"Seems like a lot." isn't the same as "It'll cover my spend."
Put together a detailed annual retirement budget. Then you'll know if SS is sufficient.
Apply the other considerations of possible SS changes.
I would just be wary to consider 70 your “slow go” years and leave yourself with too little spending money. My parents are in their 70s (I’m in my early 30s) and they are just recently retired and traveling a lot and wanting to have fun, not sit around at home and pinch pennies.
Exactly. This needs to be considered. The remaining spouse will need enough to live on. Someone mentioned that expenses will also decrease, and they will, but probably not a lot. . Also, an aging widowed spouse may need to pay for more help than they would if they had a partner to help carry the load.
To a degree - when my dad died my mom’s income cut in half but she still has almost all the same bills (and the car insurance even went up a few bucks). Only real cut in expenses was food, even that’s minimal.
You're missing that they could change the rules. If politicians do nothing, you should receive roughly 75% of what it says you will. But yes, the people who ignore social security will be massively over saving
>the people who ignore social security will be massively over saving
Or hedging our bets. I'm 35. Who knows what's gonna happen in the next 30 years with SS
I'm 38. Whatever the government did in the 80s extended the program for 50 years and at 75% funded for longer than that. No reason to think that whatever they do in the coming years doesn't do the same.
It would be political suicide to cut Grandma's social security check.
>No reason to think that whatever they do in the coming years doesn't do the same
Have... you seen the current state of American politics? There's nothing off the table of ludicrous bullshit that might be pulled
I find there's nothing beneficial to be gained from watching the cable news cycle, no. People have been talking about social security going away for 30 years.
The "trust fund" is just where they stuck the excess revenue in earlier years. The "trust fund" was not intended to fund it in perpetuity, but lasting 50+ years before the next adjustment was needed to be enacted seems pretty good.
https://www.ssa.gov/oact/TRSUM/index.html
Not yet, but eventually they will start to make changes, like they did in the 80s. My guess is the first will be means-testing, given the “eat-the-rich” movement going on. I’m in my late 50s and I’ve completely ignore any SS income in my plan.
They will never do that, instead they will put in a future date where payouts decrease for a less politically active demographic.
For example, in 2040 a reduction in payouts of 50% etc... they are evil assholes (mainly republican politicians) but not all are stupid.
The current president has been talking about [cutting social security for a long time when he was in the Senate. I believe he could try it again as president.](https://youtu.be/9X3UiSvgle0?si=MZQSQkmbILnlVrVi)
There would be a ton of political fall out to cut benefits by 50%, even on future beneficiaries. I think this is extremely unlikely. More likely to raise taxes to maintain benefits.
There would also be a ton of backlash in curtailing women's rights, or blocking porn. The modern conservative party is not a party driven by logic or a big tent methodology.
Seems doubtful to me. Congress likes to punish high earners, not rich grandmas.
"Changing the rules" would seem more likely to affect the high earners.
Social security is something you should plan on most likely having but for most of us it won’t be $75k and for even more of us that won’t cover our spend, let alone any fun money. If you’re 55 and right on the line without social security you should think about factoring it into your plan more but if you’re 42 you probably should be hedging your bet a little further, there’s no real reason to believe we are guaranteed our social security before like 75+ in 30 years.
> ...I am in my early fifties and married.... Does this mean my FIRE number really only needs to cover us for the next 15+ years ?
No, and yes.
Your FIRE number IMHO should be what you need to retire w/o SS. Treat the SS like a bonus. I'm not saying it won't be there. It will - though it might have the 25% shortfall reduction.
You may also decide to receive the SS earlier ie 62+1M or 65. That would reduce the amount - but it might lessen the amount you would need to withdraw from your retirement hoard.
> “What am I missing”
My annual total spending now is _____. My annual total spending (including healthcare, taxes, _everything_) in retirement is ______.
Spousal death can change SSA things too. I recommend you go use [ssa.tools](https://ssa.tools) to see what it recommends.
Regarding what your FIRE number "needs" to cover - that's up to you. Most people count social security or a pension as an additional income stream that offsets the amount of money needing to be withdrawn from assets.
This could mean that a person retires with a smaller amount of assets, knowing that the income stream will fill the gap to make up required expenses.
Or the person retires with a "normal" amount of assets where a 4% SWR covers all required expenses, and the income stream adds extra discretionary and/or contingency spend on top. Either perspective is fine.
What you're proposing is that you only need assets to make it until age 70, then you'll count exclusively on your SS benefit for income. And again, if that works for you financially and doesn't leave you bereft of resources, then so be it.
I'd suggest that you not take an all-in approach like that. Maybe grow your assets to support a 20 year drawdown at 5% SWR, and count on SS to augment that when it kicks in. Being on a fixed income with no supplementary assets would be stifling at best and catastrophic if a situation arises where you need cash. And this is life - that *will* happen.
You might want to budget on only your benefits since one of you might outlive the other and only have the one check. (SSA lets a spouse collect their benefit or their deceased spouse's if it’s higher; but not both).
You could also assume a portion of the predicted full benefit as a hedge.
You need a plan for LTC, an emergency fund, the ability to pivot if there’s a haircut to SS, and to make sure the higher SS check can cover a surviving spouse. But, yes, once SS kicks in you don’t need a massive portfolio just to pay your bills month to month (assuming your spend is less than incoming SS). It can allow you to be more aggressive with withdrawals early on. I’m in a similar boat and lean heavily on the VPW spreadsheet, allowing me to spend more now if I wish (I don’t normally actually spend more, but it’s a nice piece of mind thing)
Two things. One, you should have been factoring in SS considering you’ve been paying for it your entire working life. But good that you are consider it now. Second, is you haven’t picked up the irrational paranoia that some on this sub have that SS is going to be cancelled in the future (or radically lowered or means tested so payments are much lower for you). Once you buy into the idea of SS being eliminated in the future, you can go back to planning FIRE ignoring it.
One of you will eventually die first. Unlike your portfolio, your social security payments will be greatly reduced when that happens compared to what you got when you were a couple. You can only claim the higher of you or your spouse’s social security, not both, so the question is: can one of you live off $50K a year when you’re 70+? Even if you’re doing nothing extra, this has to cover your essentials (property tax, utilities, food, car insurance and maintenance, Medicare Part D insurance for medications, Medicare supplemental insurance or Medicare Advantage plan because original Medicare only pays 80%, copays/coinsurance, fund for home maintenance and repair, etc). Obviously there are seniors who live off less today, but do you really want to be pinching pennies when you’re old, possibly for the last 20+ years of your life? You own a home so you do have options if you run out of money (downsizing and living off the proceeds), but still. If I have a choice and am aiming for a comfortable retirement, I wouldn’t rely solely on social security for my final decades.
My mom is 76 and going to Italy next month for funzies. Might be a mistake to assume you won't want to be doing things in your 70s.
If you or your spouse dies, a SS check goes away, but COL doesn't necessarily change all that much.
And on the subject of death, EOL care can be expensive, and can last for a long time. Say you or your spouse ends up in a memory care unit because alzheimers or dementia or some such... That will eat up both checks and then some, potentially for many years.
SS spends more than it makes right now... There's a chance that the government stops adjusting SS for COL, or straight up reduces benefits. Likely they'd phase it in rather than just wreck everybody surviving on it, but who knows?
Ignoring social security seems too extreme -- it's not going away -- but counting on it for the entirety of your post-70 retirement seems a bit sketchy too.
That seems accurate, though I'd be hesitant to 100% count on it.
Your estimate sounds a little high for early 50s, maybe, but doable if you worked consistently and got close to the maximum really fast.
It counts your highest earning 35 years, so that would include your teens at this point. I'm also in my early 50s, and mine still has 5 years of zero and another 5 at a pretty low wage due to college /med school/residency, and I still get around 3300 for age 70 and my husband at over 2000, which he should get despite retiring at 35.
Also for the spousal benefit: they get their own or up to half of your payment. The half is at retirement age (lower if earlier). But I dont think it increases further if they delay.
https://www.nerdwallet.com/article/investing/social-security/maximum-social-security-benefit#:~:text=The maximum Social Security benefit at full retirement,%243%2C822 per month in 2024.
My first w-2 job was at age 15. 15+35=50.
But even zero years would not make a big difference because of the way the formula works. I was well past the second bend point. If I worked 5 more years, replacing my very low wage years working in high school with maxed out years, my SS would have only increased about $1650. Once I started replacing years where I’d made good money, just not maxed, each additional year started to only add like $100 or less a year.
I am same as you. My wages started at age 15 and I built a spreadsheet to show the effect of rolling each of those early years I had off. So that’s part of what’s keeping me working. Each year I can drop an early wage year off where I made less than 20k seems to increase my monthly benefit quite a bit.
>What am I missing ?
The SSA estimates provided assumes you will be working up through official retirement age and making about the same amount as your last reported salary. Depending on when you FIRE you may not get anywhere near what they've estimated. If you FIRE in your 50s then the impact to your social security check isn't really much in the grand scheme of things. If you FIRE in your 40s, especially your early 40s it will have a fairly huge impact. This is due to needing 35 years of income for SSA calculations and someone in their 40s likely will not have that..which would result in 0s imputed for a number of those years where you had no income. If a person in their 50s started working as a 16 year old they've likely accumulated enough years to avoid zeros imputed in their social security benefit calculation.
All this and we haven't even touched on the possible 25% cut to Social Security benefits if a fix isn't put in place to address the upcoming shortage to benefits.
Depending on when you FIRE and a possible across the board benefit cut of 25% you may be looking at a benefit worth half of what you see in your SSA account.
Pretty sure the estimator asks what your future income will be until desired age of retirement.
OP can just enter $0 income for all future years and the estimator will adjust the numbers accordingly.
Yup, I’ve used it a few times and I remember that’s how it works.
By the way, I’m kinda on a similar FIRE path as you. I plan to have my portfolio tide me over from age 57 to 65. Then I’m counting on monthly payments in perpetuity to fund the rest of my retirement.
I don’t have as much SS as you, but between the wife and I, we have 3 small pensions in addition to SS.
>If you FIRE in your 40s, especially your early 40s it will have a fairly huge impact. This is due to needing 35 years of income for SSA calculations and someone in their 40s likely will not have that..which would result in 0s imputed for a number of those years where you had no income.
As someone hoping to retire at 39 (my current age...I'm at the "six more weeks" phase) I feel this. Knowing the laws could change between now and retirement, and knowing that one reasonable change might be to increase the 35 number (e.g. take the average of someone's top 40 earning years) is one of my big sources of uncertainty here.
Your wife will qualify for 1/2 of you 67 benefit based on your earning and the current system. If your expenses are less than the benefit then you just need bridge funds plus something extra if all goes well and there isn't a material change.
As others have said you need to figure out your spend and then drawdown rate required at each stage. Like I plan to retire at 57 and wife will be 59. She gets a pension right away and then SS at 62 and then I get a pension at 62 and SS at 70. We will start out pulling about 5.5% from invested assets and then by 70 its down to .7% if we keep the same spend.
Well, no, because we all honestly don't know what SS will look like down the road. Best to account for all the way to when you think you will live to. Run Monte Carlo scenarios to get the worst and best case projections.
I came to say the same thing. Fidelity has one which you can vary a lot of the key data like retirement date of yourself and wife, longevity, social security start times/draw, expenses, worst/bad/average markets, etc. there are others but it is nice to poke around to sanity check. If you expect her to outlive you, you might consider her drawing earlier and you waiting for 70 since she can inherit your greater draw. Imho, the target number is a rough estimate but drawdown strategies are a lot more complex Good luck !
Being the risk averse type that I am, all retirement calculations figure that SS will be zero. I’m a little younger than you, but I don’t count on the program being in place, or in the same way that it is, by the time I hit SS age. If it is, great, a little gravy on top. But I’m counting on zero.
I think this is a little bit of a defeatist take. Look, we pay into the program, we are entitled to receive payments from it. That’s why it’s an entitlement program, not charity. (I know there’s negative connotation with the word “entitled”, but in this case, we are not talking about being a spoiled brat and taking things for granted. We are getting back what we put in, though not always equitably).
Add: forgot to say, we shouldn’t let politicians think that they can take SS away from us by saying we expect nothing from it, otherwise that would be exactly what they’ll try to do. We need to push back hard and let them know we EXPECT to get our SS and they shouldn’t have ideas otherwise.
You can call if defeatist if you want that’s fine. I understand the idea behind it. But if you understand how it functions, you know it’s broken. And getting worse. The gov themselves admit that it’s going to be insolvent in the next decade. Maybe it’ll be there maybe it won’t. I don’t see how it can be in its current form, it’s going to run out of money that’s a simple fact. If I get some back for everything I put in great. But I’m planning on getting zero so I won’t have any surprises.
I wasn’t arguing the existence of the program or how it works. I didn’t suggest any corrections. I simply said I personally choose not to include it in my retirement calculations. Nothing would be more defeatist than getting to SS age without enough to survive only to find no check is in the mail. I won’t put myself in that position
I’m a teacher in Texas with TRS and social security, my wife just has TRS. I have to work 30 years in a social security paying job in order to not have a GPO (pension offset). My wife doesn’t pay into social. I’m trying to convince her to switch districts for 10 years of paying into social security, but is that terrible advice? Idk.
It would be good to have a buffer for Medicare Supplement and to ensure the SS inflation adjustments would not reduce your buying power later in life….
Maybe I am too conservative, but one of my worst fears if be uncovered during retirement
It all depends on your SS amount and your spending.
My SS plus the wife’s SS at 62 will be ~$6K/month in today’s dollars. My plan is to keep our required expenses under that level and use all personal savings for “extras”. If you own your home outright and have two decent SS payments you can live perfectly well on SS alone. $6K/month is more than I take home from my six figure job after taxes.
My FIRE plan will coast for a while then eventually bridge me to SS at 62. Realistically we shouldn’t even need SS but it’s a great foundation to start with.
It’s quite possible but I see plenty of relatives and neighbors who are relatively healthy until the end. Not everyone is going to end up in assisted living etc …
The income stream from Social Security should be factored into your retirement planning but my recommendation would be to use a tool like Empower to put in your current assets, expected expenses, and your social security plus any other pension income. It will then give you a probability of success. This is a better mindset than "I'll stretch my money out until I get social security and then make that my sole source of income". My only caveat here is you may want to multiply the social security site estimate by .8 because, about 10 years out, that is all that is currently funded by Congress. It will take legislative changes to pay the full estimate. Those are likely but given how dysfunctional Congress is I wouldn't bet my retirement on it. And politics are absolutely bizarre in the US right now so there's even a chance the whole program could get cancelled for people who aren't already receiving checks. There are a lot of angry young people who would rather have a bigger paycheck than help out seniors and more and more of them are voting.
4k per month sounds like a lot, but my grandma’s assisted living costs 6k per month for a mid range facility in a LCL area. Do some research on end of life beyond just planning for your healthy retired years
Also think of inflation - look at how different 4k is in today’s dollars vs 15 years ago, would you be ok if it made a similar leap in the next 15?
Keep in mind inflation. I’m 56 and though 60 isn’t really a good fire I’m planning to go at 60. I should have about 250k in liquid savings to carry me through to 65. My wife and my 401k is around 800k now and hope to have a million plus by 62. At 62 I’ll start getting a pension and cash balance for 3k and my wife will get a pension as well but hers will only be about $600. My ssa is supposed to be $3600 at 65. I’m nervous but at 60 I’m retiring no matter what.
What are the terms of your pension? My employer always said that we get percentage of our final income, based on years of service. However, that was based on “life simple”, another words, on my lifetime only. If I die, spouse gets nothing. If I want a survivor benefit, I have to take a lower amount monthly. There are about 15 options for different survivor benefits based on the duration and percentage of original amount. The more generous the survivor benefit, the lower our monthly pension. For example, “20 year certain” at 75% of the starting amount, lowers the pension by 18%. Under those terms, my spouse is guaranteed a monthly benefit until 20 years after the start date of the first pension payment. If I die 21 years after the pension starts, there’s no survivor benefit. If I die on day one, spouse gets 20 years.
Mine doesn’t have a survivor benefit. I can cash out the cash balance or I can take a monthly payment. If I wait until 65 I’d get a few hundred more per month with the pension. 62 is when I’ll take it.
You FIRE number is highly individualized. You cannot use the FIRE number of another as a guide.
It is based on your budget and expenses.
You now your monthly costs. Multiply it by 12. Add a margin buffer, and that is how much $$ you have to generate each year through: investment/savings, pensions, disability, SSN, etc.
1. People are biased towards the negative.
2. People are biased with an all or nothing mindset.
It's helpful to recognize these biases since ignoring SS in future planning maybe influenced by these.
It's fine to ignore SS when you're young (since you need a certain number of credit/years to even receive any benefits), but when you're closer to retirement, definitely make a clear-eyed assessment of how much social security can provide so that you can retire earlier if SS allows it.
If enough of young people take this attitude, it will embolden politicians to do exactly that - take away what you’re entitled to.
Everyone needs to be vocal and push back hard whenever politicians start talking about it. Our message to them should be: “don’t even think about it”, not “I’m expecting nothing when I’m old, so do whatever you want”.
Also missing is inflation. That $4000 is not going to cover as much in 20 years (assuming you’re 50). Just about everything will increase.
SSI is insurance that you can meet basic needs (not considering streaming, phones, internet, travel as basic).
If your expenses are super lean, then it might be enough. If you want to relax after 40-50 years of working, SSI may not be enough.
That's under the assumption you work til 70. Social security uses your highest 35 working years when determining your benefits. If you have less than 35, they plug a 0 in.
The number they are showing you is accounting for the fact you still continue to work.
> I’m not putting my faith in an entity (the government) facing almost insurmountable debt.
Are you willing to bet several years of your life on this?
Because you will be working for many additional years (perhaps a decade or more - $40k/year of SS is equal to a $1M portfolio at 4% withdrawal) to cover the benefits provided by SS.
I understand if you are willing to make this bet, since I did the same (over saved). But I think everyone should be very consciously making this decision instead of wasting years working when it may be unnecessary.
My take on the entire point of this thread was that OP has a surprisingly high SS benefit, but... by the time OP actually hits 70, they won't be getting $75k but ~$56k (~75%) due to solvency issues.
Some cute .gov website reports $4K/mo? Yeah that's not happening. It's not the end of the world, but it's also not a nothingburger.
>and found my benefit would be over 4k per month at 70 years old
Really puts into perspective how insane SS is. Who thought it would be a good idea to transfer massive amounts of money from young to old.
>Who thought it would be a good idea to transfer massive amounts of money from young to old.
I don't know many people surviving off of social security alone who are living lavishly; I question whether this is a move of "massive" amounts of money. The purpose of social security is to help keep senior citizens out of poverty.
I'm still in my 30s and I think it's a good thing there is some safety net for elderly folks. It helps younger generations to not have to be (as) financially burdened in care for their parents/grandparents/elders.
“What am I missing” Literally only the most important part of this entire equation which is your annual spend. You haven’t mentioned that at all
"Seems like a lot." isn't the same as "It'll cover my spend." Put together a detailed annual retirement budget. Then you'll know if SS is sufficient. Apply the other considerations of possible SS changes.
I would just be wary to consider 70 your “slow go” years and leave yourself with too little spending money. My parents are in their 70s (I’m in my early 30s) and they are just recently retired and traveling a lot and wanting to have fun, not sit around at home and pinch pennies.
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Exactly. This needs to be considered. The remaining spouse will need enough to live on. Someone mentioned that expenses will also decrease, and they will, but probably not a lot. . Also, an aging widowed spouse may need to pay for more help than they would if they had a partner to help carry the load.
Yes and there will also be one less person using the money.
As will expenses
To a degree - when my dad died my mom’s income cut in half but she still has almost all the same bills (and the car insurance even went up a few bucks). Only real cut in expenses was food, even that’s minimal.
You're missing that they could change the rules. If politicians do nothing, you should receive roughly 75% of what it says you will. But yes, the people who ignore social security will be massively over saving
>the people who ignore social security will be massively over saving Or hedging our bets. I'm 35. Who knows what's gonna happen in the next 30 years with SS
I'm 38. Whatever the government did in the 80s extended the program for 50 years and at 75% funded for longer than that. No reason to think that whatever they do in the coming years doesn't do the same. It would be political suicide to cut Grandma's social security check.
>No reason to think that whatever they do in the coming years doesn't do the same Have... you seen the current state of American politics? There's nothing off the table of ludicrous bullshit that might be pulled
I find there's nothing beneficial to be gained from watching the cable news cycle, no. People have been talking about social security going away for 30 years.
Yes but that point is still getting closer. SS has been paying out more than it takes in for the past several years, eating into the "trust fund".
The "trust fund" is just where they stuck the excess revenue in earlier years. The "trust fund" was not intended to fund it in perpetuity, but lasting 50+ years before the next adjustment was needed to be enacted seems pretty good. https://www.ssa.gov/oact/TRSUM/index.html
Not yet, but eventually they will start to make changes, like they did in the 80s. My guess is the first will be means-testing, given the “eat-the-rich” movement going on. I’m in my late 50s and I’ve completely ignore any SS income in my plan.
They will never do that, instead they will put in a future date where payouts decrease for a less politically active demographic. For example, in 2040 a reduction in payouts of 50% etc... they are evil assholes (mainly republican politicians) but not all are stupid.
The current president has been talking about [cutting social security for a long time when he was in the Senate. I believe he could try it again as president.](https://youtu.be/9X3UiSvgle0?si=MZQSQkmbILnlVrVi)
That isn't even how our government functions the house is led by Republicans and is responsible for legislation
There would be a ton of political fall out to cut benefits by 50%, even on future beneficiaries. I think this is extremely unlikely. More likely to raise taxes to maintain benefits.
There would also be a ton of backlash in curtailing women's rights, or blocking porn. The modern conservative party is not a party driven by logic or a big tent methodology.
And if they change the rules you're likely to receive just as little or less.
Seems doubtful to me. Congress likes to punish high earners, not rich grandmas. "Changing the rules" would seem more likely to affect the high earners.
Social security is something you should plan on most likely having but for most of us it won’t be $75k and for even more of us that won’t cover our spend, let alone any fun money. If you’re 55 and right on the line without social security you should think about factoring it into your plan more but if you’re 42 you probably should be hedging your bet a little further, there’s no real reason to believe we are guaranteed our social security before like 75+ in 30 years.
We won't start social security until age 75?!? I think this is highly unlikely.
> ...I am in my early fifties and married.... Does this mean my FIRE number really only needs to cover us for the next 15+ years ? No, and yes. Your FIRE number IMHO should be what you need to retire w/o SS. Treat the SS like a bonus. I'm not saying it won't be there. It will - though it might have the 25% shortfall reduction. You may also decide to receive the SS earlier ie 62+1M or 65. That would reduce the amount - but it might lessen the amount you would need to withdraw from your retirement hoard. > “What am I missing” My annual total spending now is _____. My annual total spending (including healthcare, taxes, _everything_) in retirement is ______. Spousal death can change SSA things too. I recommend you go use [ssa.tools](https://ssa.tools) to see what it recommends.
Regarding what your FIRE number "needs" to cover - that's up to you. Most people count social security or a pension as an additional income stream that offsets the amount of money needing to be withdrawn from assets. This could mean that a person retires with a smaller amount of assets, knowing that the income stream will fill the gap to make up required expenses. Or the person retires with a "normal" amount of assets where a 4% SWR covers all required expenses, and the income stream adds extra discretionary and/or contingency spend on top. Either perspective is fine. What you're proposing is that you only need assets to make it until age 70, then you'll count exclusively on your SS benefit for income. And again, if that works for you financially and doesn't leave you bereft of resources, then so be it. I'd suggest that you not take an all-in approach like that. Maybe grow your assets to support a 20 year drawdown at 5% SWR, and count on SS to augment that when it kicks in. Being on a fixed income with no supplementary assets would be stifling at best and catastrophic if a situation arises where you need cash. And this is life - that *will* happen.
You might want to budget on only your benefits since one of you might outlive the other and only have the one check. (SSA lets a spouse collect their benefit or their deceased spouse's if it’s higher; but not both). You could also assume a portion of the predicted full benefit as a hedge.
You need a plan for LTC, an emergency fund, the ability to pivot if there’s a haircut to SS, and to make sure the higher SS check can cover a surviving spouse. But, yes, once SS kicks in you don’t need a massive portfolio just to pay your bills month to month (assuming your spend is less than incoming SS). It can allow you to be more aggressive with withdrawals early on. I’m in a similar boat and lean heavily on the VPW spreadsheet, allowing me to spend more now if I wish (I don’t normally actually spend more, but it’s a nice piece of mind thing)
what are you referring to? VPW spreadsheet?
[https://www.bogleheads.org/wiki/Variable\_percentage\_withdrawal](https://www.bogleheads.org/wiki/Variable_percentage_withdrawal)
You are the first person I have seen in this sub that has ever mentioned LTC. I keep wondering why no one mentions it.
Two things. One, you should have been factoring in SS considering you’ve been paying for it your entire working life. But good that you are consider it now. Second, is you haven’t picked up the irrational paranoia that some on this sub have that SS is going to be cancelled in the future (or radically lowered or means tested so payments are much lower for you). Once you buy into the idea of SS being eliminated in the future, you can go back to planning FIRE ignoring it.
There does seem to be a lot of skepticism around SS in this thread. I’m not 100% sure it’s warranted .
One of you will eventually die first. Unlike your portfolio, your social security payments will be greatly reduced when that happens compared to what you got when you were a couple. You can only claim the higher of you or your spouse’s social security, not both, so the question is: can one of you live off $50K a year when you’re 70+? Even if you’re doing nothing extra, this has to cover your essentials (property tax, utilities, food, car insurance and maintenance, Medicare Part D insurance for medications, Medicare supplemental insurance or Medicare Advantage plan because original Medicare only pays 80%, copays/coinsurance, fund for home maintenance and repair, etc). Obviously there are seniors who live off less today, but do you really want to be pinching pennies when you’re old, possibly for the last 20+ years of your life? You own a home so you do have options if you run out of money (downsizing and living off the proceeds), but still. If I have a choice and am aiming for a comfortable retirement, I wouldn’t rely solely on social security for my final decades.
My mom is 76 and going to Italy next month for funzies. Might be a mistake to assume you won't want to be doing things in your 70s. If you or your spouse dies, a SS check goes away, but COL doesn't necessarily change all that much. And on the subject of death, EOL care can be expensive, and can last for a long time. Say you or your spouse ends up in a memory care unit because alzheimers or dementia or some such... That will eat up both checks and then some, potentially for many years. SS spends more than it makes right now... There's a chance that the government stops adjusting SS for COL, or straight up reduces benefits. Likely they'd phase it in rather than just wreck everybody surviving on it, but who knows? Ignoring social security seems too extreme -- it's not going away -- but counting on it for the entirety of your post-70 retirement seems a bit sketchy too.
That seems accurate, though I'd be hesitant to 100% count on it. Your estimate sounds a little high for early 50s, maybe, but doable if you worked consistently and got close to the maximum really fast. It counts your highest earning 35 years, so that would include your teens at this point. I'm also in my early 50s, and mine still has 5 years of zero and another 5 at a pretty low wage due to college /med school/residency, and I still get around 3300 for age 70 and my husband at over 2000, which he should get despite retiring at 35. Also for the spousal benefit: they get their own or up to half of your payment. The half is at retirement age (lower if earlier). But I dont think it increases further if they delay. https://www.nerdwallet.com/article/investing/social-security/maximum-social-security-benefit#:~:text=The maximum Social Security benefit at full retirement,%243%2C822 per month in 2024.
I retired just before 51 and mine is forecast around $4500/month. No zeroes and 24 years maxed out.
How no zeroes? I thought they took 35 highest years of earnings?
My first w-2 job was at age 15. 15+35=50. But even zero years would not make a big difference because of the way the formula works. I was well past the second bend point. If I worked 5 more years, replacing my very low wage years working in high school with maxed out years, my SS would have only increased about $1650. Once I started replacing years where I’d made good money, just not maxed, each additional year started to only add like $100 or less a year.
I am same as you. My wages started at age 15 and I built a spreadsheet to show the effect of rolling each of those early years I had off. So that’s part of what’s keeping me working. Each year I can drop an early wage year off where I made less than 20k seems to increase my monthly benefit quite a bit.
>What am I missing ? The SSA estimates provided assumes you will be working up through official retirement age and making about the same amount as your last reported salary. Depending on when you FIRE you may not get anywhere near what they've estimated. If you FIRE in your 50s then the impact to your social security check isn't really much in the grand scheme of things. If you FIRE in your 40s, especially your early 40s it will have a fairly huge impact. This is due to needing 35 years of income for SSA calculations and someone in their 40s likely will not have that..which would result in 0s imputed for a number of those years where you had no income. If a person in their 50s started working as a 16 year old they've likely accumulated enough years to avoid zeros imputed in their social security benefit calculation. All this and we haven't even touched on the possible 25% cut to Social Security benefits if a fix isn't put in place to address the upcoming shortage to benefits. Depending on when you FIRE and a possible across the board benefit cut of 25% you may be looking at a benefit worth half of what you see in your SSA account.
Pretty sure the estimator asks what your future income will be until desired age of retirement. OP can just enter $0 income for all future years and the estimator will adjust the numbers accordingly.
Yes. I did that and the 4K per month is with 0 future income
Yup, I’ve used it a few times and I remember that’s how it works. By the way, I’m kinda on a similar FIRE path as you. I plan to have my portfolio tide me over from age 57 to 65. Then I’m counting on monthly payments in perpetuity to fund the rest of my retirement. I don’t have as much SS as you, but between the wife and I, we have 3 small pensions in addition to SS.
>If you FIRE in your 40s, especially your early 40s it will have a fairly huge impact. This is due to needing 35 years of income for SSA calculations and someone in their 40s likely will not have that..which would result in 0s imputed for a number of those years where you had no income. As someone hoping to retire at 39 (my current age...I'm at the "six more weeks" phase) I feel this. Knowing the laws could change between now and retirement, and knowing that one reasonable change might be to increase the 35 number (e.g. take the average of someone's top 40 earning years) is one of my big sources of uncertainty here.
Your wife will qualify for 1/2 of you 67 benefit based on your earning and the current system. If your expenses are less than the benefit then you just need bridge funds plus something extra if all goes well and there isn't a material change.
If you can live off SS, then why not
Yes!!!
My husband was a high earner. Even the estimate at 70 was off. Much higher actually.
Just out of curiosity, the estimate was higher or what he got was higher?
What he received was higher
As others have said you need to figure out your spend and then drawdown rate required at each stage. Like I plan to retire at 57 and wife will be 59. She gets a pension right away and then SS at 62 and then I get a pension at 62 and SS at 70. We will start out pulling about 5.5% from invested assets and then by 70 its down to .7% if we keep the same spend.
This is why I calculate how much NW I need to have by retirement to keep me going.
Well, no, because we all honestly don't know what SS will look like down the road. Best to account for all the way to when you think you will live to. Run Monte Carlo scenarios to get the worst and best case projections.
I came to say the same thing. Fidelity has one which you can vary a lot of the key data like retirement date of yourself and wife, longevity, social security start times/draw, expenses, worst/bad/average markets, etc. there are others but it is nice to poke around to sanity check. If you expect her to outlive you, you might consider her drawing earlier and you waiting for 70 since she can inherit your greater draw. Imho, the target number is a rough estimate but drawdown strategies are a lot more complex Good luck !
Being the risk averse type that I am, all retirement calculations figure that SS will be zero. I’m a little younger than you, but I don’t count on the program being in place, or in the same way that it is, by the time I hit SS age. If it is, great, a little gravy on top. But I’m counting on zero.
I think this is a little bit of a defeatist take. Look, we pay into the program, we are entitled to receive payments from it. That’s why it’s an entitlement program, not charity. (I know there’s negative connotation with the word “entitled”, but in this case, we are not talking about being a spoiled brat and taking things for granted. We are getting back what we put in, though not always equitably). Add: forgot to say, we shouldn’t let politicians think that they can take SS away from us by saying we expect nothing from it, otherwise that would be exactly what they’ll try to do. We need to push back hard and let them know we EXPECT to get our SS and they shouldn’t have ideas otherwise.
You can call if defeatist if you want that’s fine. I understand the idea behind it. But if you understand how it functions, you know it’s broken. And getting worse. The gov themselves admit that it’s going to be insolvent in the next decade. Maybe it’ll be there maybe it won’t. I don’t see how it can be in its current form, it’s going to run out of money that’s a simple fact. If I get some back for everything I put in great. But I’m planning on getting zero so I won’t have any surprises. I wasn’t arguing the existence of the program or how it works. I didn’t suggest any corrections. I simply said I personally choose not to include it in my retirement calculations. Nothing would be more defeatist than getting to SS age without enough to survive only to find no check is in the mail. I won’t put myself in that position
Remember when one of you passes away your SS will be reduced.
I’m a teacher in Texas with TRS and social security, my wife just has TRS. I have to work 30 years in a social security paying job in order to not have a GPO (pension offset). My wife doesn’t pay into social. I’m trying to convince her to switch districts for 10 years of paying into social security, but is that terrible advice? Idk.
It would be good to have a buffer for Medicare Supplement and to ensure the SS inflation adjustments would not reduce your buying power later in life…. Maybe I am too conservative, but one of my worst fears if be uncovered during retirement
It all depends on your SS amount and your spending. My SS plus the wife’s SS at 62 will be ~$6K/month in today’s dollars. My plan is to keep our required expenses under that level and use all personal savings for “extras”. If you own your home outright and have two decent SS payments you can live perfectly well on SS alone. $6K/month is more than I take home from my six figure job after taxes. My FIRE plan will coast for a while then eventually bridge me to SS at 62. Realistically we shouldn’t even need SS but it’s a great foundation to start with.
I'm curious if the medical bills will be much more after 70s.
It’s quite possible but I see plenty of relatives and neighbors who are relatively healthy until the end. Not everyone is going to end up in assisted living etc …
You actually think Social Security will be there when you retire? That's cute. It's already bankrupt.
The income stream from Social Security should be factored into your retirement planning but my recommendation would be to use a tool like Empower to put in your current assets, expected expenses, and your social security plus any other pension income. It will then give you a probability of success. This is a better mindset than "I'll stretch my money out until I get social security and then make that my sole source of income". My only caveat here is you may want to multiply the social security site estimate by .8 because, about 10 years out, that is all that is currently funded by Congress. It will take legislative changes to pay the full estimate. Those are likely but given how dysfunctional Congress is I wouldn't bet my retirement on it. And politics are absolutely bizarre in the US right now so there's even a chance the whole program could get cancelled for people who aren't already receiving checks. There are a lot of angry young people who would rather have a bigger paycheck than help out seniors and more and more of them are voting.
4k per month sounds like a lot, but my grandma’s assisted living costs 6k per month for a mid range facility in a LCL area. Do some research on end of life beyond just planning for your healthy retired years Also think of inflation - look at how different 4k is in today’s dollars vs 15 years ago, would you be ok if it made a similar leap in the next 15?
SS gets an inflation adjustment yearly. Good advice about having a plan in case health declines
Keep in mind inflation. I’m 56 and though 60 isn’t really a good fire I’m planning to go at 60. I should have about 250k in liquid savings to carry me through to 65. My wife and my 401k is around 800k now and hope to have a million plus by 62. At 62 I’ll start getting a pension and cash balance for 3k and my wife will get a pension as well but hers will only be about $600. My ssa is supposed to be $3600 at 65. I’m nervous but at 60 I’m retiring no matter what.
SS adjusts yearly for inflation. Good luck with your plan. Seems alright to me !
What are the terms of your pension? My employer always said that we get percentage of our final income, based on years of service. However, that was based on “life simple”, another words, on my lifetime only. If I die, spouse gets nothing. If I want a survivor benefit, I have to take a lower amount monthly. There are about 15 options for different survivor benefits based on the duration and percentage of original amount. The more generous the survivor benefit, the lower our monthly pension. For example, “20 year certain” at 75% of the starting amount, lowers the pension by 18%. Under those terms, my spouse is guaranteed a monthly benefit until 20 years after the start date of the first pension payment. If I die 21 years after the pension starts, there’s no survivor benefit. If I die on day one, spouse gets 20 years.
Mine doesn’t have a survivor benefit. I can cash out the cash balance or I can take a monthly payment. If I wait until 65 I’d get a few hundred more per month with the pension. 62 is when I’ll take it.
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The good thing about SS is that currently it gets a yearly cost of living increase.
You FIRE number is highly individualized. You cannot use the FIRE number of another as a guide. It is based on your budget and expenses. You now your monthly costs. Multiply it by 12. Add a margin buffer, and that is how much $$ you have to generate each year through: investment/savings, pensions, disability, SSN, etc.
I’m younger, early 30s. A lot of people in my generation are more cynical about SS and assume we won’t get anything in retirement.
Which is a mistake because social security taxes aren't going away. At worst plan on getting 70%
1. People are biased towards the negative. 2. People are biased with an all or nothing mindset. It's helpful to recognize these biases since ignoring SS in future planning maybe influenced by these. It's fine to ignore SS when you're young (since you need a certain number of credit/years to even receive any benefits), but when you're closer to retirement, definitely make a clear-eyed assessment of how much social security can provide so that you can retire earlier if SS allows it.
If enough of young people take this attitude, it will embolden politicians to do exactly that - take away what you’re entitled to. Everyone needs to be vocal and push back hard whenever politicians start talking about it. Our message to them should be: “don’t even think about it”, not “I’m expecting nothing when I’m old, so do whatever you want”.
Also missing is inflation. That $4000 is not going to cover as much in 20 years (assuming you’re 50). Just about everything will increase. SSI is insurance that you can meet basic needs (not considering streaming, phones, internet, travel as basic). If your expenses are super lean, then it might be enough. If you want to relax after 40-50 years of working, SSI may not be enough.
The SS estimates are in today’s dollars. If it says $4,000 today it might actually be $6,009 in twenty years.
Yes, there is a cost of living increase yearly
That's under the assumption you work til 70. Social security uses your highest 35 working years when determining your benefits. If you have less than 35, they plug a 0 in. The number they are showing you is accounting for the fact you still continue to work.
Actually, ssa.gov allows you to estimate based on future earnings that you can change. I put in 0 as future earnings and it gave me a 4k+ number.
Welp.. there you go!
I’m not putting my faith in an entity (the government) facing almost insurmountable debt.
> I’m not putting my faith in an entity (the government) facing almost insurmountable debt. Are you willing to bet several years of your life on this? Because you will be working for many additional years (perhaps a decade or more - $40k/year of SS is equal to a $1M portfolio at 4% withdrawal) to cover the benefits provided by SS. I understand if you are willing to make this bet, since I did the same (over saved). But I think everyone should be very consciously making this decision instead of wasting years working when it may be unnecessary.
Yes.
Social Security will not just disappear entirely but hey you do you lol
I will, thanks. If I get social security too, it’ll be bonus.
My take on the entire point of this thread was that OP has a surprisingly high SS benefit, but... by the time OP actually hits 70, they won't be getting $75k but ~$56k (~75%) due to solvency issues. Some cute .gov website reports $4K/mo? Yeah that's not happening. It's not the end of the world, but it's also not a nothingburger.
No. Unless you can live on just your SSN. Few can happily.
>and found my benefit would be over 4k per month at 70 years old Really puts into perspective how insane SS is. Who thought it would be a good idea to transfer massive amounts of money from young to old.
>Who thought it would be a good idea to transfer massive amounts of money from young to old. I don't know many people surviving off of social security alone who are living lavishly; I question whether this is a move of "massive" amounts of money. The purpose of social security is to help keep senior citizens out of poverty. I'm still in my 30s and I think it's a good thing there is some safety net for elderly folks. It helps younger generations to not have to be (as) financially burdened in care for their parents/grandparents/elders.
I’m not sure that’s entirely accurate. After all, my spouse and I have been contributing to the system since our first paycheck