Social Security - Available in 2029?

[Shabby]

I know that nobody knows what will happen in the future, but I am 50 and looking forward and planning. I could start receiving social security benefits at 62 in 2029. Is it ok for me to include this into my planning for ER?

 

[JustCurious]

Yes.

P.S. Everyone drives a used car.

 

[braumeister]

Some of us think that the only change to SS is likely to be the 25% reduction in benefits starting in 2034. Others think our Congresscritters will figure out a way to avoid even that. Still others think the whole program will go belly up before then.

Personally, I'm in the first camp, but you have to make the assumptions that will let you sleep at night.

 

[Blue Collar Guy]

Yes.

P.S. Everyone drives a used car.

hahaha

 

[Major Tom]

What do you mean when you ask "is it OK"? If you mean do we think that SS will still be around, then there have been many posts and threads on this subject. The overwhelming consensus is that it will still be around, though if you want to be conservative, it wouldn't hurt to assume a slightly lower benefit. Besides, that's what us fiscally conservative folks do isn't it - hope for the best while planning for the worst?

Some think that SS might be taxed differently in order to effectively reduce benefits. Others think that the annual COLA might be tied to a different index, so that the buying power of the payouts could be gradually reduced over time. Some think that SS won't be affected that much at all, and I'm sure a brave few are even hoping that benefits will be greater

For myself, I can do OK with no SS at all. I am considering everything that comes from it as icing on top of the cake. If you want to include it in your plans, at your age, I think it's a pretty safe bet that you'll get at least a good percentage of what is currently projected. Why not use a figure of, say, 75% of current estimated benefits? It all depends on how conservative you want to be with your future planning.

 

[Blue Collar Guy]

1- when I found this site, after retiring I ran my numbers. I did them with full promised Soc sec, then I did it with zero. I then did it with 70 or 75 % I cant remember. Most of the time I throw in 70 % of my entire portfolio, 70 % of my pension etc. in so when I get the results I know thats how much hard cash I can spend on living. (i,e. after tax money).

 

[Shabby]

Thanks. I like the idea of figuring it at 75%. Not to get political, but it sure would be nice if I got back all the money I have been paying into it for years.

 

[IMATERP]

I know that nobody knows what will happen in the future, but I am 50 and looking forward and planning. I could start receiving social security benefits at 62 in 2029. Is it ok for me to include this into my planning for ER?

It is my opinion that the closer you get to age 60, the less of a chance that your estimated benefits will be reduced.

I think that there is a better chance that the laws are changed where SS would not be available at age 62 - but possibly phased in at a later age - similar to the changes that were made to the current system.

I turn 57 in December and I am rather confident that I will be able to collect SS at age 62 (if I chose to.)

Michael

 

[Shabby]

Aren't you taking it at 62? Seems like it would be good to get it ASAP in case things change even though it is less.

 

[SheitlQueen]

Thanks. I like the idea of figuring it at 75%. Not to get political, but it sure would be nice if I got back all the money I have been paying into it for years.

This is why I think it's a crock that SS is not inheritable. Someone pays into it their entire life, and either dies before they take benefits, or gets very little back compared to what they put in before they pass.

Not knowing what will be happening with SS when I finally take benefits (at age 70, three years from now) I am not planning on it being there. If it is, it will be a nice bonus.

 

[youbet]

Thanks. I like the idea of figuring it at 75%. Not to get political, but it sure would be nice if I got back all the money I have been paying into it for years.

But it doesn't work that way. Your money has been going to current retirees. Tomorrow's youngsters will be paying your SS. It's not a system I like, but that's the way it is.

 

[Sunset]

This is why I think it's a crock that SS is not inheritable. Someone pays into it their entire life, and either dies before they take benefits, or gets very little back compared to what they put in before they pass.
......

It was designed to be like welfare (an income re-distribution system) except that everyone qualifies for it.
You can't inherit it, because it's not a savings accumulation system. So each person really doesn't have an account with their contributions sitting in it waiting to be drawn.

Perhaps politically when it started the politicians didn't want to say it's "welfare for all" as that would not go over well with many people.

It's a crock like fire insurance, I am thinking I'm probably not going to have my house burn down, so I wasted my my money insuring it..

 

[flintnational]

As others have said, to be safe, I would assume a 20% to 30% reduction. Without any changes, SS tax revenues support this percent. Keep in mind, if you overreact it may cause less optimal decisions elsewhere in your plan. "Will I have to work more years. How much can I spend". There are risks on either side of your decision.

FN

 

[Major Tom]

It's a crock like fire insurance, I am thinking I'm probably not going to have my house burn down, so I wasted my my money insuring it..

Yes, and to add to that point, SheitlQueen, imagine that you live a lot longer than expected. Say you live to be 100 years old. How would you feel if, on reaching the age of 78, you received a letter from SS saying that your payments would cease because, at this point, you had already received everything you paid into the system? Doesn't seem so great now does it?

SS pays you for as long as you live, regardless of how long that is. Folk who die early don't collect that much, whereas those who live long lives collect a lot more. We all pay into it for the collective good. Instead of thinking of it in terms of "getting the most for your money", think of it as longevity insurance - like an annuity.

 

[youbet]

Yes, and to add to that point, SheitlQueen, imagine that you live a lot longer than expected. Say you live to be 100 years old. How would you feel if, on reaching the age of 78, you received a letter from SS saying that your payments would cease because, at this point, you had already received everything you paid into the system? Doesn't seem so great now does it?

SS pays you for as long as you live, regardless of how long that is. Folk who die early don't collect that much, whereas those who live long lives collect a lot more. We all pay into it for the collective good. Instead of thinking of it in terms of "getting the most for your money", think of it as longevity insurance - like an annuity.

It's just an issue that some folks, like SheitQueen, would prefer SS to be a savings plan rather than an insurance plan. But, it's an insurance plan (with a significant welfare component), so somebody has to receive less than they pay in. And that's the short lived.

 

[meierlde]

This is why I think it's a crock that SS is not inheritable. Someone pays into it their entire life, and either dies before they take benefits, or gets very little back compared to what they put in before they pass.

Not knowing what will be happening with SS when I finally take benefits (at age 70, three years from now) I am not planning on it being there. If it is, it will be a nice bonus.

Actually there are a couple of inheritable features of SS #1 the Wifes Benefit of 1/2 of SS if the spouse is over 62, second if your children are under 18 when you die they get benefits till 18 and the surviving spouse also gets benefits until the children reach 18. Recall the full name is Old Age Survivors and Disability insurance.

 

[brucethebroker]

Re: will SS be around in 2029?

My job training to sell annuities and mutual funds in 1980 included info on SS. We read many articles projecting the "future" of SS: reduced benefits, possible taxation, means testing, etc....stop me if this sounds familiar at all.....

And, here we are, 37 years later.....There is a reason touching SS is considered "touching the 3rd rail" by Congress.

I fully expect higher FICA taxes, continued low COLA adjustments and no other changes (except MAYBE raising the early claiming age from 62). OP, I expect you will do OK looking at a conservative 75% of your projected benefits.

 

[Aerides]

Yes it will be around, but the starting age may likely go up, as others mentioned. Since you are 50 now, probably a safe bet the current ages will apply to you, since any changes usually phase in with some line-in-the-sand grandfathering.

So for conservative planning, if you went with starting at 65, and getting 75%, that would be pretty safe.

If you were 40, I'd say plan on not starting till 70.

 

[audreyh1]

If I get less SS I'll be paying less in taxes. I hope it still covers my Medicare premiums.

 

[IMATERP]

It is my opinion that the closer you get to age 60, the less of a chance that your estimated benefits will be reduced.

I think that there is a better chance that the laws are changed where SS would not be available at age 62 - but possibly phased in at a later age - similar to the changes that were made to the current system.

I turn 57 in December and I am rather confident that I will be able to collect SS at age 62 (if I chose to.)

Michael

Of course, I would consider it at 62.

 

[Fermion]

Actually there are a couple of inheritable features of SS #1 the Wifes Benefit of 1/2 of SS if the spouse is over 62, second if your children are under 18 when you die they get benefits till 18 and the surviving spouse also gets benefits until the children reach 18. Recall the full name is Old Age Survivors and Disability insurance.

A little sexist there with "wifes benefit". My wife made 5x what I made.

 

[Ready]

I run firecalc assuming both zero SS and 75% SS, but realistically I think we will likely get the full amount.

I only run the numbers based on collecting at age 70. I'd rather use it as longevity insurance and go for the highest payout, just in case I live for a longer time than the averages.

Of course, that's 20 years from now, so I reserve the right to change my mind if the fund shortfall does not get addressed adequately by then.

 

[medved]

Obviously, nobody can know what will happen with SS in the future. All anyone can do is guess. For my own projection purposes, I discount SS by 50% because of the possibility that benefits might be reduced, or means-tested, or deferred -- though my own (relatively worthless) guess is none of those things will happen in the next 25 years or so. I do think Fica Max may be increased (or maybe the cap even lifted entirely) -- but that does not reduce benefits, it just increases the tax (for "wealthy" people).

 

[jollystomper]

I do think Fica Max may be increased (or maybe the cap even lifted entirely) -- but that does not reduce benefits, it just increases the tax (for "wealthy" people).

I agree. In addition, I do not think SS will be directly reduced, but it may be means tested so that if you have other retirement income from pension or 401K it will be reduced or taxed more heavily.

I am very fortunate to have three streams of retirement income in the future - pension, SS, and investment income/SWR. I have modeled as as long as I have 2 of the three I am still in good shape.

 

[meierlde]

I agree. In addition, I do not think SS will be directly reduced, but it may be means tested so that if you have other retirement income from pension or 401K it will be reduced or taxed more heavily.

I am very fortunate to have three streams of retirement income in the future - pension, SS, and investment income/SWR. I have modeled as as long as I have 2 of the three I am still in good shape.

Note today the income limits for tax exempt social security are 35 k single
and 44k married filing jointly (including tax free interest)