Retirement Planning - Lessons Learned

[Jstpssng]

^^^^^
There’s always a few self important people who cause rules to be passed which the rest of us must follow.

 

[Paddy]

How many plan or have stayed working to 70 and/or beyond?
i
I find it interesting to see projected benefit at various retirement ages on the SS earnings statement.

Also amusing is total earnings going back to the beginning...

Even though I started paying in at age 12 my first year of earnings is at age 13 based on $50 a week for a 6 day a week summer job washing and being an all around auto dealership gopher...

Ultrarunner,

A key point often overlooked is thinking about spouses. For example; a few years back your spouse could start collecting the reduced payment at 62 while you keep working, then switch to "half" of yours when you retire. But now if the spouse retires early, their payment when they get half of yours will be reduced due to the choice to retire at 62. I recall it's a 30+ percent reduction for the spouse. If you both retire early, the reduction applies to both of you, forever.

Taking early vs. taking late has a cross over point at near 80 years old. But remember at your death, your spouse only gets the higher of either hers or yours. So you need to consider keeping one of your payments as high as possible in the event one of you survives long after the other.

On the other hand, if you delay S.S. until 70, (24% adder), the max your spouse can get is only 50% of your full retirement age.

Finally, just because you "retire" doesn't mean you have to take S.S., you can delay. Maybe taking 401 k at a higher rate, to bridge until you start collecting.

I am working on a spreadsheet with 401 k, S.S. me, S.S. spouse. It has edit cells where 401 k growth percentages, 401 k withdraw percentages, age of 401 k starts, my age of S.S. withdraw starts and when spouse age of withdraw of S.S. This sums up potential yearly total withdraws.

 

[Jstpssng]

^^^^^
One possible consideration is that SS is purported to run out of funds in about 12 years, then they only will distribute what is taken in.
It seems like if you are going to retire anyways it might be best to maximize SS distributions and allow your other funds to keep growing.

 

[RickB]

^^^^^
One possible consideration is that SS is purported to run out of funds in about 12 years, then they only will distribute what is taken in.
It seems like if you are going to retire anyways it might be best to maximize SS distributions and allow your other funds to keep growing.

The possible uncertainty of SS distributions certainly could change one's strategy.

 

[Snobdds]

Universal basic income to a population that does not pay taxes, funded by a middle class, avoided by upper class tax shields...is a sure fire way for the US to shoot itself in the face.

Needing to eat has been the best motivating factor for a civilization to flourish and keep progressing. Keep the most basic of all motivations...plus if there is a universal basic income, we will see stagflation for generations.

 

[Larry Caldwell]

The possible uncertainty of SS distributions certainly could change one's strategy.

The trust fund will be exhausted in 14 years, which will lead to a 30% reduction in benefits, so none of the calculations made today will hold for long. The easiest way is an across-the-board reduction for everybody, but that would leave poor people in dire straits. All I know is that in 14 years I'll be 88 years old, and it will probably be somebody else's problem.

 

[dirttoys]

The trust fund will be exhausted in 14 years, which will lead to a 30% reduction in benefits, so none of the calculations made today will hold for long. The easiest way is an across-the-board reduction for everybody, but that would leave poor people in dire straits. All I know is that in 14 years I'll be 88 years old, and it will probably be somebody else's problem.

Does anyone else find it fascinating that we will print money for nearly anything, but, SS which has expanded in scope, and has been largely self supporting has to live on a strict P/L?

This is a funny world.

Best,

ed

 

[lman]

I'm sure when the time comes they'll put this country deeper in debt. So many people have decided that they don't need to work so how can they pay taxes.

 

[RickB]

Does anyone else find it fascinating that we will print money for nearly anything, but, SS which has expanded in scope, and has been largely self supporting has to live on a strict P/L?

This is a funny world.

Best,

ed

Do you expect benefits to be cut simply because there are no funds?

 

[Jstpssng]

Do you expect benefits to be cut simply because there are no funds?

Hopefully, yes. They already are cutting benefits to some. If you’ve been paying in for 50+ years the impression is that you are eligible for full amount at 70. Yet that doesn’t apply if you are over the income threshhold.
As is sometimes mentioned the quickest way to find a fix would be to put Congress under the same umbrella as the rest of us. The country was set up to avoid the elitism which our current legislators enjoy...

 

[dirttoys]

Do you expect benefits to be cut simply because there are no funds?

Good question, I am not sure and that is the biggest part of the problem. If you paid in (worked and had your money confiscated) then you should be able to count on ss with the full faith of the US government.

It makes me madder than a hoot owl for folks to look at social security as voluntary or an entitlement. I and my employers lived up to our obligations (at gun point), if the country is still sovereign, I should be able to count on the government to meet it's obligations.

Best,

ed

 

[dirttoys]

Hopefully, yes. They already are cutting benefits to some. If you’ve been paying in for 50+ years the impression is that you are eligible for full amount at 70. Yet that doesn’t apply if you are over the income threshhold.
As is sometimes mentioned the quickest way to find a fix would be to put Congress under the same umbrella as the rest of us. The country was set up to avoid the elitism which our current legislators enjoy...

I couldn't agree more, that law makers should live under the same laws as their subjects (socialism is for the socialist, not the people).

It makes it sound like you hope benefits will be reduced if ss runs a deficit? I would live with that if we treated everything else the same way and went to cash accounting. I assume the threshold you mean the upper cap where you no longer pay in, in that year? I have no idea what that has to do with bene reductions?

Best,

ed

 

[RickB]

Good question, I am not sure and that is the biggest part of the problem. If you paid in (worked and had your money confiscated) then you should be able to count on ss with the full faith of the US government.

It makes me madder than a hoot owl for folks to look at social security as voluntary or an entitlement. I and my employers lived up to our obligations (at gun point), if the country is still sovereign, I should be able to count on the government to meet it's obligations.

Best,

ed

Agreed. 100%

 

[Jstpssng]

I couldn't agree more, that law makers should live under the same laws as their subjects (socialism is for the socialist, not the people).

It makes it sound like you hope benefits will be reduced if ss runs a deficit? I would live with that if we treated everything else the same way and went to cash accounting. I assume the threshold you mean the upper cap where you no longer pay in, in that year? I have no idea what that has to do with bene reductions?

Best,

ed

I believe that we should balance the budget rather than kicking the can down the road the way we've been doing for most of my adult life. This would affect me more than many (most) TBN members as I didn't plan ahead the way that some of you did. But that was my choice...

The "threshhold" I referred to is the apparent income level when you are 70+, at which they don't pay you full benefits. I was unaware of this until last winter, when I was talking to the owner of a snowsled shop who told me that although he is over 70 he still doesn't recieve the full amount which the SS calculates he should recieve.

 

[dirttoys]

I believe that we should balance the budget rather than kicking the can down the road the way we've been doing for most of my adult life. This would affect me more than many (most) TBN members as I didn't plan ahead the way that some of you did. But that was my choice...

The "threshhold" I referred to is the apparent income level when you are 70+, at which they don't pay you full benefits. I was unaware of this until last winter, when I was talking to the owner of a snowsled shop who told me that although he is over 70 he still doesn't recieve the full amount which the SS calculates he should recieve.

My disclaimer for this should be longer than the post! But, please confirm with your financial folks, and let me know if I am mistaken. Take no action on my word.

1. FRA full retirement age is worst case 67, you can get more money monthly if you defer up till 70.
2. Earning limits are a little complex, but, at FRA you can make all you want and still receive your full check. If you have money withheld because of earnings up to that point, they should start to trickle back to you.

I agree with the concept of a balanced budget. However, I can think of several hundred things that need to come in line before SS.

Best,

ed

 

[Paddy]

I believe that we should balance the budget rather than kicking the can down the road the way we've been doing for most of my adult life. This would affect me more than many (most) TBN members as I didn't plan ahead the way that some of you did. But that was my choice...

The "threshhold" I referred to is the apparent income level when you are 70+, at which they don't pay you full benefits. I was unaware of this until last winter, when I was talking to the owner of a snowsled shop who told me that although he is over 70 he still doesn't recieve the full amount which the SS calculates he should recieve.

See link from AARP. 10 myths about Social Security.
Also, there is no income threshold if you are FRA

10 Social Security Myths That Refuse to Die

The program is going broke, the retirement age is 65, and other common misconceptions

www.aarp.org

 

[dirttoys]

See link from AARP. 10 myths about Social Security.
Also, there is no income threshold if you are FRA

10 Social Security Myths That Refuse to Die

The program is going broke, the retirement age is 65, and other common misconceptions

www.aarp.org

LOL wish you were a little quicker Thanks for the link.

It is so funny SS and medicare are so complex, about the time you are supposed to not have to do complex crap any more.

I have known so many older folks that did get care because they didn't understand what they were entitled to, really is a shame.

Best,

ed

 

[Fuddy1952]

I don't know if this applies to everyone, it probably doesn't, but retiring at 61 a financial consultant I know advised me taking our SS at 62. Of course the longer you wait the more you get and it's mandatory to take it at 70 I believe. His reasoning was no one knows how long they'll live and although you get less you get more over time. I paid in starting at 14 with a newspaper route.
Our SS is a pittance and my heart goes out to those having to live off of it. I don't see how they manage. I know we couldn't.

 

[Jstpssng]

My disclaimer for this should be longer than the post! But, please confirm with your financial folks, and let me know if I am mistaken. Take no action on my word.

1. FRA full retirement age is worst case 67, you can get more money monthly if you defer up till 70.
2. Earning limits are a little complex, but, at FRA you can make all you want and still receive your full check. If you have money withheld because of earnings up to that point, they should start to trickle back to you.

I agree with the concept of a balanced budget. However, I can think of several hundred things that need to come in line before SS.

Best,

ed

I agree. However, I'm a bit biased right now as I hope to be on the receiving end in a few years.

See link from AARP. 10 myths about Social Security.
Also, there is no income threshold if you are FRA

10 Social Security Myths That Refuse to Die

The program is going broke, the retirement age is 65, and other common misconceptions

www.aarp.org

I thought that also, until I was talking to somebody who is 70 yet not getting full benefits. Some of the points in your link were educational, and dispelled my previous comment about Congress.

 

[Snobdds]

I'm an actuary and did the math for my mom who retired at 57 with a full pension and 401k, but was unsure what to do about claiming SS. She would have to live to 83, at that point the benefit of waiting past 62 was better. So there is a 21 year break even point. Then it works out to around 8% benefit per year delayed.

I told her to claim it at 62 and live your best retired life. Waiting till your 83 to to live your best life is nonsense.

My dad on the other hand is a stubborn mule and waited until 69. His reasoning is, getting a guaranteed 8% return for 3 years (his FRA is 66) is better than gambling it on the market.