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...