SSI income equals monthly spending - can I retire?

toddwelti

Confused about dryer sheets
Joined
Jan 12, 2025
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Los Angeles
My name is Todd. I am an engineer/researcher is Los Angeles area. I only just realized I can probably retire! My wife and I are 62, in good health, and I had assumed I would work to at least 65. Now that I realized it is a possibility to retire now, I can't stop thinking about it! Thing is, my wife and I together just through SS can generate right around the same amount we are currently spending (after tax). We have a disabled dependent who is getting a certain amount (we are caretakers), and I calculated my benefits and the spousal benefit if retiring at 62, i.e. now. We currently spend around $10,000 per month after taxes - including mortgage and everything. Our benefits combined with disability for our daughter, would just about equal that, mostly non-taxable as I understand it. PLUS, I have around 1,000,000 in IRA, some other smaller investments, and house equity (though I want to leave that to the kids). We have another $500,000 (fix ed amount) coming from inheritance sometime in the next few years, AND I plan to so some sort of part time side hustle as well. Not counting on that though. We could continue as is, without drawing significantly on the IRA. Of course, I want to get an advisor, look at software such as FireCalc, and model up all the possibilities and optimize everything, but I want to retire now. Am I crazy?!
 
Try running the Firecalc scenario and see what it says. The big issue always falls to health insurance coverage until you hit Medicare age.
 
How sure are you on not losing the benefits of your dependent?

If something happened to them would your expenses go down more than what you are receiving?

You might be able to retire anyhow, but I would not want to base it on someone else's benefits.
 
Try running the Firecalc scenario and see what it says. The big issue always falls to health insurance coverage until you hit Medicare age.
I did run it just quickly, but does it factor health ins payments from for example 62 to 65?
 
How sure are you on not losing the benefits of your dependent?

If something happened to them would your expenses go down more than what you are receiving?

You might be able to retire anyhow, but I would not want to base it on someone else's benefits.
Good point. She is in good health etc. but you never know.
 
Welcome to the Forum.

I think it would be wise not to count on an inheritance. Things happen.

I agree that exploring your situation through FIRECalc is a good idea. Keep us posted on your decision and other questions you come up with. Just keep in mind that we're not paid advisors, so our advice is more in the line of suggestions.

All the best to you as you plan out your retirement.
 
I I would also model if the numbers still work with only 1 SS check. Also, model with a potential 20% haircut.
At some point, one of you will be gone. You can model that as well in Firecalc, by entering different years of one SS ending.
Also, when you enter expenses in Firecalc, you must include all your expenses. Taxes, health insurance premiums and out of pocket estimates, one time expenses, car repairs/replacement, new roof, etc.
There are many experts on this topic, these are just a couple of things that I thought of.
 
I think that you will find that you are good to go with $120k of SS income and $1m in retirement savings. However, as others have pointed out, check all alternatives.

Is your current job one that you could reduce your hours? Downshifting is a nice way to ease into retirement... two of my sisters and I have each done that. Where I worked that was possible and 20 hours a week or more included employer medical and other benefits were prorated (salary, vacation days, etc.)

I was surprised to see that if your only income was $120k or SS that your federal and CA income tax would be nil. But a side hussle will result in more tax... tax on the side hussle income plus up to 85% SS being taxable. Check into it a IRS & State Tax Calculator | 2005 -- 2024
 
I would double check your SS benefit statement to confirm your numbers. At age 62, a combined monthly benefit sounds high. According to this chart from SS Maximum-taxable benefit examples
If you contributed the maximum SS since age 22, at age 62 the most you could collect per person is $2831 per month. This chart does not take into account the extra amount you would receive for your dependent. Also, most of us on this forum did not hit the maximum SS amount since we were age 22, so the benefit amount is less.
 
OP--
Welcome to the forum! It is a great place to learn and share.
I suggest:
* re-running Firecalc, including ALL of your spending amounts as listed in posts above
*double check SS numbers are correct and reduced for collecting at 62
* answer the questions in the post "Can I retire yet":


Some Important Questions to Answer Before Asking - Can I Retire?​

 
With Firecalc make sure "spending" on the home tab includes everything (taxes, medical, dental, ...).

On the other Income/Spending tab you can adjust your spending if you don't expect it to be flat throughout your life.

Spending has to account for lumpy spending like new car, new roof, ....

I would say if Firecalc shows a 95%+ success rate, you are good to go.
 
Thanks for all the good feedback! I will act on that for sure. As for SSI income, my statement says:
1736880687882.png


I don't think this includes spousal benefit.
I'm next going to look into health insurance for age 62 to 65, and see if i quality for any vouchers.
 
Technical note: SSI = Supplemental Security Income, which is basically welfare given to people who are destitute.

This is not relevant to the OP's situation.
He's talking about SS = Social Security...
 
Thanks for all the good feedback! I will act on that for sure. As for SSI income, my statement says:
View attachment 53885

I don't think this includes spousal benefit.
I'm next going to look into health insurance for age 62 to 65, and see if i quality for any vouchers.
You would get $2544, and if your spouse is claiming on your record instead of her own, then depending on her exact birth month her spousal benefit would be about half of yours, so your total would be ~$3816. She can't get a spousal benefit if her own SS would be greater than half of yours. Likewise, you don't get a spousal benefit from her work record if you are also claiming on your own record.

Social Security also has a family max payment. I didn't see if your daughter is getting SSDI or some other form of disability payment, and I don't know for sure that SSDI payments count towards the family max. If she is getting SSDI, I think you should spend some time with a counselor at an SS office to understand what your family would actually receive.
 
Also, I would recommend the higher income spouse consider delaying SS until FRA at least, assuming good health.

I realize they have a disabled dependent, so one spouse claiming SS at 62 should get an additional amount for that dependent?
I'm not an expert on this part of SS...
 
Thanks for all the good feedback! I will act on that for sure. As for SSI income, my statement says:
1736893103053.png


I don't think this includes spousal benefit.
I'm next going to look into health insurance for age 62 to 65, and see if i quality for any vouchers.
So, how did you come up with $10K for you, your spouse and disabled child? You cannot collect spousal benefits from your spouse if you are collecting yours. Similarly with your wife. Only 1 payment per person. You might have been double counting.
 
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So, how did you come up with $10K for you, your spouse and disabled child? You cannot collect spousal benefits from your spouse if you are collecting yours. Similarly with your wife. Only 1 payment per person. You might have been double counting.
...and beyond what RH said, you need to look at a possibly expanded budget in retirement.
If not weekly golf, then perhaps European river cruises.
You should focus on your Desired Lifestyle in retirement, not your present lifestyle...
 
Yeah 10k monthly in SS at age 62 even including a dependent sounds too high. Also I would think you would have a decent amount of taxes at this level.
 
While California currently does not include Social Security benefits as taxable income, the same is not necessarily true of Uncle Sam. Up to 85% of the benefits may count as taxable income. How much, if any, is taxable depends on the amount you receive and your other income.
 
While California currently does not include Social Security benefits as taxable income, the same is not necessarily true of Uncle Sam. Up to 85% of the benefits may count as taxable income. How much, if any, is taxable depends on the amount you receive and your other income.
Yes, most people with decent retirement income should plan on 85% of their SS being taxable from day one.
Mine certainly was...
 
Welcome to the ER Forum Todd.

I would review Frequently Asked Questions (as noted by Pacergal above) as well as play FireCalc for a bit. When taking SS keep in mind the surviving spouse.

I had a neighbor who retired and had one disabled child. After he passed, his child was moved into a nursing home and his spouse could no longer afford the upkeep on this house.

Looking forward to your participation on the forum.

MarieIG
 
My name is Todd. I am an engineer/researcher is Los Angeles area. I only just realized I can probably retire! My wife and I are 62, in good health, and I had assumed I would work to at least 65. Now that I realized it is a possibility to retire now, I can't stop thinking about it! Thing is, my wife and I together just through SS can generate right around the same amount we are currently spending (after tax). We have a disabled dependent who is getting a certain amount (we are caretakers), and I calculated my benefits and the spousal benefit if retiring at 62, i.e. now. We currently spend around $10,000 per month after taxes - including mortgage and everything. Our benefits combined with disability for our daughter, would just about equal that, mostly non-taxable as I understand it. PLUS, I have around 1,000,000 in IRA, some other smaller investments, and house equity (though I want to leave that to the kids). We have another $500,000 (fix ed amount) coming from inheritance sometime in the next few years, AND I plan to so some sort of part time side hustle as well. Not counting on that though. We could continue as is, without drawing significantly on the IRA. Of course, I want to get an advisor, look at software such as FireCalc, and model up all the possibilities and optimize everything, but I want to retire now. Am I crazy?!

I am assuming you are referring to SSI - supplemental security income, for your disabled daughter. Which typically also makes her eligible for Medicaid.

If you daughter was disabled before the age of 22, she should be eligible for SSDI - DAC - social security disability income for disabled adult child - when one of you starts receiving social security. Also the other spouse may be eligible for “child in care” benefits at the same time. For these reasons, for some it makes taking social security more attractive at 62.


This calculator helps you optimize these benefits.

 
Here is the back of the napkin ballpark numbers that I have wrt to total SS between the 3 of you, with the assumption that your spouse is the same age as you and making about the same as you.

- You $2544
- Spouse $2544
- Disabled child half your PIA when you start your benefits $1,800
Total $6,888 in monthly SS benefits. It is still a good chunk of money and if you withdraw 4% from your IRA, you can get the numbers closer to $120K a year.

Annual SS $82,656
IRA withdrawal $40,000
Total of about $120K before taxes.

If I were you, I would work a few more years to give yourself more headroom.
 
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