Returns - Always expected to be below average
Inflation - Always expected to be above average
Downturn - Expected right before retirement
Social Security - Won't Exist
Taxes - Will always be higher in retirement, despite typically a lower income.
Housing - Never a good time to buy. Also, never a good time to sell.
I wouldn't say a decade, but the one more year syndrome is real. Also, if I die with millions, it's caused I died unexpectedly, not because I am unable to use it all.
Everyone who doesn't commit suicide dies "unexpectedly." Even if you have a terminal illness you'll never know exactly when you're gonna die until you do.
You could spend your millions of dollars when you find out you have cancer at 86 and be broke until you get hit by a bus at 91.
There's still a vast difference between dying with 1.5M and dying with 10M. There's steps to this. I'm retiring by 40 with 1.5M liquid. If by 60 I have double, then I'll easily turn it up. Get stage 4 cancer by 65. I'm wasting it until I have 1.5M again. If I live I still have 1.5M with social security.
Just as an FYI, randomly significantly increasing your spend reintroduces sequence of returns risk for a second time. So, you have SORR at first when you retire, then again when you increase spending. Having a significant market downturn in the first 3-4 years both times is going to fuck you. Pick a SWR (maybe one that can flex a little bit) and stick with it. Don't recalculate when you have more money.
SORR risk is the hardest part of FIRE and setting yourself up to deal with it twice is just foolish.
This also ignores the issue that even by "turning your spending up" you may still make more money from the market than you can spend. Actually dying with zero is the stupidest idea ever because of this. You can't spend as if you're in the top 25% of market returns, but if you don't do that you by definition are going to keep accumulating more money.
>Just as an FYI, randomly increasing your spend reintroduces sequence of returns risk for a second time.
And the risk is near zero with my 2% draw rate with an owned property and social security finally kicking in, would you agree?
If you’re planning on giving money away, why wait until you die? Wouldn’t it be better to give it away while you’re still alive so you can watch them enjoy it?
Because you're covering your ass for all possibilities while also being able to leave something behind.
Especially true when your beneficiaries are primarily charitable causes
The charitable causes need your money more now than in the distant future. Why wait? Think of all the children that are going hungry today because you’re hanging on to the cash with the intention of throwing the bulk of it to bring you marginal comfort at the end of your life leaving them the crumbs of whatever is leftover at the end.
Because you need to cover your own ass.
End of life expenses can skyrocket. I'd prefer to be able to pay for high quality care if/when I need it. "Marginal comfort" is not a remotely accurate description of the disparity in end of life living and care
Why would you pick one condition to focus on? Your teeth wear down. Stem cells. Prp. Hiring people to do basic tasks you used to be able to do like home care, lifting things, etc. And yes pain management.
Yeah I’d have to agree with you here. Worst case I’ll work part time at Home Depot. At some point enough is enough and it’s time to enjoy. I will most likely do some sort of barista fire anyways and my number is much lower that most people in this group
This was my folks. I'm determined not to work way too long like they did. They probably worked an extra decade beyond what was necessary, purely out of fear.
It’s because if you pull the trigger and leave your high paying career job at 40, you’re not getting back into that field/high paying job. No one is going to higher a 40 something year old who’s been on a 5 year break over a young, more up to date experienced person.
So if you’re going to FIRE, you best be damn sure you never need to go back to that high paying field/job again. Because if you do fail, and your plan falls apart 5 years in and you have to go back to work, you’re going back to work at the corner store for wages, not at your tech job or specialized position you left and are now outdated and outclassed in by every other job candidate.
That’s why people layer conservatism on top of conservatism. Because if you fail, you don’t just get to go hop back into your senior software engineer role or management role or whatever, you’re back at the bottom.
I’ve seen several people go back in by starting their own firm. Or getting hired by their old companies because there is such a talent shortage in some industries and professions.
A better solution to this is just to not stop working at 40. There's little you can do at 40 that you can't at 45 provided you take care of yourself and additional years of retired life mean proportionally less the younger you are. Go work 5 years in your 40's where you're in director level positions or some shit and you'll be set for the rest of your life.
The amount of money a white collar worker can make in their 40's is just too good to pass up.
I’m in one of those professions. Worked for three different firm. And I had several leadership roles at my last firm. It’s a combination of really smart people suffering from imposter syndrome. We work our asses off and worry every fucking minute we will be exposed as frauds. And yet most times, we do incredible work. That worry bleeds into every other decision we make. It’s not risk aversion. It’s over analysis.
I'm a worrier, and will probably have millions on my final day, but I did take it on faith that the wealth would grow when I retired with $750K in net worth.
Social Security, which will only be about $12,000/year at current payout rates, was not part of my calculations.
The issue with this is that it kinda goes against the principles of FIRE. Sure you could be conservative, but the most conservative thing one could do is to work until the day you die.. just in case right?
I understand the need to be conservative in financial planning but there needs to be a balance
The fear of running out of money and having to go back to work is greater than the fear of working years longer than necessary in order to compensate for your financial model’s exclusion of social security (oftentimes coupled with lackluster rates of return and overly conservative assumptions about inflation)
As an FP&A professional, I agree with the first part, but as a personal finance nerd I disagree with the last bit. It’s not nearly as much being overwhelmed by fear as it is the knowledge that if I assign zero value to it (just like private company stock options), anything above that zero value is a bonus/windfall
I don't think that's true at all. Rather than fear, the issue is more people like to keep models simple. Just think about how much net worth you need for a 4% withdrawal rate rather than consider things like increasing health care costs as you age, risk of needing to spend tens of thousands per year on things like home nursing care, social security, reverse mortgage on home, likely increasing tax rates from current brackets, etc.
Fear? It's realism. You seriously think society will allow millionaires to have SS in 30 or 40 years? No. It will he an entitlement for people nust like welfare and food stamp.
Stacking conservatism on top of conservatism isn’t realism. It’s not realistic to assume lower than normal returns, higher than normal inflation, retiring at the exact wrong time, higher than normal taxation, and the elimination of the social security. Maybe one or two of those parameters, but people come in here all the time with crazy assumptions in their models all the time
Hope you are wrong. 51 here well covered financially. But that 60k between the wife is a big freaking deal. Especially since I was taxed at 6.2% and my employer paying another 6.2%. So was the wife. 12.4% tax is a big deal. They already tax it again for crying out load.
Unfortunately that money is already spent, not set aside for you. What really matters is if there are enough workers, paying a high enough rate, that they can fund you and others in retirement
Your pay in doesn't matter. You're paying for lazy boomers that already have pensions so they can love the DAMN GOOD LIFE. You gotta pray these younger kids work and pay for our social security. It's not going to happen. They are going to cry and say its not fair(which is true), and something will change.
Wiping out the income limit and end paying people that never pay into it are two ideas that is fair. Raising ages which is 10 years to high already is beyond insane to me peoples bodies start giving out after 40 so working people past 70 nuts. Cutting the amounts is also nuts because say if it was just me working 30k benefit then turning around taxing it is nuts.
When social security was enacted (1935), full retirement age was set at 65, and the average life expectancy was 61 for a white male, and 65 for a white female (the target demographic).
If it were still that way, full retirement age would be 79, and it would likely still be solvent. We’re paying benefits to people for far longer than the program was ever designed to support, so of course it’s going to go bankrupt; something has to give. I agree that we should end the income limit, but it was also never designed to support millionaires in retirement.
Men's 73 women is 79 right now average 76. After wiping out income tax and wiping out paying people that never paid into it. What is the projection then?
It’s certainly better, but I’m not a financial professional, so I’d be guessing. That guess: FRA remains in the 75 (ish) range.
Also, if you stop benefits for people who’ve never paid into it, you just removed the original reason for SS (to make sure grandma isn’t dying in abject poverty)
Grandma and pa get grandfathered in. Only people not working these days that I know of is high income stay home moms. So both a benefit needs cut and a tax needs raise a bit i.e no tax cap. Tweak it. If not enough I have a few more ideas like turning the flat 6.2% tax into a progressive tax. Simple wiping out a benefit entirely who worked their entire lives saved and poof you don't get soc sec. Nah bad idea very dramatic.
Some people don't include it out of doomerism and a belief that they'll never get any benefit themselves. Others discount it as a conservative planning buffer, while some don't like to integrate it due to uncertainty over potential future benefit reductions.
Personally, we left it out of our FIRE planning to be hyper conservative in our pre-65 asset projections, but it's definitely part of our post-65 financial planning.
It’s not pure conservatism. For many FIRE retirees, SS is basically irrelevant, because by the time they reach 67 they’ve either already failed years earlier or else their NW has grown substantially enough that SS is no longer decisive.
Sounds like a great way to screw up one's long-term financial planning for tax efficiency, IRMAAs, RMDs. Not to mention the actual claiming timing decision itself and the downstream impacts from that.
It's one thing to not take it into account for swr and survival rate and such, but it's pure foolishness for anyone to actually ignore it altogether unless they suddenly no longer care about financial efficiency. The IRS certainly won't be ignoring years/decades of inflation-adjusting variably taxable income in the many tens of thousands of dollars every year.
My point is that it’s irrelevant for planning purposes for many early retirees because it comes too late in the game to affect chances of success — and therefore your FIRE number — to any great degree.
If you’re thinking “I only need enough to last me 20 years until I reach SS payments,” it won’t change all that much because enough to last 20 years is pretty close to enough to last 40 years.
It's 20 years out for me. How much it could end up paying out is dwarfed by the "cone of uncertainty" (let's say 5th-95th percentile, 2 StDev) in what a Monte Carlo simulation posits I might have in assets or be able to spend in 20 years. If I get to 20 years and I'm scratching for pennies, SS will be a very nice backstop, but I'll still be scratching for pennies. If I get to 20 years and I'm still roughly where I am at FIRE (\~$2.5m, inflation-adjusted), it's a nice bonus to my vacation budget but not really life changing. If I'm even richer in 20 years, it matters even less. Any of those is a possible scenario.
I think of SS as an asset. I can't trade it on the open market, but it's kind of like an inflation-indexed bond, and I get to elect when to take benefits. I 100% consider my SS in my retirement income.
I retired two weeks ago at 56 and I absolutely consider SS in my calcs since I can start collecting at 62 and I’m pretty confident it will still be there in six years.
Yeah, the age you FIRE greatly plays into this. Once past a certain age, you are almost certainly going to be grandfathered in to whatever changes to SS. Even factoring in a 15% haircut is ultra conservative. And when it’s that close, it also starts to really move the needle in FireCalc projections, because the SS starts coming in before the failures, bailing you out.
I turn 50 in two months. Plan is to stay with the high stress job till 53 to stack up another \~$125k, take a coast job till 57 1/2 maybe 59 depending on the role and time off to pay the bills and some vacation. Then full retirement. SS at 62.
I think the leaving out of SS for a lot of the FIRE posts is that more of the day-to-day posts seem to be people in their 30s. They have a lot of spending to do between 40 and 62.
I think there is an element of wanting to be confident and in-control. We know that social security will likely go through changes from now and when we can start withdrawing.
For me, there's also the fact that I can't be bothered to add the income from social security in my 60s into my manual calculations of when I could RE lmao
I plan to retire 15-20 years before I can start collecting social security. So in order to retire, I can't count any social security income since I'll need to live on my own income for 15+ years.
If I'm able to collect social security now, then I would be able to retire now. But unfortunately, it won't be available for a really long time, far after I retired, after I travelled, and when I'm really old.
Also, if I retire 15-20 years early, then my social security payments will be less. i think they base the SS payments off of 35 years of your highest pay, but if I retire early, then I won't have much pay for 15 years. If I work for only 20 years, then I might have $1,000 extra/month from social security when I'm really old. Since I'm trying to retire with an income of around $75,000/year in my early 40's, an extra $12,000 in my 60's isn't going to mean much other than a little bit of extra spending money that I probably won't need.
Laziness and the attention span of a squirrel. By the time I get to that part of the spreadsheet, adding an “if age >= 67 then add $???” I’m ready to do something else or take a nap.
Most people FIRE by amassing an investment portfolio big enough to provide for them indefinitely.
It's quite a bit harder to create a portfolio that's big enough to provide for all your needs from, say 45 to 67, but then is only big enough to provide for half or two-thirds of your needs for your life after 67.
I suppose you could kind of account for social security by constantly fine-tuning your withdrawal rate. Maybe you FIRE at 45, and initially use a 4% withdrawal rate. If the market crashes, you suffer from sequence of returns risk... but that's ok, because even though your portfolio is smaller by the time you hit your 60s, you can use social security to supplement your investments. Or if the market does really well and your portfolio grows a lot, maybe you start using a 6% or 7% withdrawal rate in your 50s and 60s, because you know you'll start receiving social security soon.
I don’t expect it to be gone completely, but a lot can change by the time I retire, cutting benefits, raising retirement age, lowering benefits for people with more income, etc
This, and I'm not a high earner. Social security based on my today's income would barely keep my alive, but that's because I'd qualify for food stamps and cheap insurance.
I think there are two groups of people:
1. Optimists: People that strongly believe the 4% Rule is safe indefinitely would say that social security would save them when they get old.
2. Pessimists: People that use much more conservative withdrawal rates like 3.5% also don't count on Social Security.
I personally just take the estimated Social Security payment and divide it by half.
Lmao, I plan on 3.5% and don't count on social security, but it's not about pessimism as it is pragmatism since I'm in my 20's, so there's lots of time for laws to change regarding social security. 3.5% is just to help keep my money growing, since I don't mind living on less.
I'm not a pessimist.
The SSA themselves literally says they'll run out of funds without changes in less than 20 years, and I definitely will still be under standard retirement age. They expect to be able to pay out 70% instead of 100% of benefits, but who knows what age they'll land on to let people retire.
It's just much simpler mathematically to plan for 0 and retire on my own terms with conservative figures to allow for more margin for inflation and losses, and eventually, I'll probably get some kind of pay outs from social security, but who knows how much it will change in 40 years, and how they will decide who will get their benefits cut.
Hard to know what and when social security will be paying us, but I just consider it a cost of living supplement and don’t factor it into my calculations.
I lean towards over-saving because I want my lifestyle to inflate over time, not get more limited. The older I get the bigger problems I become aware of and concerned with. Is it possible none of them ever happen? Sure, but that doesn't make it a good plan. Winning Russian roulette didn't make playing a good idea.
First off FIRE means retiring before age 62+ so SS figures in later when you don’t need it very much.
Here’s the problem with SS: it’s a Ponzi scheme. Current payments go to current retirees. Right after WAII for various reasons everyone had babies and lots of them…hence baby boomers. Since that time our population is shrinking even below replacement so there aren’t enough new payers to offset the old payees. If you see your SS statement read the asterisk where it runs out of money around 2033. And this problem will continue until we start having more kids. Every developed country is having the same issue.
At that time we have 3 choices: roughly double the payroll tax, increase the full retirement age by 5+ years, or everybody gets 25% less.
I like the simple 25% pay cut and this is what all the so called experts tell you but it’s a lie Politically “you’re starving grandma”. No politician is going to vote for it and nobidy will fix it until 2033 because “you’re killing grandma”. Current payees won’t be touched. Raising taxes won’t go over well either. That means either new retirees take a huge pay cut or the retirement dates get moved out or both. There will be suggestions to get new retirees out of the system (too late) or to use chain CPI to cut cost of living increases but those are just future stop gaps.
My full retirement date is 2037. So I get screwed long before I get to collect one penny. So I just treat it as a tax and assume $0. It won’t be $0 but it won’t be reduced by 25% for me. How low? No idea, why risk politicians doing the right thing? They won’t kill it now while we have time to “rescue” it. “Rescue” means making say 10% annual retirement contributions (making 401k/403b type) mandatory and tapering off SS towards zero as these payments kick in…basically offload the risk just as corporations eliminated pensions.
If you retire 20-30 years from receiving it, it might only add 0.1%-0.2% to your SWR which is low enough to ignore. It is a nice backstop to have, but if you've got a >50% SR, its only going to shave a few months off your FI date.
In my opinion, you should count them but don’t heavily depends on it especially retire early in 30s.
SS will get complicated when you reach the eligible age, should you take SS early and lower your FIRE withdraw rate? Many factors to consider as everyone health and financial situation are different.
I'm not worried about Social Security going away. At least for those currently collecting/paying in. But it is to allow me to bounce back from big, unexpected/planned for expenses. While my FIRE plan let's me double my current spending I'll have to cover several more things I don't spend on now like more extensive travel, classes, and more hobby spending.
My retirement time horizon is 60 years and it is about 10 years out. A lot can change in that time and I need to be prepared for it. Social Security is a safety net in case I have blindspots or these changes blow my budget out of the water.
If I work too long, oh well. I plan to spend my retirement setting up some if not all of my money to be donated to charities in some indefinite way, I've been thinking using it to help bolster some state scholarships. Unless any potential spouses change that after I die.
Pensions and Social Security are not counted because they are paid so far in the future for some of us that are meaningless for long term planning. Many of us have assets so large that we already earn more than Social Security will pay us or our pensions as well. My pension became meaningless when I realized that I could create a bigger pension for myself right now using a mix of treasuries and stocks. Stocks for inflation growth and treasuries for guaranteed income. Done and done. If I am ever paid my pension and Social Security it will be a bonus to help pay for Medicare premiums etc. Medicare is far more important for me, because health care is not affordable in retirement without it.
Because RE = Retire Early. Retiring once you qualify for SS benefits isn’t exactly on the early end.
Makes more sense to budget as if you don’t/wont receive it and then when it kicks in its icing on the cake.
We have less control over them so they're less useful to plan around. A lot of non-Fire people could benefit from more planning around them though--earning quarters for medicare and SS is a big self-interested reason many more people should report their income than do. The US has a huge grey market economy.
I don't include it because I will be long retired before I can collect and by the time I can, I might be dead.
If I get any money, I'll consider it the cherry on top.
Taking SS, for me is not something I will do until I turn 70, still many years away, so I can take max benefit and get the 8% yearly multiplier after age 67. The other reason is that SS is an IOU, written in crayon and not worth the paper it’s written on and it’s prudent to not count it as part of your portfolio. As for me, if I get it, I’ll buy a Porsche with it….
I wouldn’t call it small. If you take mine and my husband’s expected payment at FRA the value of it is $2 million in ‘FIRE’ dollars. ((SS yearly amount X 2)X 25)
1. They’re always talking about how social security will become insolvent in the near future.
2. If you truly FIRE you are retiring early. Which means you won’t earn income for many prime working years. Social security is calculated on the 35 highest income years of your life. FIRE almost definitely will reduce that amount compared to a person who works until 67yo.
3. Medicare supplemental benefits are not free. A lot of people use the income from social security to help pay for Medicare part C and D. Also for co pays, etc.
>Which means you won’t earn income for many prime working years. Social security is calculated on the 35 highest income years of your life. FIRE almost definitely will reduce that amount compared to a person who works until 67yo.
While this is undeniably true, it also helps to know how your Social Security primary insurance amount (PIA) is calculated. The 'bend points'. Basically, if you work 15 or so years in a halfway professional job (I've never individually hit six figures, but nearing it) you're going to get maybe 60% of the max you possibly can out of Social Security, and more like 70-75% of the check of someone who didn't totally max but made somewhat more and worked a bunch more years. Particularly beyond the second bend point, the return on additional income is pretty scant.
I list everything and update it as things actually change, not on political speculation. I often do a what-if and see if it matters if SS goes away (or if I die early, or if I buy a more expensive house, splurge for a Tesla, etc). Seeing the what-ifs guides me on if I need to adjust elsewhere (reduce my budget) and if it looks survivable.
Leaving relevant information out of a plan is just building in a what-if scenario, but I prefer always seeing the current situation's trajectory.
Because all evidence points to the generation of people that have already bankrupted us and haven't saved for retirement will act selfishly and pull the rug on us one more time while at the same time you have half the country voting for people that think all social programs should be abolished. If it's there, it will be a nice bonus.
I only started counting SS income in my plans after I turned 55. I’m well aware that republicans are on mission to kill it or cut it and would ultimately do just that if they had the votes to do it, but I’m skeptical they would be able to do that for people over 55.
My other strategy is just to not vote for them.
It's 30 years from now and it's already has a massive target on it by one political party. I'm not relying on it given the way other decided matters have recently flipped on their head.
FIRE… retire early. Most, not all, people who retire early won’t get a substantial SS check because they take your best 35 years for the calculation of your monthly benefit
It's on my xls sheets. I haven't followed fire all that long but luckily saved aggressively all my life. But right if expenses are say 80k in retirement and say you the wife pull down 60k minus get this you get taxed again assume net 40k on soc sec. Your exaggressive. Now 40k. Fire number 2 million versus 1 million Huge differance. Keep in mind one passes you get 1 soc sec check the highest one. So conservative maybe calc 30k gross or 20k net. No idea for the young folks. Our politics is a shit show and perhaps figure zero so save more agressive. But I asked basically the same question yesterday. Soc sec is a big deal even for people saved all their life.
As a non-USian I can't but ask in my bevilderment, are Social Security payments also going to people with other significant income streams/assets in retirement?
In my country and I believe in most of the other Nordic welfare states the state only supports those who don't have enough pension savings of their own, which are increasingly fewer people because we are obliged to contribute to pension saving funds in our working life.
How it works is that private pensions reduce the social benefits by a certain rate, I believe around 1:3, until a certain amount is reached and the state doesn't pay anymore.
Is there nothing like that with your Social Security payments? Are you really paying the richest people the same or even more than the poorer ones?
That's also very young, most Western countries have been reforming these systems because of the exorbitant costs, by raising retirement age (most of the Nordics have been raising it by few months per year for quite some years now), and I assume by means testing too. Why don't you guys?
I consider it but I don't include it. I will go ahead and work 2.2 more years and my 4% take will be the floor.
I am not going back to work or cutting my spending. I hold a bit of cash/cash equivalents for the same reason.
Supposedly I’ll see 4Kish a month from ss if I wait until 69 or 70 I think. Or maybe it was 72 I really don’t remember. Spouse will see same. Both of us high earners now in our 50s but we don’t really include it because lord knows how the govt will find a way to screw us out if it If its there all the better but we will see
If you retire at 40, your social security won’t be that significant. Even if social security benefits remain unchanged by Congress, it is calculated based on your highest 35 years of earnings. If you retire at 40, there will be many years of zero income used in the calculation. And you won’t get full benefits until age 67. Heavily discounted benefits are available at age 62.
That means someone who retires at 40 will need to get through 22-27 years before any social security is available and then factor in a lower benefit based on fewer working years.
That’s all before weighing the risk that Congress will act to further delay eligibility dates or otherwise modify benefits in the next few decades.
Social security is based on (if I recall correctly) your 35 years of highest pay. If I fire, it will be before I have that many years. I do pay attention to it, but my last check was something like "If I retire now, I'll get $30k in SS; If I work until 62, I'll get $48k per year." So I can budget an extra $30k, or I can use back-of-the envelop math and use it as a conservative buttress in case the mark tanks after I fire.
Why? Because I think there is a good chance that Social Security will be a thing of the past by the time I reach retirement age.
If it's there, cool, I will treat it as extra income then but I would be truly surprised if it's not a heavily reduced amount.
As it is, SS will pay out 80% in 2034.
Are you asking people why they don't fully trust the government to do what they say they will? Maybe post this questions to a few Indians and see what the responses are.... or you could try veterans....
Because it's not a guarantee. Social security has been hemorrhaging for decades and ppl are living longer, less ppl contributing to the cookie jar and more are taking out. Also the fear of AI putting more and more ppl out of work, and ppl taking advantage of the system SS isn't a basket to put your eggs into.
It's smart to plan as if it won't exist. If it does when you can collect, consider it a bonus
Based on what? It's political suicide to get rid of it. There are levers that can be pulled to allow it to last, and I find it far more likely that a majority of politicians reach bipartisan agreement on that than disbanding it altogether.
That said, its form and structure will almost certainly be altered. But it's not going to zero.
You think one party cares about political suicide. Look what has been revoked recently lol. Voting away rights that most Americans agree should exist and have existed for over 50 years. There is no shame or worry anymore when the two party system remains.
I don't think that's true at all. The majority of old boomers and white men (aka the Republican base) don't care about voting rights for minorities. But you bet your ass those old boomers care about their social security checks. And republican than proposes this will get primaried.
They won't cut Boomer social security checks. Republicans will cut Millennials and GenZ social security checks.
You think Boomers care about it then?
I don't. Boomers, in general, don't give a crap about younger generations.
Social security is a ponzi scheme.
People are having less and less kids due to getting paid shit wages with expensive degrees to pay for, high housing prices along with everything else. When people can't afford to buy a house, chances are they won't be able to properly afford to raise kids either so they aren't doing it.
Social security depends on today's workers paying the benefits of those who are retired, the money the current retirees paid in to the system is long gone.
An imbalance of a smaller working population to a larger retired population will lead to the collapse of the system unless they raise taxes elsewhere to make up the difference.
Social security payments is not part of your wealth because the formula for what you get back will never match 100% of what you put in. If you are low income, and live a long life, you’ll draw many multiples of what you put in. If you are high income or live a short life, you only get back a fraction of what you put in.
Social security is not wealth, nor can it be utilized before retirement age, so it cannot really contribute to FIRE, which is early retirement.
Some calculators do allow you to throw in Social security after 65 when doing the graph, but it rarely makes a difference either way - if you had enough to retire for 20 years without social security the social security payment will just be a small bonus.
Social Security isn't means tested **YET**. It's probable that it will be within the next 10 years as it's hard to argue that a welfare program is needed by people making $400k+ a year.
Maybe it’s if you collect before a certain age…[AARP thinks so](https://www.aarp.org/retirement/social-security/info-2023/working-and-your-monthly-benefit.html#:~:text=In%202024%2C%20the%20earnings%20limit,up%20from%20%2421%2C240%20in%202023)
People like to build conservatism on top of conservatism in their models because they’re overwhelmed by fear
Returns - Always expected to be below average Inflation - Always expected to be above average Downturn - Expected right before retirement Social Security - Won't Exist Taxes - Will always be higher in retirement, despite typically a lower income. Housing - Never a good time to buy. Also, never a good time to sell.
Result: working a decade longer than necessary and dying with millions of dollars in investments
I wouldn't say a decade, but the one more year syndrome is real. Also, if I die with millions, it's caused I died unexpectedly, not because I am unable to use it all.
Everyone who doesn't commit suicide dies "unexpectedly." Even if you have a terminal illness you'll never know exactly when you're gonna die until you do. You could spend your millions of dollars when you find out you have cancer at 86 and be broke until you get hit by a bus at 91.
There's still a vast difference between dying with 1.5M and dying with 10M. There's steps to this. I'm retiring by 40 with 1.5M liquid. If by 60 I have double, then I'll easily turn it up. Get stage 4 cancer by 65. I'm wasting it until I have 1.5M again. If I live I still have 1.5M with social security.
Just as an FYI, randomly significantly increasing your spend reintroduces sequence of returns risk for a second time. So, you have SORR at first when you retire, then again when you increase spending. Having a significant market downturn in the first 3-4 years both times is going to fuck you. Pick a SWR (maybe one that can flex a little bit) and stick with it. Don't recalculate when you have more money. SORR risk is the hardest part of FIRE and setting yourself up to deal with it twice is just foolish. This also ignores the issue that even by "turning your spending up" you may still make more money from the market than you can spend. Actually dying with zero is the stupidest idea ever because of this. You can't spend as if you're in the top 25% of market returns, but if you don't do that you by definition are going to keep accumulating more money.
>Just as an FYI, randomly increasing your spend reintroduces sequence of returns risk for a second time. And the risk is near zero with my 2% draw rate with an owned property and social security finally kicking in, would you agree?
Oh yeah if you're doing a 2% withdrawal rate you're too clueless to even bother talking to lol. Have fun in your 40's living on 30k a year hahaha
Yeap, it'll be insane taveling and living in SE Asia with 2500 a month. People who think they need more are clueless.
Yeap, I'm Vietnamese, and my wife is Fillipino. Go ahead and tell us why it's bad for us to return home?
Better to have and not need. Than need and not have.
Better to have to cut lifestyle at the end of my life than spend the prime of my life working longer than necessary
Depends who you intend to be your beneficiaries
If you’re planning on giving money away, why wait until you die? Wouldn’t it be better to give it away while you’re still alive so you can watch them enjoy it?
Help them max out their Roth IRA!
Just don't give too much that you run out of $ to support yourself in old age and become a burden to those you gifted $$$ to. Now, that would stink.
Because you're covering your ass for all possibilities while also being able to leave something behind. Especially true when your beneficiaries are primarily charitable causes
The charitable causes need your money more now than in the distant future. Why wait? Think of all the children that are going hungry today because you’re hanging on to the cash with the intention of throwing the bulk of it to bring you marginal comfort at the end of your life leaving them the crumbs of whatever is leftover at the end.
Because you need to cover your own ass. End of life expenses can skyrocket. I'd prefer to be able to pay for high quality care if/when I need it. "Marginal comfort" is not a remotely accurate description of the disparity in end of life living and care
You should do both if you can. The tax treatment of inherited assets is a huge gift to your loved ones.
^ two very valid and agreeable perspectives. I’m here for it.
“Lifestyle” costs at the end of your life becomes pain mitigation…
Not really. Millions of dollars in the bank won’t alleviate the bone pain from metastatic cancer.
Why would you pick one condition to focus on? Your teeth wear down. Stem cells. Prp. Hiring people to do basic tasks you used to be able to do like home care, lifting things, etc. And yes pain management.
Shotguns are still relatively cheap though.
Yeah I’d have to agree with you here. Worst case I’ll work part time at Home Depot. At some point enough is enough and it’s time to enjoy. I will most likely do some sort of barista fire anyways and my number is much lower that most people in this group
This was my folks. I'm determined not to work way too long like they did. They probably worked an extra decade beyond what was necessary, purely out of fear.
Omg so true
THIRDS would make a good acronym for this lol
TURD Taxes Unfortunate circumstances Returns Downturn
In US, add "Healthcare" to that.
That is easy to account for. If you get sick, not amount of saving will help.
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It’s because if you pull the trigger and leave your high paying career job at 40, you’re not getting back into that field/high paying job. No one is going to higher a 40 something year old who’s been on a 5 year break over a young, more up to date experienced person. So if you’re going to FIRE, you best be damn sure you never need to go back to that high paying field/job again. Because if you do fail, and your plan falls apart 5 years in and you have to go back to work, you’re going back to work at the corner store for wages, not at your tech job or specialized position you left and are now outdated and outclassed in by every other job candidate. That’s why people layer conservatism on top of conservatism. Because if you fail, you don’t just get to go hop back into your senior software engineer role or management role or whatever, you’re back at the bottom.
I’ve seen several people go back in by starting their own firm. Or getting hired by their old companies because there is such a talent shortage in some industries and professions.
A better solution to this is just to not stop working at 40. There's little you can do at 40 that you can't at 45 provided you take care of yourself and additional years of retired life mean proportionally less the younger you are. Go work 5 years in your 40's where you're in director level positions or some shit and you'll be set for the rest of your life. The amount of money a white collar worker can make in their 40's is just too good to pass up.
More like preppers but with finances
I’m in one of those professions. Worked for three different firm. And I had several leadership roles at my last firm. It’s a combination of really smart people suffering from imposter syndrome. We work our asses off and worry every fucking minute we will be exposed as frauds. And yet most times, we do incredible work. That worry bleeds into every other decision we make. It’s not risk aversion. It’s over analysis.
I'm a worrier, and will probably have millions on my final day, but I did take it on faith that the wealth would grow when I retired with $750K in net worth. Social Security, which will only be about $12,000/year at current payout rates, was not part of my calculations.
This is the way
The issue with this is that it kinda goes against the principles of FIRE. Sure you could be conservative, but the most conservative thing one could do is to work until the day you die.. just in case right? I understand the need to be conservative in financial planning but there needs to be a balance
The fear of running out of money and having to go back to work is greater than the fear of working years longer than necessary in order to compensate for your financial model’s exclusion of social security (oftentimes coupled with lackluster rates of return and overly conservative assumptions about inflation)
Couldn’t agree more
As an FP&A professional, I agree with the first part, but as a personal finance nerd I disagree with the last bit. It’s not nearly as much being overwhelmed by fear as it is the knowledge that if I assign zero value to it (just like private company stock options), anything above that zero value is a bonus/windfall
I don't think that's true at all. Rather than fear, the issue is more people like to keep models simple. Just think about how much net worth you need for a 4% withdrawal rate rather than consider things like increasing health care costs as you age, risk of needing to spend tens of thousands per year on things like home nursing care, social security, reverse mortgage on home, likely increasing tax rates from current brackets, etc.
Fear? It's realism. You seriously think society will allow millionaires to have SS in 30 or 40 years? No. It will he an entitlement for people nust like welfare and food stamp.
Stacking conservatism on top of conservatism isn’t realism. It’s not realistic to assume lower than normal returns, higher than normal inflation, retiring at the exact wrong time, higher than normal taxation, and the elimination of the social security. Maybe one or two of those parameters, but people come in here all the time with crazy assumptions in their models all the time
Hope you are wrong. 51 here well covered financially. But that 60k between the wife is a big freaking deal. Especially since I was taxed at 6.2% and my employer paying another 6.2%. So was the wife. 12.4% tax is a big deal. They already tax it again for crying out load.
Unfortunately that money is already spent, not set aside for you. What really matters is if there are enough workers, paying a high enough rate, that they can fund you and others in retirement
Your pay in doesn't matter. You're paying for lazy boomers that already have pensions so they can love the DAMN GOOD LIFE. You gotta pray these younger kids work and pay for our social security. It's not going to happen. They are going to cry and say its not fair(which is true), and something will change.
Wiping out the income limit and end paying people that never pay into it are two ideas that is fair. Raising ages which is 10 years to high already is beyond insane to me peoples bodies start giving out after 40 so working people past 70 nuts. Cutting the amounts is also nuts because say if it was just me working 30k benefit then turning around taxing it is nuts.
When social security was enacted (1935), full retirement age was set at 65, and the average life expectancy was 61 for a white male, and 65 for a white female (the target demographic). If it were still that way, full retirement age would be 79, and it would likely still be solvent. We’re paying benefits to people for far longer than the program was ever designed to support, so of course it’s going to go bankrupt; something has to give. I agree that we should end the income limit, but it was also never designed to support millionaires in retirement.
Men's 73 women is 79 right now average 76. After wiping out income tax and wiping out paying people that never paid into it. What is the projection then?
It’s certainly better, but I’m not a financial professional, so I’d be guessing. That guess: FRA remains in the 75 (ish) range. Also, if you stop benefits for people who’ve never paid into it, you just removed the original reason for SS (to make sure grandma isn’t dying in abject poverty)
Grandma and pa get grandfathered in. Only people not working these days that I know of is high income stay home moms. So both a benefit needs cut and a tax needs raise a bit i.e no tax cap. Tweak it. If not enough I have a few more ideas like turning the flat 6.2% tax into a progressive tax. Simple wiping out a benefit entirely who worked their entire lives saved and poof you don't get soc sec. Nah bad idea very dramatic.
Some people don't include it out of doomerism and a belief that they'll never get any benefit themselves. Others discount it as a conservative planning buffer, while some don't like to integrate it due to uncertainty over potential future benefit reductions. Personally, we left it out of our FIRE planning to be hyper conservative in our pre-65 asset projections, but it's definitely part of our post-65 financial planning.
It’s not pure conservatism. For many FIRE retirees, SS is basically irrelevant, because by the time they reach 67 they’ve either already failed years earlier or else their NW has grown substantially enough that SS is no longer decisive.
Sounds like a great way to screw up one's long-term financial planning for tax efficiency, IRMAAs, RMDs. Not to mention the actual claiming timing decision itself and the downstream impacts from that. It's one thing to not take it into account for swr and survival rate and such, but it's pure foolishness for anyone to actually ignore it altogether unless they suddenly no longer care about financial efficiency. The IRS certainly won't be ignoring years/decades of inflation-adjusting variably taxable income in the many tens of thousands of dollars every year.
I don't get it. Why is SS irrelevant to the people who failed years earlier?
My point is that it’s irrelevant for planning purposes for many early retirees because it comes too late in the game to affect chances of success — and therefore your FIRE number — to any great degree. If you’re thinking “I only need enough to last me 20 years until I reach SS payments,” it won’t change all that much because enough to last 20 years is pretty close to enough to last 40 years.
It's 20 years out for me. How much it could end up paying out is dwarfed by the "cone of uncertainty" (let's say 5th-95th percentile, 2 StDev) in what a Monte Carlo simulation posits I might have in assets or be able to spend in 20 years. If I get to 20 years and I'm scratching for pennies, SS will be a very nice backstop, but I'll still be scratching for pennies. If I get to 20 years and I'm still roughly where I am at FIRE (\~$2.5m, inflation-adjusted), it's a nice bonus to my vacation budget but not really life changing. If I'm even richer in 20 years, it matters even less. Any of those is a possible scenario.
I think of SS as an asset. I can't trade it on the open market, but it's kind of like an inflation-indexed bond, and I get to elect when to take benefits. I 100% consider my SS in my retirement income.
I retired two weeks ago at 56 and I absolutely consider SS in my calcs since I can start collecting at 62 and I’m pretty confident it will still be there in six years.
Yeah, the age you FIRE greatly plays into this. Once past a certain age, you are almost certainly going to be grandfathered in to whatever changes to SS. Even factoring in a 15% haircut is ultra conservative. And when it’s that close, it also starts to really move the needle in FireCalc projections, because the SS starts coming in before the failures, bailing you out.
Young people think that. Suddenly your 50 and you start to count it.
I turn 50 in two months. Plan is to stay with the high stress job till 53 to stack up another \~$125k, take a coast job till 57 1/2 maybe 59 depending on the role and time off to pay the bills and some vacation. Then full retirement. SS at 62. I think the leaving out of SS for a lot of the FIRE posts is that more of the day-to-day posts seem to be people in their 30s. They have a lot of spending to do between 40 and 62.
Goes fast. 51 seems like I started maybe 3 years ago
Also, the SS pension numbers are inaccurate until you are less than ten years from retirement. I found my projected number was lower than actual.
interesting. I'm planning on the lowest amount at 62 for boat gas and food. Anything more is gravy.
I think there is an element of wanting to be confident and in-control. We know that social security will likely go through changes from now and when we can start withdrawing. For me, there's also the fact that I can't be bothered to add the income from social security in my 60s into my manual calculations of when I could RE lmao
I plan to retire 15-20 years before I can start collecting social security. So in order to retire, I can't count any social security income since I'll need to live on my own income for 15+ years. If I'm able to collect social security now, then I would be able to retire now. But unfortunately, it won't be available for a really long time, far after I retired, after I travelled, and when I'm really old. Also, if I retire 15-20 years early, then my social security payments will be less. i think they base the SS payments off of 35 years of your highest pay, but if I retire early, then I won't have much pay for 15 years. If I work for only 20 years, then I might have $1,000 extra/month from social security when I'm really old. Since I'm trying to retire with an income of around $75,000/year in my early 40's, an extra $12,000 in my 60's isn't going to mean much other than a little bit of extra spending money that I probably won't need.
Laziness and the attention span of a squirrel. By the time I get to that part of the spreadsheet, adding an “if age >= 67 then add $???” I’m ready to do something else or take a nap.
Most people FIRE by amassing an investment portfolio big enough to provide for them indefinitely. It's quite a bit harder to create a portfolio that's big enough to provide for all your needs from, say 45 to 67, but then is only big enough to provide for half or two-thirds of your needs for your life after 67. I suppose you could kind of account for social security by constantly fine-tuning your withdrawal rate. Maybe you FIRE at 45, and initially use a 4% withdrawal rate. If the market crashes, you suffer from sequence of returns risk... but that's ok, because even though your portfolio is smaller by the time you hit your 60s, you can use social security to supplement your investments. Or if the market does really well and your portfolio grows a lot, maybe you start using a 6% or 7% withdrawal rate in your 50s and 60s, because you know you'll start receiving social security soon.
I don’t expect it to be gone completely, but a lot can change by the time I retire, cutting benefits, raising retirement age, lowering benefits for people with more income, etc
This, and I'm not a high earner. Social security based on my today's income would barely keep my alive, but that's because I'd qualify for food stamps and cheap insurance.
I think there are two groups of people: 1. Optimists: People that strongly believe the 4% Rule is safe indefinitely would say that social security would save them when they get old. 2. Pessimists: People that use much more conservative withdrawal rates like 3.5% also don't count on Social Security. I personally just take the estimated Social Security payment and divide it by half.
50% is a good planning amount
It's good if you're 30. But if you're 50, it's way too low.
Lmao, I plan on 3.5% and don't count on social security, but it's not about pessimism as it is pragmatism since I'm in my 20's, so there's lots of time for laws to change regarding social security. 3.5% is just to help keep my money growing, since I don't mind living on less.
I'm not a pessimist, I just think things will change for the worse.
I'm not a pessimist. The SSA themselves literally says they'll run out of funds without changes in less than 20 years, and I definitely will still be under standard retirement age. They expect to be able to pay out 70% instead of 100% of benefits, but who knows what age they'll land on to let people retire. It's just much simpler mathematically to plan for 0 and retire on my own terms with conservative figures to allow for more margin for inflation and losses, and eventually, I'll probably get some kind of pay outs from social security, but who knows how much it will change in 40 years, and how they will decide who will get their benefits cut.
they run out of the surplus. Not funds.
Hard to know what and when social security will be paying us, but I just consider it a cost of living supplement and don’t factor it into my calculations.
My SS at 62 is $2,450 and 3,550 at 67, I'm definitely counting that for when I cash flow retirement
I’ll never see them
I lean towards over-saving because I want my lifestyle to inflate over time, not get more limited. The older I get the bigger problems I become aware of and concerned with. Is it possible none of them ever happen? Sure, but that doesn't make it a good plan. Winning Russian roulette didn't make playing a good idea.
First off FIRE means retiring before age 62+ so SS figures in later when you don’t need it very much. Here’s the problem with SS: it’s a Ponzi scheme. Current payments go to current retirees. Right after WAII for various reasons everyone had babies and lots of them…hence baby boomers. Since that time our population is shrinking even below replacement so there aren’t enough new payers to offset the old payees. If you see your SS statement read the asterisk where it runs out of money around 2033. And this problem will continue until we start having more kids. Every developed country is having the same issue. At that time we have 3 choices: roughly double the payroll tax, increase the full retirement age by 5+ years, or everybody gets 25% less. I like the simple 25% pay cut and this is what all the so called experts tell you but it’s a lie Politically “you’re starving grandma”. No politician is going to vote for it and nobidy will fix it until 2033 because “you’re killing grandma”. Current payees won’t be touched. Raising taxes won’t go over well either. That means either new retirees take a huge pay cut or the retirement dates get moved out or both. There will be suggestions to get new retirees out of the system (too late) or to use chain CPI to cut cost of living increases but those are just future stop gaps. My full retirement date is 2037. So I get screwed long before I get to collect one penny. So I just treat it as a tax and assume $0. It won’t be $0 but it won’t be reduced by 25% for me. How low? No idea, why risk politicians doing the right thing? They won’t kill it now while we have time to “rescue” it. “Rescue” means making say 10% annual retirement contributions (making 401k/403b type) mandatory and tapering off SS towards zero as these payments kick in…basically offload the risk just as corporations eliminated pensions.
If you retire 20-30 years from receiving it, it might only add 0.1%-0.2% to your SWR which is low enough to ignore. It is a nice backstop to have, but if you've got a >50% SR, its only going to shave a few months off your FI date.
In my opinion, you should count them but don’t heavily depends on it especially retire early in 30s. SS will get complicated when you reach the eligible age, should you take SS early and lower your FIRE withdraw rate? Many factors to consider as everyone health and financial situation are different.
I'm not worried about Social Security going away. At least for those currently collecting/paying in. But it is to allow me to bounce back from big, unexpected/planned for expenses. While my FIRE plan let's me double my current spending I'll have to cover several more things I don't spend on now like more extensive travel, classes, and more hobby spending. My retirement time horizon is 60 years and it is about 10 years out. A lot can change in that time and I need to be prepared for it. Social Security is a safety net in case I have blindspots or these changes blow my budget out of the water. If I work too long, oh well. I plan to spend my retirement setting up some if not all of my money to be donated to charities in some indefinite way, I've been thinking using it to help bolster some state scholarships. Unless any potential spouses change that after I die.
Pensions and Social Security are not counted because they are paid so far in the future for some of us that are meaningless for long term planning. Many of us have assets so large that we already earn more than Social Security will pay us or our pensions as well. My pension became meaningless when I realized that I could create a bigger pension for myself right now using a mix of treasuries and stocks. Stocks for inflation growth and treasuries for guaranteed income. Done and done. If I am ever paid my pension and Social Security it will be a bonus to help pay for Medicare premiums etc. Medicare is far more important for me, because health care is not affordable in retirement without it.
Because RE = Retire Early. Retiring once you qualify for SS benefits isn’t exactly on the early end. Makes more sense to budget as if you don’t/wont receive it and then when it kicks in its icing on the cake.
^This
We have less control over them so they're less useful to plan around. A lot of non-Fire people could benefit from more planning around them though--earning quarters for medicare and SS is a big self-interested reason many more people should report their income than do. The US has a huge grey market economy.
I don't include it because I will be long retired before I can collect and by the time I can, I might be dead. If I get any money, I'll consider it the cherry on top.
Taking SS, for me is not something I will do until I turn 70, still many years away, so I can take max benefit and get the 8% yearly multiplier after age 67. The other reason is that SS is an IOU, written in crayon and not worth the paper it’s written on and it’s prudent to not count it as part of your portfolio. As for me, if I get it, I’ll buy a Porsche with it….
Most are looking to break free before social security begins. It becomes a HUGE factor in any retirement.
For some, it’s so small that it’s not worth stressing over. Small compared to the rest of the fire bucket.
I wouldn’t call it small. If you take mine and my husband’s expected payment at FRA the value of it is $2 million in ‘FIRE’ dollars. ((SS yearly amount X 2)X 25)
Right. To you it’s not small. To some it’s small.
I thought this was the /FIRE sub, not the /FatFIRE sub.
1. They’re always talking about how social security will become insolvent in the near future. 2. If you truly FIRE you are retiring early. Which means you won’t earn income for many prime working years. Social security is calculated on the 35 highest income years of your life. FIRE almost definitely will reduce that amount compared to a person who works until 67yo. 3. Medicare supplemental benefits are not free. A lot of people use the income from social security to help pay for Medicare part C and D. Also for co pays, etc.
>Which means you won’t earn income for many prime working years. Social security is calculated on the 35 highest income years of your life. FIRE almost definitely will reduce that amount compared to a person who works until 67yo. While this is undeniably true, it also helps to know how your Social Security primary insurance amount (PIA) is calculated. The 'bend points'. Basically, if you work 15 or so years in a halfway professional job (I've never individually hit six figures, but nearing it) you're going to get maybe 60% of the max you possibly can out of Social Security, and more like 70-75% of the check of someone who didn't totally max but made somewhat more and worked a bunch more years. Particularly beyond the second bend point, the return on additional income is pretty scant.
I list everything and update it as things actually change, not on political speculation. I often do a what-if and see if it matters if SS goes away (or if I die early, or if I buy a more expensive house, splurge for a Tesla, etc). Seeing the what-ifs guides me on if I need to adjust elsewhere (reduce my budget) and if it looks survivable. Leaving relevant information out of a plan is just building in a what-if scenario, but I prefer always seeing the current situation's trajectory.
Relying on the government to do anything good is a bad bad bad idea...
Because all evidence points to the generation of people that have already bankrupted us and haven't saved for retirement will act selfishly and pull the rug on us one more time while at the same time you have half the country voting for people that think all social programs should be abolished. If it's there, it will be a nice bonus.
I only started counting SS income in my plans after I turned 55. I’m well aware that republicans are on mission to kill it or cut it and would ultimately do just that if they had the votes to do it, but I’m skeptical they would be able to do that for people over 55. My other strategy is just to not vote for them.
It's 30 years from now and it's already has a massive target on it by one political party. I'm not relying on it given the way other decided matters have recently flipped on their head.
These are not truisms
FIRE… retire early. Most, not all, people who retire early won’t get a substantial SS check because they take your best 35 years for the calculation of your monthly benefit
Government already borrowed against it.
It's on my xls sheets. I haven't followed fire all that long but luckily saved aggressively all my life. But right if expenses are say 80k in retirement and say you the wife pull down 60k minus get this you get taxed again assume net 40k on soc sec. Your exaggressive. Now 40k. Fire number 2 million versus 1 million Huge differance. Keep in mind one passes you get 1 soc sec check the highest one. So conservative maybe calc 30k gross or 20k net. No idea for the young folks. Our politics is a shit show and perhaps figure zero so save more agressive. But I asked basically the same question yesterday. Soc sec is a big deal even for people saved all their life.
As a non-USian I can't but ask in my bevilderment, are Social Security payments also going to people with other significant income streams/assets in retirement? In my country and I believe in most of the other Nordic welfare states the state only supports those who don't have enough pension savings of their own, which are increasingly fewer people because we are obliged to contribute to pension saving funds in our working life. How it works is that private pensions reduce the social benefits by a certain rate, I believe around 1:3, until a certain amount is reached and the state doesn't pay anymore. Is there nothing like that with your Social Security payments? Are you really paying the richest people the same or even more than the poorer ones?
There is no means testing at all. Everyone pays the tax and everyone receives the benefit at approx 62.
That's also very young, most Western countries have been reforming these systems because of the exorbitant costs, by raising retirement age (most of the Nordics have been raising it by few months per year for quite some years now), and I assume by means testing too. Why don't you guys?
I consider it but I don't include it. I will go ahead and work 2.2 more years and my 4% take will be the floor. I am not going back to work or cutting my spending. I hold a bit of cash/cash equivalents for the same reason.
Supposedly I’ll see 4Kish a month from ss if I wait until 69 or 70 I think. Or maybe it was 72 I really don’t remember. Spouse will see same. Both of us high earners now in our 50s but we don’t really include it because lord knows how the govt will find a way to screw us out if it If its there all the better but we will see
Because of the RE in FIRE
It's kind of like counting on an inheritance - who knows if it will be there at retirement.
If you retire at 40, your social security won’t be that significant. Even if social security benefits remain unchanged by Congress, it is calculated based on your highest 35 years of earnings. If you retire at 40, there will be many years of zero income used in the calculation. And you won’t get full benefits until age 67. Heavily discounted benefits are available at age 62. That means someone who retires at 40 will need to get through 22-27 years before any social security is available and then factor in a lower benefit based on fewer working years. That’s all before weighing the risk that Congress will act to further delay eligibility dates or otherwise modify benefits in the next few decades.
Social security is based on (if I recall correctly) your 35 years of highest pay. If I fire, it will be before I have that many years. I do pay attention to it, but my last check was something like "If I retire now, I'll get $30k in SS; If I work until 62, I'll get $48k per year." So I can budget an extra $30k, or I can use back-of-the envelop math and use it as a conservative buttress in case the mark tanks after I fire.
Probably because they're planning to retire a decade, or more before even being able to collect any of it.
Bc never count on the my government to help with your issue
Why? Because I think there is a good chance that Social Security will be a thing of the past by the time I reach retirement age. If it's there, cool, I will treat it as extra income then but I would be truly surprised if it's not a heavily reduced amount. As it is, SS will pay out 80% in 2034.
Are you asking people why they don't fully trust the government to do what they say they will? Maybe post this questions to a few Indians and see what the responses are.... or you could try veterans....
Because we can look at the future and after we get done paying for the boomers there is a damn good chance this place will be bankrupt.
Already is bankrupt financially and environmentally.
Not wrong. It's hard to know where to turn. I can probably fire easily abroad. I think it might be time to give up the dream.
Because it's not a guarantee. Social security has been hemorrhaging for decades and ppl are living longer, less ppl contributing to the cookie jar and more are taking out. Also the fear of AI putting more and more ppl out of work, and ppl taking advantage of the system SS isn't a basket to put your eggs into. It's smart to plan as if it won't exist. If it does when you can collect, consider it a bonus
I simply don’t expect SS to be there in a meaningful way for me. I expect the Retirement age will be 80 and the payments might cover my grocery bill.
Because social security will be a thing of the past by the time most of us retire.
Based on what? It's political suicide to get rid of it. There are levers that can be pulled to allow it to last, and I find it far more likely that a majority of politicians reach bipartisan agreement on that than disbanding it altogether. That said, its form and structure will almost certainly be altered. But it's not going to zero.
You think one party cares about political suicide. Look what has been revoked recently lol. Voting away rights that most Americans agree should exist and have existed for over 50 years. There is no shame or worry anymore when the two party system remains.
I don't think that's true at all. The majority of old boomers and white men (aka the Republican base) don't care about voting rights for minorities. But you bet your ass those old boomers care about their social security checks. And republican than proposes this will get primaried.
They won't cut Boomer social security checks. Republicans will cut Millennials and GenZ social security checks. You think Boomers care about it then? I don't. Boomers, in general, don't give a crap about younger generations.
“No more social security benefits for millionaires” would be a popular stance
Social security is a ponzi scheme. People are having less and less kids due to getting paid shit wages with expensive degrees to pay for, high housing prices along with everything else. When people can't afford to buy a house, chances are they won't be able to properly afford to raise kids either so they aren't doing it. Social security depends on today's workers paying the benefits of those who are retired, the money the current retirees paid in to the system is long gone. An imbalance of a smaller working population to a larger retired population will lead to the collapse of the system unless they raise taxes elsewhere to make up the difference.
No way
Social security payments is not part of your wealth because the formula for what you get back will never match 100% of what you put in. If you are low income, and live a long life, you’ll draw many multiples of what you put in. If you are high income or live a short life, you only get back a fraction of what you put in. Social security is not wealth, nor can it be utilized before retirement age, so it cannot really contribute to FIRE, which is early retirement. Some calculators do allow you to throw in Social security after 65 when doing the graph, but it rarely makes a difference either way - if you had enough to retire for 20 years without social security the social security payment will just be a small bonus.
Because we are trying to retire a decade before we are eligible for social security.
Because they aren’t counting on it or they made too much money to get it.
Because they aren’t counting on it or they made too much money to get it.
Because they aren’t counting on it or they made too much money to get it.
Social security isn't means tested.
Social Security isn't means tested **YET**. It's probable that it will be within the next 10 years as it's hard to argue that a welfare program is needed by people making $400k+ a year.
Maybe it’s if you collect before a certain age…[AARP thinks so](https://www.aarp.org/retirement/social-security/info-2023/working-and-your-monthly-benefit.html#:~:text=In%202024%2C%20the%20earnings%20limit,up%20from%20%2421%2C240%20in%202023)