The Hidden Social Security Math Nobody Shows Retirees

[AR67GTX]

I had my wife start taking SS as soon as she was eligible, thinking at the time that the system was quickly going broke. But by the time I started contemplating retirement I was less concerned about its immediate future. So I decided to wait to start mine until I quit working. As an old Civil Service Fed retiree I wasn’t going to get a full draw anyway. by the time I gave up working at 69 I decided I might as well wait a bit longer until it maxed out at 70. Part of this decision to delay mine was due to my Grandfathers both living to 98 and my Dad is knocking on the door of 101. My Mothers side isn’t quite as good but all you can do is roll the dice. It’s a complex decision to make and a lot of unknowns in the equation.

 

[BSB67]

Bullet 3 high earner. Not sure what $$$ considered high,…..

It’s not “high earner”. It’s “higher earner”. It’s a relative statement.

 

[Hemirunner]

Are any of you investing in your spiritual future? Between Klaus Schwab wanting to take all you own and Bill Gates trying to depopulate the world, your chances of a long, peaceful life of retirement are slim. Just food for thought. Carry on!

 

[Unkle Krusty]

We all have minute particles of radiation, plastics and lots of other stuff in our systems. Health is likely the biggest issue for most folks. I have a ticking sound in the mighty 318 that needs attention. The average life span for a guy is 78 to 80, depending on location. I am there. I also get to sleep with a cute blonde, and ride an SV1000. Can I quote Alfred E Newman?

 

[j-c-c-62]

Surprised in 5? pages there is no mention of the expected 25%? SS reduced benefits in 2033? as the contribution stream falls way short.
Of course, many here at time will only be a memory.
I personally starting collecting 2 years after FRA, right about when COVID shut my industry completely down.
My investment portfolio divorced me.

 

[j-c-c-62]

I know that is the common thinking.
But no, it was never "My money".
It was only a campaign promise, IE worth little, and your contributions paid your parents benefits, your kids or somebody's kids are paying yours, and if you read closely the personal annual benefit information sheet mailed out, it clearly states benefits are at the whim of the current congress, what others have "promised" means little.
Or a classic Ponzi scheme that it has been since day one.

 

[YY1]

Surprised in 5? pages there is no mention of the expected 25%? SS reduced benefits in 2033? as the contribution stream falls way short.
Of course, many here at time will only be a memory.
I personally starting collecting 2 years after FRA, right about when COVID shut my industry completely down.
My investment portfolio divorced me.

That's even more incentive to take it as early as you can get it, if you can get it before that happens.

 

[Hemirunner]

That's even more incentive to take it as early as you can get it, if you can get it before that happens.

I’m 57 and I’m expecting to have donated all these years for nothing… I would have been better off not participating at all.

 

[YY1]

I'll be 62 in 2030.
If those cuts do go into effect, that will throw off all those break even calculators.
I just did a cursory one without actual benefit numbers, but...
Almost every scenario involving taking it early by any number of years versus taking it at 67 (my FRA) shows a 15 year span, give or take a few months, before I break even.
It also shows, should you live to be 99 and six months, that you'd get about 30% more in total at that age by taking it at FRA.

 

[68BabyBlue]

I'll be 62 in 2030.
If those cuts do go into effect, that will throw off all those break even calculators.
I just did a cursory one without actual benefit numbers, but...
Almost every scenario involving taking it early by any number of years versus taking it at 67 (my FRA) shows a 15 year span, give or take a few months, before I break even.
It also shows, should you live to be 99 and six months, that you'd get about 30% more in total at that age by taking it at FRA.

In post #49, I cited the bailout of the Central States Pension Plan, administered by the Teamsters. As an executive, I spent a decade pitching the precarious finances of that pension as a reason not unionize, and instead invest in the company 40l(k), rather than paying union dues. I turned out to be wrong. Although the pension promised benefits it wasn't financially able to fund, it ended up paying them with taxpayer money. Social Security is similar, on a far larger scale.

If Social Security were to reduce benefits for existing retirees, the backlash would be a tsunami compared to any ruckus raised by beneficiaries of a private sector pension. Based on historical precedents, it's likely the can would be kicked further down the road, to the disadvantage of younger folks who don't expect to get it anyway. The loophole I took advantage of to draw double benefits was phased out by age, so as not to affect existing retirees.

The lawyers I know who specialize in this area are all in agreement that younger people will take the hit.

 

[YY1]

I already took the two hits-

FRA 67 (the max hit) vs 65...

and

...the 30% (max) reduction in benefits for taking early at 62.

That's been the story of my life- watching those who go before me reap the rewards, while mine are reduced or eliminated.

My FL state pension took a hit in 2013, when they eliminated the COLA.
Those that retired that year or earlier got 3% per year for life.
Those hired then or later got nothing.
Those in the system but not yet retired (me) got a formulaic reduction.
I'm at 1.6%, but I'll take it* (see below).
My 30 years is already in but-
*I got a pretty good raise this year, and the math says it's better for me to work out the fiscal year and take the year as one of my top five, even if I lose .1% of my COLA.

The only win I ever got was being grandfathered in to OH's raising the drinking age.
They bumped it twice, from 18 to 19, and then to 21.
There were a LOT of new voting age kids really vocally pissed.
Those within six months of turning 19, got grandfathered in with that group.
I bet it was REAL fun carding people and doing the math for those few years.

 

[j-c-c-62]

I'll be 62 in 2030.
If those cuts do go into effect, that will throw off all those break even calculators.
I just did a cursory one without actual benefit numbers, but...
Almost every scenario involving taking it early by any number of years versus taking it at 67 (my FRA) shows a 15 year span, give or take a few months, before I break even.
It also shows, should you live to be 99 and six months, that you'd get about 30% more in total at that age by taking it at FRA.

The odds are however your FRA will be increased a bit I suspect as one of the changes to keep SS fully funded.
And as others have touched on, very few at 99 can "enjoy" their wealth vs their "younger" years.
I hope to live life much like endurance racers do, they only have to finish the race with the steering wheel left to be a success, in that I hope to give everything away, run every tank to empty and spend every dollar till the last day. My legacy I hope will not be found on a balance sheet.

 

[YY1]

That would be the "me" curse.

Wait my whole life for something and have it ripped away right before I qualify.

 

[j-c-c-62]

If Social Security were to reduce benefits for existing retirees, the backlash would be a tsunami compared to any ruckus raised by beneficiaries of a private sector pension.

However, that appears is the underlying ultimate goal, and if the current "free press" is further kneecapped by 2033, it will only be like a tree falling in the forest, nobody will hear it, as the "tsunami" will be intentionally under reported, and nothing will change.
There are recent examples I am unallowed here to mention to back up this observation.

 

[BSB67]

The banter of SS demise is not new. Nobody is going to mess with SS in the short term. No politician will support pissing off the nations largest voting block.

When and if they do pare it back it won’t be some simple % reduction. It'll be 100 pages regulations with of some sort of means-testing to see who gets what. Like everything government, there will be both winners, and losers.

Ive yet to see a calculation that even comes close to addressing the know variables regarding when to claim SS let alone one that allows adjusting the variables.

If someone has one, please share it.

 

[YY1]

The banter of SS demise is not new. Nobody is going to mess with SS in the short term. No politician will support pissing off the nations largest voting block.

When and if they do pare it back it won’t be some simple % reduction. It'll be 100 pages regulations with of some sort of means-testing to see who gets what. Like everything government, there will be both winners, and losers.

Ive yet to see a calculation that even comes close to addressing the know variables regarding when to claim SS let alone one that allows adjusting the variables.

If someone has one, please share it.

What are you looking for.

I found on the first page of hits from my search for "social security break even calculator" that they were all vastly different.

Some were very simple- put in three numbers and get one number.

The one I used let me put in two sets of ages in years and months, and output a graph as well as an age in years and months.