is for me to draw on my account at age 70. If our spending would remain more or less constant in the future then at least for the next 4 years combined SS would cover about 40% of expenses. Once my full benefit kicks in SS would cover nearly 100% of expenses. Now if we go forward with plans for a second home in Florida, that changes things significantly.

 

[athena53]

Nope, not even close. If I look at my YTD expenses and strip out charitable donations, taxes (assuming that if my income were SS only I'd owe none) and travel, it covers only about half. If I add in my two small non-COLA pensions it would almost exactly cover what I spend excluding those items- so the income my savings makes the difference between the essentials and being able to travel and donate to charity.

I could do better by bumping up my SS to what I could collect on my own record- right now I'm collecting Survivor benefits on late DH's record- but I'm 65 and want to wait till I'm 70.

 

[lucky penny]

I’m in my 30’s so I’m trying to get a feel for how retiree’s are doing with their SS. I have a decent SS earnings history(cause I work a ton of overtime) and a very low burn rate. I’d like to hope that trend will continue but time will tell. Was hoping to see how like minded people a generation older than me were faring. All I read about online is about how SS barely covers anything and everyone at work in their 50’s and 60’s doesn’t want to talk about SS or retirement in general.

I'm a high-earner with 40+ years of contributions who waited till 70. I'm also in a HCOL area. For me, yes, it could, and in the past year it did, except for significant spending on travel & gifts to relatives in need, which my other income & assets can easily support.

Which isn't surprising, since when my income was highest, I spent around 1/3 (excluding taxes), saved around 1/3, and the rest went to taxes. It isn't easy to change that mind-set.

But this forum has opened my eyes to a lot of things, including that it's not just OK to spend more, it's foolish not to! Thanks, Robbie!

 

[Souschef]

Between our 2 SS and small pensions, most of our expenses are covered. The rest comes from our RMD's.

 

[MRG]

At 67, it should cover at 66% of our expenses. That's still 5+ years away.

 

[NYEXPAT]

SS for the kids & I cover about 2/3rds of expenses and YW's salary picks up the rest. It is nice never dipping into our stash!

 

[OldConch]

No mortgage. We plan to take SS in 4 years at 68 and 62. Based on our average budget for the last 3 years, SS should cover all of our needs, including house and auto maintenance. It would be comfortable but tight.

 

[Dawg52]

Covers 1/2 of basic or normal expenses.

 

[Bir48die]

I'm expecting the FRA SS to cover needs but not wants. SS at 70 should cover needs and a little fun.
I don't want to live a minimalist life though.

Yeah, we could make it on both SS but then I'd have to cut all of my vices and that's not going to happen

 

[Cobra9777]

We are 57 and 58. Tentative plan is for DW to file sometime between 62 and 67 and I'll wait until 70. That total, in today's dollars, covers about 45% of current spend. However, our current spend includes a lot of discretionary (travel, home improvements, hobbies). SS would cover 70% of bare bones non-discretionary. And if/when we downsize from this huge house, it would cover 80% of non-discretionary. So the answer is no, SS will not cover all of our needs, although in a SHTF scenario, it would be kinda close.

Our retirement planning generally includes a 30% haircut on SS, which is down from 100% during most of my pre-ER planning. We also have two pensions that currently cover 50% of expenses, but that drops to 40% by the time we're 70 because one is non-COLA and the other has a partial COLA. Still, depending on inflation, downsize timing, and other variables, pensions plus SS should cover at least 85% of projected spending and probably closer to 100%.

 

[pb4uski]

I think the more relevant way to frame the question is not how much SS covers of one's spending but how much of one's necessities it covers. We could live reasonably well on SS... we would have a roof over our heads and food on the table and that's is all it was really intended to do.

IOW, in the title thread put emphasis on "needs".

 

[Chuckanut]

Nope. But, I do know people for whom it comes close.

A lot of it depends upon housing costs. If one lives in a low COL area with cheap rents, or has a paid off house then things are easier. In many localities the low-income person can get a break on property taxes. That can really help stretch the SS check.

 

[SheitlQueen]

I receive widow's benefits and if I cut my expenses down to the bare bone I could survive on it alone. I will take my own SS in five years and it will be a big step up in income. In today's dollars I could live nicely on it, but we'll see how inflation is by then.

 

[workmyfingerstothebone]

Expenses are approximately 63K/year.
I estimate we could drive that down to 38K if needed. That would be a frugal life style for us.



Estimate my SS at 62 : 20K/yr.
Estimate my SS at 67 : 30K/yr.


So SS alone will not work.

Luckily we have other sources of income.

 

[PatrickA5]

We plan on taking SS at 62 and 70. It should cover around 40% - 50% of our living expenses, assuming our living expenses are MUCH less than this year (Ugh).

If we were to both wait until 70 to collect and our expenses are down to where I think they'll be, then we might get around 70% out of SS. But, that's not the plan.

 

[jkern]

I plan to start SS at the end of 2019 (62 years old). SS will cover about 2/3's of my essential expenses and about 1/3 of my total cost of living.

 

[youbet]

Not even close. Probably 15% - 20% of our annual budget. DW's benefit is very small. Instead of deducting her Part B premium from her monthly SS check, they send her an invoice for the difference between The Part B premium and her smaller SS benefit. Thus, our aggregate SS benefit is smaller than mine alone.

 

[MarieIG]

It would not, unless we significantly cut our standard of living. DH, who has the higher earning history is planning to delay to 70. We have not yet decided when I will claim, but anticipate that it will be sooner.

 

[SmallCityDave]

I think it will.


The bigger question is what is a need.