Rant warning

[sushidog]

My plan is to retire at 62 and draw social security at 67. I think I need about $35k to cover my income short fall over the 5 year period. On the other side of enjoying retirement there may be the need for a nursing home or something. I don't want to run out of cash and I can't imagine how the journey will end. So, I think of the $35k as insurance against the unknown.

Sorry this is two posts. Cooking dinner, Fajitas, and had to break away for a moment.

The problem with that is no one knows when they will die. If you die before or at age 67 then you get nothing from social security at all, losing $35k for up to 5 yrs or $175,000 (in your example). Assuming you are lucky enough to live longer than age 67, how many years will it take you to make back the $175,000 you would have earned? Your social security check is typically reduced about 25% from your full retirement age benefit (for me 66.5 yrs old, yours may be 67) that means that you would need to live 4 additional years just to make back the money you lost for each year you delayed receiving benefits.  So just to make back what you lost, you would have to live an additional 20 years past your retirement age, more if the time value of money is taken into consideration (what you could get if you invested your ss checks rather than spending them). for the sake of simplicity I'll use a 4% return just as an example. That means your BOP would be pushed back to past age 88 before you would start to realize a net profit from your plan. I hope you make it.   

If you can still afford to retire at age 62 without taking social security then great. For me and others like me who had to use their retirement money to save their life or the life of a loved one, we are unable to retire without social security. For us, delaying receiving social security means working till we do, possibly never getting to retire, being forced to work at a job we hate until we die, or are no longer able to work due to failing health. That is not a choice I would willingly make. I would rather do whatever it takes to reduce my living expenses to be able to retire off of my age 62 ss income. Everyone's personal situation: savings, income and health is different, so no one solution is right for everyone.

Chip

 

[frater secessus]

Yes. SS is an insurance contract. There is no ownership of the funds you paid for the contract. But quotes out of context don't help.

It is not an insurance contract;  it is no contract at all. Congress can change the benefits at any time.  

The quotes were the pith of the supreme court decisions.  I provided the cases if someone wants to read the contacts context.

 

[Vanholio]

I'm in my 40s. I've learned to live so cheaply vandwelling that I realized the other day I can sorta retire now. I've got a little income from this and that investment, and a little income, it turns out, is most of what I need. I'll still be working for a few hundred dollars or so a month, but that ain't much. (I might even try for more, but then it's a game.) 

It's kind of freaky, actually. I spent most of my adult life worrying about the wolf at the door. Heck, even as a kid I worried. Not sure how to relax.

I figure I might not live much past 60 anyway, 'cause of some health conditions. I'm not bad off, but they really could cut my run short. So I figure: Maybe I only got 15 more years to live? Do I want to enjoy them? I sure do.

Yes, I'm taking some pragmatic steps. But I'm willing to live simply to simply live.

 

[Headache]

popeye, yes, they have stolen from the SS accounts many times and No, they have never paid it back.

It's not stealing.  They are legally borrowing surplus money and no one is required to pay that back until 2020 when the bonds start becoming due.

http://www.cbpp.org/research/social...understanding-the-social-security-trust-funds

 

[rvpopeye]

"But I'm willing to live simply to simply live."

You said it all right there Vanholio................

 

[BadSaver]

My understanding is that there are no bonds in the Social Security Trust Fund. Sometimes the arrangement with the IOUs is referred to as a Special Treasury Bonds. Backed by the Full Faith and Credit of the US. However, the Supreme Court has ruled the government is not bound to current laws. They don't have to pay back if they choose not to. Just pass a law. Therefore, it feels like there isn't a Trust Fund (technically there is).

Herein lies the rub. Social Security was to be invested in marketable US Securities. That's why I feel it was raided.

http://www.fedsmith.com/2012/09/21/government-should-level-public-about-social/

Social Security has three sources of income. OASDI taxes (12.4%), interest earned, and taxes when you receive it. When referring to Trust Fund exhaustion date, I don't beleive, by law they are allowed to include all those categories.It may not be going broke at all. This is why some call on expanding it - perhaps there's more money there than we think. Also, I beleive that 50% of the wage taxes on Social Security goes to the Federal Government and not into the Trust Fund (in 1983 law to fix Social Security). Another part of the problem.

The idea of it is excellent, the implementation not so much. It favors those with better jobs who work 35 years over those of us who woked much longer and aren't as likely to live as long.

 

[BadSaver]

Is Social Security PREFUNDED as was intended? Does the Trust Fund include marketable assets (no). Or, is Social Security a Pay as You Go (PayGo) system.

When the worker to Recepient ratio hits 2 workers for each Social Security recepient we will know. I think, because of demographics (baby boomers). The trust fund needed to be invested in worker productivity increases, we're a debt based society, to support payouts into the future.

It looks like a PayGo system to me. The taxes we paid in just went into the general fund (I won't get political here).

 

[Wanderer]

Personally I'm taking mine at 62.

My reasons? I've had a heart attack at 50. I ain't waiting till I have another to retire then.

 

[ArtW]

solid reasoning, I'll probably take mine at 62 too

 

[steamjam1]

Im 44. I have absolutely no expectation that SS will be there for me when I'm retirement age. I have given up on the system and Ill likely work till I drop dead.

 

[DrJean]

I've been trying for 2 years to apply for SSI... major issues with appointments and lack of help at the local SS office.

 

[mothercoder]

solid reasoning, I'll probably take mine at 62 too

I've had a couple "scares" that turned out okay in the end but who knows how long my luck will hold out.  Plus I am absolutely certain I will become healthier living life as a nomad.  I consider it taking steps for my physical and mental well-being.

 

[sushidog]

Im 44. I have absolutely no expectation that SS will be there for me when I'm retirement age. I have given up on the system and Ill likely work till I drop dead.

Don't worry, it will be there. As long as the federal government has the ability to print money out of thin air with nothing to back it up, you will get your check as promised. Might they modify the program, reduce the benefits slightly, increase the withholding slightly and raise the retirement age? They will more than likely do all of the above, however you are in no danger of them discontinuing the program, as it would cause a loss of faith in the dollar - which is something the government can't and won't let happen.

Might there be inflation when they decide to print money out of thin air to fund the program? It's a certainty. This means that if your social security statement says you are entitled to a certain amount, say $1,000 a month just to keep the number round, you will undoubtedly receive this amount. However due to the hyper inflation caused by monetizing their debt, your $1,000 then might only buy what $500 does today - if you are lucky. The sad part is that if you have a pension, or annuity that pays you say $600/month it will also only buy half as much too, or about $300 in this example. So yes, social security will always be there, but it will be harder and harder to live off of it in the coming years.

Believe it can't happen? It already has. When I was a kid I could buy a Coke and a large candy bar for a dime. How much does this cost in todays dollars? The dollar is worth very little now compared to what it was back then, so it's no stretch to project that it will be worth less in the future. How much less? If our trend of government spending more than they take in is not halted or reversed, a lot less. It's not politics; it's just math. 

Chip

 

[gcal]

I apologize in advance for this bit of venting but this really chapped my hide.  My employer sponsored a webinar regarding social security and I was looking forward to hopefully getting some worthwhile information.  I shouldn’t have been so optimistic.  And I wouldn’t have been upset if it was just a matter of the webinar being surface in nature because how much can they realistically cover. 
 
So that’s not what upset me.  What upset me was the very heavy emphasis (dare I say propaganda) that social security won’t be enough to support you, that it’s a safety net and then they laid on shame for anyone considering early retirement (age 62).  The only situation in which they suggested that this was acceptable was if you were (1) ill/incapacitated (2) had family obligations or (3) had already socked away a wad of cash. 
 
There was even a graphic using water glasses representing the amount of social security at 62, 66 and 70, with the glass at 62 being “half full.” 
 
And then, in what I am sure they deemed to be a good argument to hold off on retiring, they popped up statistics showing that 50% of women live to 88 and 25% live to 92.  To me that says if I only have a 50% chance of living until I’m 88, that’s all the more reason to retire early!  We’ve all heard the stories of people retiring at 66 and dying at 67.  Well here’s proof that only half of us will survive 20 years beyond retirement.  And how much of those 20 years will be active, healthy years? 
 
So yeah…it just really chapped my a$$ to see the whole “work as long as you possibly can” indoctrination being played out.  I’m just waiting for a feedback form to appear in my Inbox so I can share a few thoughts with these venerable people. 
 
Now, for those of you who absolutely LOVE what you do and can’t imagine doing anything else, more power to you.  You’re in the minority and I wish I were one of you, but I’m not.  Recent polls show that 70% of Americans are disengaged from their jobs.  Only 13% of people worldwide like going to their jobs.  Crazy.

Social Security will not be enough to support you. They are giving you the truth. Figure out how much you are going to get at 62 and compare that to your bills, now. Your Social Security checks will never go up more than a pittance, and some years, not at all. But your real cost of living will. Don't forget to factor in your  full medical premiums or costs for the 3 years until you reach 65, your Medicare premiums after 65, your supplimental insurance premiums, and the fact that if you have dental and vision coverage with your employer, you will lose it after retirement.


Sure, you can retire early. But there will be consequences. There is no reset button on your decision. You are going to live with your decision until you die. Some of the early retirees we meet have made it work for a while. They get parttime jobs, they Ebay or flea market, they host at campgrounds. But sooner or later, they can't do that anymore. Then, they are left with just their social security, whatever they have put away, and charity from often unprepared and resentful family for possibly another 10 or 15 years. Sometimes they end up in substandard state run nursing homes. That's is reality as it currently is.


Whether you love your job is irrelevent. It does not change the financial considerations. The fact that your job is not fun is why they have to pay you to do it.

 

[closeanuf]

I retired at 62 and would do it again.  I get work here and there.  If you work as an independent contractor and get a 1099 instead of a W-2 there are some things you can charge off as a business expense.  I have a CPA who keeps me honest (or at least tries).  In some, but not all, cases you can charge off mileage and that can really help offset the penalty that SS hits you with for income over $15,000.  You just have to do your research and don't try to do it on your own.  Personally I pay my CPA what I consider too much to prepare my taxes, but she keeps me on the straight and narrow.  I think the best thing for me is that I have a 13 year old TT paid for and a 13 year old pickup and a 20 years old Dodge van that are paid for.  I would hate to be trying to get by on my SS and making payments.  My friends can't figure how I live on my income.  You can do anything if you really want to.  Follow your heart!!!!!!

 

[Milk Hauler]

I will be 42 in April. After that, I have 5 more years of working... Them I'm out. If I have to dwell the rest of my days in a metal box on wheels free of concern, then I HAVE NO GUILT!



Sent from my SM-G930VL using Tapatalk

 

[frater secessus]

Figure out how much you are going to get at 62 and compare that to your bills, now.

I currently live on less than what my SS income will be.  And some have other retirement pensions/accounts as well.


>  Don't forget to factor in your  full medical premiums or costs for the 3 years until you reach 65, your Medicare premiums after 65, your supplimental insurance premiums, 

My medical needs are taken care of at the V.A., which meets the Obamacare standard for insurance.  Last time I needed serious help (ER, cat scan, bed, IV, 2 prescriptions) the cost was $90.


>and the fact that if you have dental and vision coverage with your employer, you will lose it after retirement. 

Mexico for dental and Rx, as in Bob's recent video.  

I order my prescription glasses from Zenni Optical where I get functional glasses shipped to me for less than I would pay for frames with alleged vision insurance from my employer.   I just ran over my old pair so I ordered another set of bifocals for $26.95.  I was feeling a little splurgy and added a set of photochromic (auto-darkening) bifocals for $60.90. 


> Sure, you can retire early. But there will be consequences.

Indeed.  Chiefly the time to do what I want.



>  There is no reset button on your decision. You are going to live with your decision until you die. 

As with marriage, breeding, picking a major, joining the military, etc.  Free will is not for the fainthearted.



> But sooner or later, they can't do that anymore. Then, they are left with just their social security, whatever they have put away, and charity from often unprepared and resentful family for possibly another 10 or 15 years. Sometimes they end up in substandard state run nursing homes. That's is reality as it currently is.

Exactly, everyone knows Bob died of starvation 1.5yrs after he took early retirement.  Oh, wait... he's still allive and having a blast.

Waiting until full retirement will not preclude ending up with resentful family or in a crappy nursing home.   I plan on feeding the coyotes when I can no longer care for myself.

 

[ArtW]

Believe it can't happen? It already has. When I was a kid I could buy a Coke and a large candy bar for a dime. How much does this cost in todays dollars? The dollar is worth very little now compared to what it was back then, so it's no stretch to project that it will be worth less in the future. How much less? If our trend of government spending more than they take in is not halted or reversed, a lot less. It's not politics; it's just math. 

Chip

yep, and the 5-6K that was median household income in the mid to late 60s adjusted for inflation is about 43K in today's dollars
Folks alway reminise about the 'good old day' when cokes were a nickel, until you ask them how long they had to work to earn that nickel back then

 

[ArtW]

In my case, 3 more years of work isn't going to significantly affect my income, 3 more years of a job that is slowly destroying my feet and knees will for sure significantly affect my health
If I had a nice cushy job that didn't stress my body, I might keep working, but since my job is manual labor, that's less of an option

 

[rvpopeye]

I've always lived a very different lifestyle , including my job history.
And I was always happy with my choice........
When I turned 62 , it was a easy decision and still was after I did all the math.

I'm taking a break to care for my mom but will be right back in the groove after !
When I die there will be no regrets at all.