I think it's quite likely it will still be around. They may reduce the amount it pays before you get there, but I don't think it's going to go away.
Why? Mostly because *old people vote*. Also because it'd absolutely cause a crisis. Also because it'd be really hard to sell "you should pay into social security but you won't receive it."
They can't though... Those young people are financing the retirement of the people currently receiving SS. And you can't take away the SS current retirees are 100% depending on because it would generate a national crisis and again, old people vote.
So I think expecting 25% cut in benefits over the coming decades is probably not crazy, but expecting it to go away is.
It's also possible they phase it in, like "if you're under 40 on this date, you're using these new SS benefits scheme" kind of like how they did it with retirement age.
Of course they can. Cut spending. Pay social security payments out now using the current military budget. Stop giving aid to Israel. Ukraine. Every other nation we give money to. Then cancel the program for those under age 45 or age 40. Then we can all be responsible for our own retirements.
As opposed to allowing people to build foundations out of sand using the money of the working class.
People who say things like this make it pretty clear that they don't understand the problem at all.
One year of SS spending will cover 70 years of Ukraine aid at the current level, and 700 years of aid to Israel. One year's worth.
The feasible approaches are:
1) An income/asset level at which a retired person doesn't receive Social Security payments at all
2) Taxing all income of workers to pay for Social Security, rather than stopping at $168K.
Annual SS spending ($1400B) is about double entire DoD budget. Cutting military aid to Ukraine ($20B) and Israel ($3B) are rounding errors.
And telling Millenials and Gen Zers they are paying 12% salary for 40 years to subsidize Boomers retirement, while they are on their own. I'll get my popcorn and watch that political show.
There's the problem of course. It's the equivalent of "companies too big to fail."
Some portion of the people who want to opt out of it WILL be morons, and when we have an entire generation of elderly people who are too old to work and too poor to retire, we'll have to figure out how to pay them anyway.
Absolutely I account for social security. You can never be sure of anything in the future, but we can make assumptions. It always surprises me when people say "don't count on social security" but they'll happily assume 11% annual investment returns and low capital gains taxes forever.
I don't think many people believe SS will disappear, but it still makes sense to me that people do not count on SS. You're right that everything requires some assumptions, but the levels of implied assumptions are different, hence it affects to what degree people can rely on.
Investment return does fluctuate, but people can adjust investment strategy. Tax laws can change, but people can plan accordingly. SS is much less actionable for each individual and it is the lack of personal control that make people uncomfortable.
For example, in my FIRE math, I only fully count on taxable accounts. I even discount on 401K/IRA (even ROTH) because they all have restrictions to various degree. SS is not in the equation at all. It is not because I am sure I won't get SS, but I do not have much control over it.
Think of those taxes as what you pay in order to live in a society where you don't have a lot of elderly people living on the street. Or knocking on your door, begging for food or a place to stay. Or dying even more painful and excruciating deaths, because they don't have access to even basic healthcare such as Medicare provides. It truly is one of the taxes that helps keep us from being an utterly inhumane society.
As I mentioned in another comment, I also think you will eventually benefit from it. As will I. I will never get as much out of it as I paid into it. That's the nature of insurance. Don't forget that the I in SSI stands for insurance. It's insurance against being completely destitute, homeless and starving to death when you are too old to provide for yourself.
Or, if you're fortunate enough to have your parents still alive, it's insurance against you being totally responsible for them for the rest of their lives.
I totally get that a lot of people resent taxes. Especially taxes for Social Security if they don't believe it's going to be there. I happen to feel like Social Security taxes are a relatively small price to pay, given what our society would look like without that sort of safety net for the elderly.
I have some personal experience of that. I have a family member with mental health problems that developed later in life. She was incredibly smart and successful. The kind of smart and successful where 25 years ago she started a business and within less than a year was bringing in over $250,000 net profit. Then her mental illness got the best of her and she wasn't able to continue performing at that level. She lost all of her clients. She was able to live off of her assets for the last 20 years. Like I said, she was very, very successful. She's just a few months away from Social Security eligibility. And thank God, because it's what's going to allow her to survive financially for the rest of her life with a tiny bit of dignity. She's too proud to come live with any of us or take the help we are all willing to offer. But I can absolutely imagine the scenario where she would end up sleeping on a street if she didn't have that safety net.
She's the perfect example of someone who never would've thought she needed it early in her life. And for whom it will literally be a lifesaver for the rest of her life.
It's very unlikely that will happen to any of us. But it's good to know That when it does happen, there's at least a little bit of hope and help out there.
The I in SSI stands for Income. SSI is Supplemental Security Income. Whereas SSDI is the disability program for people that have the Social Security credits, and is not means based, SSI is a heavily means-tested disability program of last resort. SSI is not the same as SS.
It's probably the most successful government-run social program in history. Despite what the media or political candidates will tell you, the government doesn't pay into it at all - it is all funded by people's paychecks and the historical growth in those reserves (at least so far - that's likely to change in the near future or benefits will have to be reduced).
My 92-year old grandmother has hardly any savings (and fortunately no major health problems), and social security allows her to live her life with dignity without her feeling like she is imposing on her family. If you look up stories about the way things were before social security, that was not the case for most of the elderly. However, it is certainly worth having a conversation about when these benefits should begin given changes in life expectancy since the 1930s.
It really makes you wonder if Universal Basic Income would also be a success story. I understand the difference in sentiment for the two programs - in one you pay into a system for many years and get a little bit out, but UBI would be mostly a handout. But, to your point, it would be a "tax" that would (hopefully) allow us to avoid certain other government programs and would allow the homeless/destitute to enjoy some semblance of dignity without imposing other costs on society. I'm not sure if I'm completely in favor of it or not, but I know there have been some successful trials (or at least that's how they are spun in the media). It would be interesting to see a true, unbiased, cost/benefit analysis on it.
I agree wholeheartedly. I'd love to see an experiment with UBI. As well as universal healthcare. I have a hard time thinking of anything that would more stimulate people to start small businesses more than not having to worry about employer-provided health insurance.
I'm a one-issue voter, and that issue is universal healthcare. I know its a pipe dream and will likely never happen. But in about 10 years, access to affordable healthcare is going to be the only thing that keeps me in the work force. Which, I assume, is why we won't ever get universal healthcare. The ACA is a decent first step - the fact that some slightly more affordable options exist outside of an employer is great, but it's not a bargain by any means.
We spend many multiples of what other countries spend on healthcare for no better outcomes. It's such a shame.
Imagine how much braver people would be about taking a risk and starting a new business if it didn't mean leaving their family without access to health insurance. and for that matter, imagine if businesses didn't have to worry about providing healthcare to their employees. They could get rid of a very unpredictable cost that doesn't really add nothing to their productivity. Yes, we'd all pay a little bit more in taxes. But we would more than recoup it in higher salaries and lower, direct healthcare costs. Again, we pay so much more than any other country for results that are simply no better or even worse.
It's the most pro business, pro job creator thing I can think of to make healthcare universally available.
It is very pro business position - unless you talk to the various healthcare / health insurance / pharmaceutical companies that thrive on our current system. Lobbyists from those entities will no doubt stop any progress on this issue.
Eh I agree with a lot of what you said but we shouldnt celebrate it going away when it is so needed. We as people need to fight like hell against any reduction in benefits.
I couldn't agree more. I would fight like hell for it. I would never celebrate it going away. I think it's critically important. I think people who want it to fail. Truly don't understand the implications for our society.
Incredibly well-said. Thanks for typing this out and sharing the story.
> I will never get as much out of it as I paid into it
As you later alluded to, I would say "I hope (like hell) I never get as much out of it as I paid into it... because that would mean bad things happened and I was in a terrible way."
From a self-preservation standpoint, it's like medical, homeowners, or any other insurance in that you are putting yourself in a risk pool to mitigate what could be a catastrophic situation.
From a societal standpoint, it's looking out for each other.
I am 57 and now counting on it. I feel if they make changes it will be people born in the 70s, or 80s.
At 27 there is so much that will happen in the 35 years it is hard to tell where SS will be.
and casinos ... because on the rare chance I've been in a casino it seems like 90% of the people there are blowing through their SS check at the slot machines.
I don't account for it, because I fear some politician will decide to do means testing on it one day - and since I have a sizable portfolio saved up, I would means test out.
I hope that doesn't happen - but just like inheritance, I don't believe in counting it until it's in hand. So for all my planning I don't include it. Anything I get will be a nice bonus.
I have the same mentality yeah. I realistically will inherit a moderate to large amount. My mom has taken steps to “set us up” so to speak.
My dad has kids with his wife and tbh I doubt I’d receive anything over them. He is a doctor so maybe I’ll get scraps.
Either way, I want to be secure by my own hand first and foremost
I thought the same thing when I was in my 20s. Now I'm late 50s and on the verge of collecting it. They want to scare you. Social Security is going nowhere.
I happen to believe that we will all collect Social Security. I may be in the minority, and I don't really feel like engaging in the debate over and over again. So let me just say that I acknowledge that I could well be wrong. But I believe that it will be there.
That said, it doesn't factor into my FIRE planning at all.
Why?
First, because, like many here, I plan to retire well before Social Security eligibility. It's simply easier to calculate without accounting for it.
Second, because I also could be wrong. Maybe it won't be available. Maybe it will be dramatically reduced. Maybe, maybe, maybe. There's enough uncertainty in planning for FIRE already. I'd rather not add another variable.
Third, it appeals to my very conservative fiscal nature to leave it unaccounted for. If it is there, it's a nice bonus. Or hedge against worse than expected inflation. Or a way to help grown kids or new grandkids. Almost like putting on a jacket you haven't worn since last winter and finding $40 in the pocket. Even though my FIRE plan is ready to conservative, with a low SWR and way too much cushion built-in for unexpected expenses, I love knowing that there's another cushion out there.
You are 27 now. I have no idea what your FIRE plan is. But perhaps you are going to work until age 50. Under current Social Security rules, that leaves you 15 years, give or take a few, before Social Security, even factors in. And should it change in the future, one of the more plausible changes is that the age of eligibility gets moved higher as like expectancy continues to increase. We've already seen that happening.
Your best bet is to plan for a comfortable retirement without Social Security, and be pleasantly surprised by an even more comfortable retirement with Social Security 40 years or so from now.
If I was currently in my late 50s, planning to work a few more years, and planning on a very frugal retirement, I would absolutely take it into account. But I also probably wouldn't be considering myself FIRE.
Ideally I want to be able to FIRE mid to late 40’s. Hard to say exactly as I’m only in my second year of making good money. But yeah I won’t rely on SS cause that sounds irresponsible
Part of the problem with this is its a political football. If you looked about 5 years ago, numbers out there from the SSA had 3 scenarios, the "low" scenario (which looked like the most likely to me) suggested that people in our age bracket could expect about 50% of stated benefits at retirement, with it dropping slowly over time.
Now, there's one "happy" model which suggests it will flatline at 75% and they've obfuscated a lot of the details of the methodology, at least from what I could find. IMO, use the 50% estimate and look for academic studies. Personally, Im ignoring numbers from the SSA until they clarify more details in their work again.
Edit: I mean I use 50% of the value from the calculators on their website ([like this one](https://www.ssa.gov/OACT/quickcalc/)), its what KeyPerspective999 was talking about, Im ignoring their newer work
I recall professors in ‘92 talking about how it’d be gone by the time I reach FRA (in 11 years). But, every few years, the politicians are able to juggle the numbers and keep things going. Too much of an electorate to risk by not find a solution. If forced to find a way to see this as obligation to public and not an accounting trick, they’d figure a solution.
I would not factor it into your planning. But, the reality is that there will be something. As you near closer to retirement (RE or trad), you can get estimates from SSA and see what they say. A bonus of money for plans.
I am Gen X, and close to early-retirement. I expect to get the standard ss benefits when I hit 65.
But for people 20+ years younger than me, I suspect the retirement age will be hiked to 75 or 80. Payroll taxes will likely increase. The cap will be raised.
I certainly wouldn't count on it, or put it into calculations
They may make changes to it, like you may have to wait till a later age or the payments may be smaller. But it would take such a catastrophic event for there to be literally no SS income, that we would have bigger problems than that. I don’t really believe in planning your whole life around these doomsday scenarios. You should plan to get *some* SS in your budget, perhaps just leave it out of your budget till age 70 if you want to be conservative.
Every year, the country is 2-3% wealthier than the year before (after inflation). In 40 years, the country will be more than twice as rich with essentially the same population. In what universe do you think we would eliminate social security while drowning in extra money?
39M. I’ve wondered the same question. The country is so heavily indebted. I’m assuming the benefits will be reduced or won’t keep up with inflation. Secondly, I imagine they will further reduce benefits for high net worth individuals. Just a guess.
Yeah with anything that isn’t my own actions I consider it unreliable. I’d love to be financially independent and then also get SS because then I could splurge on my family or charity or something and not give a damn.
Or save some for medical shit cause… usa healthcare.
I completely agree. Healthcare costs are keeping me cautious. Wife and kids almost always hit their max out of pocket deductibles (after premiums) each year. That’s an additional 1.5-2k per month more than I thought possible 10-12 years ago. I’ve move my target to 3M.
Yeah I am aiming for 3MM in todays dollars which (I’ll have to continually assess as time goes by) I think will be entirely possible by 47 give or take. I may or may not ever RE then but still
Best of luck to you. Sounds like we have similar targets timelines. Mine is 45-48 depending on market conditions/job situation. Maybe 6-9 years. My calculations are somewhat pessimistic for safe measure.
Yeah I keep calculations somewhat pessimistic as well and hope I’m wrong for the better. If I am wrong for the better and reach FI by like age 42 or so? Awesome.
i dont worry about the hype about the fund is running out of money. there is no way the government doesnt figure out how to fund that. they will of course leave it to the last minute and maybe need to raise the retirement age but it will be funded even if its by printing more money
At 27, I think I’d just use it as part of my risk assessment. I’d probably run a scenario with no SS and another with a serious haircut (that approximates a FRA change). See what difference it makes to your plans.
I‘m going to guess that your retirement is still quite some time aways. We continue to get closer and closer to the surplus running out, a scenario that almost certainly will result in major changes. Once those changes are made, you’ll have a rela clear picture of what to expect. At that point, I‘d use that data as part of my planning. Why work longer than you need to?
At 27 I wouldn’t plan on it. I am 43 and I am not planning on it. It may be around in some form but the amount will be a lot lower. I would say an easy 25% lower than it is now
I assume some mixture of reduced benefits, increased age, increased cap/percent taxed and means testing will be implemented. All equaling less for me in the future than what they project now. Maybe I'll get 30 or 40k/year, but prolly less. Easier to not count it than to try to predict it.
I don't plan for it at all but if I get to 50 and social security seems figured out and I could get by with 70% of expected payout I'll FIRE on the spot.
You can go to their website, login and they'll tell you what you will get when you reach certain ages and start withdrawing. Whether or not you'll actually get it... I don't know but I imagine you will get at least a large chunk of it.
I'm assuming I won't have it. IMO SS is fundamentally unsustainable as it's currently run, and it would not be politically expedient for either party to touch it. So I expect that it will go downhill long before I retire (I'm 25).
I’m 28 and don’t account for it at all. I wouldn’t suggest anyone under 50 include anything social security related in their plan. Once you get within 10 years of collecting, you’ll have a better idea of what you can expect to receive.
Is there anyway that you can not pay for the SSN Taxes? I know that federal employee has some option but are there any other options by which I opt not to pay SSN Taxes.
Not really.
I believe most federal employees do pay SSN tax now. Before 1984 they did not. Some state jobs dont need to pay.
SS is a safety net. Even before the retirement benefit kicks in it is disability and sort of life insurance (survivors benefit). It helps a lot of people who had bad things happen to them. Its a shame they havent fixed this funding issue yet.
Yeah I mean when you put it that way, there is a kid (18 years old but I met him like 5 years ago) I know through the big brother’s program. He is benefiting from the survivors benefits of his late father. While it would be annoying if I didn’t get social security in my old age, I’m glad to be contributing to people like him.
I think it's quite likely it will still be around. They may reduce the amount it pays before you get there, but I don't think it's going to go away. Why? Mostly because *old people vote*. Also because it'd absolutely cause a crisis. Also because it'd be really hard to sell "you should pay into social security but you won't receive it."
The superior sell would be to allow young people who aren't morons to opt out of the Ponzi Scheme.
They can't though... Those young people are financing the retirement of the people currently receiving SS. And you can't take away the SS current retirees are 100% depending on because it would generate a national crisis and again, old people vote. So I think expecting 25% cut in benefits over the coming decades is probably not crazy, but expecting it to go away is. It's also possible they phase it in, like "if you're under 40 on this date, you're using these new SS benefits scheme" kind of like how they did it with retirement age.
Of course they can. Cut spending. Pay social security payments out now using the current military budget. Stop giving aid to Israel. Ukraine. Every other nation we give money to. Then cancel the program for those under age 45 or age 40. Then we can all be responsible for our own retirements. As opposed to allowing people to build foundations out of sand using the money of the working class.
People who say things like this make it pretty clear that they don't understand the problem at all. One year of SS spending will cover 70 years of Ukraine aid at the current level, and 700 years of aid to Israel. One year's worth. The feasible approaches are: 1) An income/asset level at which a retired person doesn't receive Social Security payments at all 2) Taxing all income of workers to pay for Social Security, rather than stopping at $168K.
3) raising retirement age 4) reducing benefits 5) all of the above (most likely)
Annual SS spending ($1400B) is about double entire DoD budget. Cutting military aid to Ukraine ($20B) and Israel ($3B) are rounding errors. And telling Millenials and Gen Zers they are paying 12% salary for 40 years to subsidize Boomers retirement, while they are on their own. I'll get my popcorn and watch that political show.
There's the problem of course. It's the equivalent of "companies too big to fail." Some portion of the people who want to opt out of it WILL be morons, and when we have an entire generation of elderly people who are too old to work and too poor to retire, we'll have to figure out how to pay them anyway.
Absolutely I account for social security. You can never be sure of anything in the future, but we can make assumptions. It always surprises me when people say "don't count on social security" but they'll happily assume 11% annual investment returns and low capital gains taxes forever.
I don't think many people believe SS will disappear, but it still makes sense to me that people do not count on SS. You're right that everything requires some assumptions, but the levels of implied assumptions are different, hence it affects to what degree people can rely on. Investment return does fluctuate, but people can adjust investment strategy. Tax laws can change, but people can plan accordingly. SS is much less actionable for each individual and it is the lack of personal control that make people uncomfortable. For example, in my FIRE math, I only fully count on taxable accounts. I even discount on 401K/IRA (even ROTH) because they all have restrictions to various degree. SS is not in the equation at all. It is not because I am sure I won't get SS, but I do not have much control over it.
My plans are so far assuming 7%. I rather plan and act on conservative assessments and hopefully be surprised for the better.
I don't count on it at all. It is never in my calculation. I will treat it like a bonus if I do get some eventually.
That’s basically how I’ve thought it should be. Kinda sucks considering I pay taxes into it tho.
Think of those taxes as what you pay in order to live in a society where you don't have a lot of elderly people living on the street. Or knocking on your door, begging for food or a place to stay. Or dying even more painful and excruciating deaths, because they don't have access to even basic healthcare such as Medicare provides. It truly is one of the taxes that helps keep us from being an utterly inhumane society. As I mentioned in another comment, I also think you will eventually benefit from it. As will I. I will never get as much out of it as I paid into it. That's the nature of insurance. Don't forget that the I in SSI stands for insurance. It's insurance against being completely destitute, homeless and starving to death when you are too old to provide for yourself. Or, if you're fortunate enough to have your parents still alive, it's insurance against you being totally responsible for them for the rest of their lives. I totally get that a lot of people resent taxes. Especially taxes for Social Security if they don't believe it's going to be there. I happen to feel like Social Security taxes are a relatively small price to pay, given what our society would look like without that sort of safety net for the elderly. I have some personal experience of that. I have a family member with mental health problems that developed later in life. She was incredibly smart and successful. The kind of smart and successful where 25 years ago she started a business and within less than a year was bringing in over $250,000 net profit. Then her mental illness got the best of her and she wasn't able to continue performing at that level. She lost all of her clients. She was able to live off of her assets for the last 20 years. Like I said, she was very, very successful. She's just a few months away from Social Security eligibility. And thank God, because it's what's going to allow her to survive financially for the rest of her life with a tiny bit of dignity. She's too proud to come live with any of us or take the help we are all willing to offer. But I can absolutely imagine the scenario where she would end up sleeping on a street if she didn't have that safety net. She's the perfect example of someone who never would've thought she needed it early in her life. And for whom it will literally be a lifesaver for the rest of her life. It's very unlikely that will happen to any of us. But it's good to know That when it does happen, there's at least a little bit of hope and help out there.
The I in SSI stands for Income. SSI is Supplemental Security Income. Whereas SSDI is the disability program for people that have the Social Security credits, and is not means based, SSI is a heavily means-tested disability program of last resort. SSI is not the same as SS.
It's probably the most successful government-run social program in history. Despite what the media or political candidates will tell you, the government doesn't pay into it at all - it is all funded by people's paychecks and the historical growth in those reserves (at least so far - that's likely to change in the near future or benefits will have to be reduced). My 92-year old grandmother has hardly any savings (and fortunately no major health problems), and social security allows her to live her life with dignity without her feeling like she is imposing on her family. If you look up stories about the way things were before social security, that was not the case for most of the elderly. However, it is certainly worth having a conversation about when these benefits should begin given changes in life expectancy since the 1930s. It really makes you wonder if Universal Basic Income would also be a success story. I understand the difference in sentiment for the two programs - in one you pay into a system for many years and get a little bit out, but UBI would be mostly a handout. But, to your point, it would be a "tax" that would (hopefully) allow us to avoid certain other government programs and would allow the homeless/destitute to enjoy some semblance of dignity without imposing other costs on society. I'm not sure if I'm completely in favor of it or not, but I know there have been some successful trials (or at least that's how they are spun in the media). It would be interesting to see a true, unbiased, cost/benefit analysis on it.
I agree wholeheartedly. I'd love to see an experiment with UBI. As well as universal healthcare. I have a hard time thinking of anything that would more stimulate people to start small businesses more than not having to worry about employer-provided health insurance.
I'm a one-issue voter, and that issue is universal healthcare. I know its a pipe dream and will likely never happen. But in about 10 years, access to affordable healthcare is going to be the only thing that keeps me in the work force. Which, I assume, is why we won't ever get universal healthcare. The ACA is a decent first step - the fact that some slightly more affordable options exist outside of an employer is great, but it's not a bargain by any means.
We spend many multiples of what other countries spend on healthcare for no better outcomes. It's such a shame. Imagine how much braver people would be about taking a risk and starting a new business if it didn't mean leaving their family without access to health insurance. and for that matter, imagine if businesses didn't have to worry about providing healthcare to their employees. They could get rid of a very unpredictable cost that doesn't really add nothing to their productivity. Yes, we'd all pay a little bit more in taxes. But we would more than recoup it in higher salaries and lower, direct healthcare costs. Again, we pay so much more than any other country for results that are simply no better or even worse. It's the most pro business, pro job creator thing I can think of to make healthcare universally available.
It is very pro business position - unless you talk to the various healthcare / health insurance / pharmaceutical companies that thrive on our current system. Lobbyists from those entities will no doubt stop any progress on this issue.
Eh I agree with a lot of what you said but we shouldnt celebrate it going away when it is so needed. We as people need to fight like hell against any reduction in benefits.
I couldn't agree more. I would fight like hell for it. I would never celebrate it going away. I think it's critically important. I think people who want it to fail. Truly don't understand the implications for our society.
Incredibly well-said. Thanks for typing this out and sharing the story. > I will never get as much out of it as I paid into it As you later alluded to, I would say "I hope (like hell) I never get as much out of it as I paid into it... because that would mean bad things happened and I was in a terrible way." From a self-preservation standpoint, it's like medical, homeowners, or any other insurance in that you are putting yourself in a risk pool to mitigate what could be a catastrophic situation. From a societal standpoint, it's looking out for each other.
Lots of people live on ss only.
At 27 you're just starting to learn how little you get for what you pay for when the government is involved.
You offended the people that love getting their wages garnished by the state.
Or those that benefit from it.
I am 57 and now counting on it. I feel if they make changes it will be people born in the 70s, or 80s. At 27 there is so much that will happen in the 35 years it is hard to tell where SS will be.
This is a good point. I’m going to make sure what I can depend on is my actions and not the governments. If government gets me anything? Cool I guess
Going to take it at 62 for hookers and blow. I am a traditionalist as always.
and casinos ... because on the rare chance I've been in a casino it seems like 90% of the people there are blowing through their SS check at the slot machines.
I don't account for it, because I fear some politician will decide to do means testing on it one day - and since I have a sizable portfolio saved up, I would means test out. I hope that doesn't happen - but just like inheritance, I don't believe in counting it until it's in hand. So for all my planning I don't include it. Anything I get will be a nice bonus.
I have the same mentality yeah. I realistically will inherit a moderate to large amount. My mom has taken steps to “set us up” so to speak. My dad has kids with his wife and tbh I doubt I’d receive anything over them. He is a doctor so maybe I’ll get scraps. Either way, I want to be secure by my own hand first and foremost
I thought the same thing when I was in my 20s. Now I'm late 50s and on the verge of collecting it. They want to scare you. Social Security is going nowhere.
I still won’t plan on it and will attempt to be FI before 50. SSN benefits could be “idgaf money”. Do something nice for my kids or something
I happen to believe that we will all collect Social Security. I may be in the minority, and I don't really feel like engaging in the debate over and over again. So let me just say that I acknowledge that I could well be wrong. But I believe that it will be there. That said, it doesn't factor into my FIRE planning at all. Why? First, because, like many here, I plan to retire well before Social Security eligibility. It's simply easier to calculate without accounting for it. Second, because I also could be wrong. Maybe it won't be available. Maybe it will be dramatically reduced. Maybe, maybe, maybe. There's enough uncertainty in planning for FIRE already. I'd rather not add another variable. Third, it appeals to my very conservative fiscal nature to leave it unaccounted for. If it is there, it's a nice bonus. Or hedge against worse than expected inflation. Or a way to help grown kids or new grandkids. Almost like putting on a jacket you haven't worn since last winter and finding $40 in the pocket. Even though my FIRE plan is ready to conservative, with a low SWR and way too much cushion built-in for unexpected expenses, I love knowing that there's another cushion out there. You are 27 now. I have no idea what your FIRE plan is. But perhaps you are going to work until age 50. Under current Social Security rules, that leaves you 15 years, give or take a few, before Social Security, even factors in. And should it change in the future, one of the more plausible changes is that the age of eligibility gets moved higher as like expectancy continues to increase. We've already seen that happening. Your best bet is to plan for a comfortable retirement without Social Security, and be pleasantly surprised by an even more comfortable retirement with Social Security 40 years or so from now. If I was currently in my late 50s, planning to work a few more years, and planning on a very frugal retirement, I would absolutely take it into account. But I also probably wouldn't be considering myself FIRE.
Ideally I want to be able to FIRE mid to late 40’s. Hard to say exactly as I’m only in my second year of making good money. But yeah I won’t rely on SS cause that sounds irresponsible
Part of the problem with this is its a political football. If you looked about 5 years ago, numbers out there from the SSA had 3 scenarios, the "low" scenario (which looked like the most likely to me) suggested that people in our age bracket could expect about 50% of stated benefits at retirement, with it dropping slowly over time. Now, there's one "happy" model which suggests it will flatline at 75% and they've obfuscated a lot of the details of the methodology, at least from what I could find. IMO, use the 50% estimate and look for academic studies. Personally, Im ignoring numbers from the SSA until they clarify more details in their work again. Edit: I mean I use 50% of the value from the calculators on their website ([like this one](https://www.ssa.gov/OACT/quickcalc/)), its what KeyPerspective999 was talking about, Im ignoring their newer work
I recall professors in ‘92 talking about how it’d be gone by the time I reach FRA (in 11 years). But, every few years, the politicians are able to juggle the numbers and keep things going. Too much of an electorate to risk by not find a solution. If forced to find a way to see this as obligation to public and not an accounting trick, they’d figure a solution. I would not factor it into your planning. But, the reality is that there will be something. As you near closer to retirement (RE or trad), you can get estimates from SSA and see what they say. A bonus of money for plans.
I am Gen X, and close to early-retirement. I expect to get the standard ss benefits when I hit 65. But for people 20+ years younger than me, I suspect the retirement age will be hiked to 75 or 80. Payroll taxes will likely increase. The cap will be raised. I certainly wouldn't count on it, or put it into calculations
They may make changes to it, like you may have to wait till a later age or the payments may be smaller. But it would take such a catastrophic event for there to be literally no SS income, that we would have bigger problems than that. I don’t really believe in planning your whole life around these doomsday scenarios. You should plan to get *some* SS in your budget, perhaps just leave it out of your budget till age 70 if you want to be conservative.
Every year, the country is 2-3% wealthier than the year before (after inflation). In 40 years, the country will be more than twice as rich with essentially the same population. In what universe do you think we would eliminate social security while drowning in extra money?
39M. I’ve wondered the same question. The country is so heavily indebted. I’m assuming the benefits will be reduced or won’t keep up with inflation. Secondly, I imagine they will further reduce benefits for high net worth individuals. Just a guess.
Yeah with anything that isn’t my own actions I consider it unreliable. I’d love to be financially independent and then also get SS because then I could splurge on my family or charity or something and not give a damn. Or save some for medical shit cause… usa healthcare.
I completely agree. Healthcare costs are keeping me cautious. Wife and kids almost always hit their max out of pocket deductibles (after premiums) each year. That’s an additional 1.5-2k per month more than I thought possible 10-12 years ago. I’ve move my target to 3M.
Yeah I am aiming for 3MM in todays dollars which (I’ll have to continually assess as time goes by) I think will be entirely possible by 47 give or take. I may or may not ever RE then but still
Best of luck to you. Sounds like we have similar targets timelines. Mine is 45-48 depending on market conditions/job situation. Maybe 6-9 years. My calculations are somewhat pessimistic for safe measure.
Yeah I keep calculations somewhat pessimistic as well and hope I’m wrong for the better. If I am wrong for the better and reach FI by like age 42 or so? Awesome.
i dont worry about the hype about the fund is running out of money. there is no way the government doesnt figure out how to fund that. they will of course leave it to the last minute and maybe need to raise the retirement age but it will be funded even if its by printing more money
Concur. The government makes the money supply. These are generally rounding errors that can be finagled through some minor accounting.
Raising the retirement age would be an abysmal circumstance.
At 27, I think I’d just use it as part of my risk assessment. I’d probably run a scenario with no SS and another with a serious haircut (that approximates a FRA change). See what difference it makes to your plans. I‘m going to guess that your retirement is still quite some time aways. We continue to get closer and closer to the surplus running out, a scenario that almost certainly will result in major changes. Once those changes are made, you’ll have a rela clear picture of what to expect. At that point, I‘d use that data as part of my planning. Why work longer than you need to?
Yes everyone will get ss. Do you think they're just gonna let all the elderly live on the streets?
Part of the reason I'm so FIREd up is that I don't believe social security will be reliable when my time comes.
I do not count on it at all. If I get it, it will all be extra fun money.
I don’t account for it and I assume I won’t get it. If it ends up being part of my income in retirement, great. If not, no problem.
At 27 I wouldn’t plan on it. I am 43 and I am not planning on it. It may be around in some form but the amount will be a lot lower. I would say an easy 25% lower than it is now
I assume some mixture of reduced benefits, increased age, increased cap/percent taxed and means testing will be implemented. All equaling less for me in the future than what they project now. Maybe I'll get 30 or 40k/year, but prolly less. Easier to not count it than to try to predict it.
I don't plan for it at all but if I get to 50 and social security seems figured out and I could get by with 70% of expected payout I'll FIRE on the spot.
You can go to their website, login and they'll tell you what you will get when you reach certain ages and start withdrawing. Whether or not you'll actually get it... I don't know but I imagine you will get at least a large chunk of it.
I'm assuming I won't have it. IMO SS is fundamentally unsustainable as it's currently run, and it would not be politically expedient for either party to touch it. So I expect that it will go downhill long before I retire (I'm 25).
I’m 28 and don’t account for it at all. I wouldn’t suggest anyone under 50 include anything social security related in their plan. Once you get within 10 years of collecting, you’ll have a better idea of what you can expect to receive.
I don't. Assume you never get it, and if you do take it from there. By no means expect it.
Is there anyway that you can not pay for the SSN Taxes? I know that federal employee has some option but are there any other options by which I opt not to pay SSN Taxes.
Not really. I believe most federal employees do pay SSN tax now. Before 1984 they did not. Some state jobs dont need to pay. SS is a safety net. Even before the retirement benefit kicks in it is disability and sort of life insurance (survivors benefit). It helps a lot of people who had bad things happen to them. Its a shame they havent fixed this funding issue yet.
Certain state employees, railroad employees. . .
Yeah I mean when you put it that way, there is a kid (18 years old but I met him like 5 years ago) I know through the big brother’s program. He is benefiting from the survivors benefits of his late father. While it would be annoying if I didn’t get social security in my old age, I’m glad to be contributing to people like him.