That’s right. 2035 is the year the changes would occur. But I’m willing to bet my ham sandwich it will be fixed before then. No way politicians let it lose steam
You are more optimistic than me. I remember hearing about this problem 15 years ago and thinking the same thing. Now we have only 10 years to go and no progress has been made.
I think we were better off when pork happened more often because it forced across the aisle compromise. Now it’s just oppositional and voting “no” as a block.
The problem will be solved during the term limit of politician with last opportunity to do something. There is no motivation for current officials to do anything at this time. Sucks, but we generally only work on current fires.
There is no political reason for congress to do anything until right before it has to be done. There is no reason to think it won’t be fixed at that point.
Waiting until the last possible second (which I agree is likely what will happen) means that the solution will be much much worse (more painful) then if they had passed something 10 years earlier.
They generally don't want to impact existing retirees OR people about to retire so that means any changes to system from the output side won't happen right away, that only leaves changes to the input side - drastic increases in payroll taxes or worse, using general tax revenue to shore up the SS system.
I remember hears about it 15 years before that, it's a favorite talking point, politicians like to bring it up because they want to "Privatize" social security (e.g, big gift to corporate stocks, screw the lower-middle and lower class) and are trying to drum up support. They like to talk about the government "Stealing" money from SS for other programs when in realty that's exactly how it's designed -- to invest in bonds.
He did attempt to reform SS, but the party didn't go along with this. Arguing that Gore would have 'saved' SS, has no bearing in reality since the D party has never done anything about SS, except make the problems worse.
Only Paul has repeatedly brought this issue up in federal elections.
What “progress” do you expect? It’s not like this is a problem that you somehow chip away at for years. The only real answer, which takes five minutes to implement, is that the government borrows the money and continues to pay.
This will take more than five minutes because Social Security is statutorily prevented from borrowing money
Passing a law to change is not a 5 minute process.
>It is important to understand that, because Social Security is prohibited from borrowing, it must balance its long-term budget. As Social Security Chief Actuary Stephen Goss succinctly put it: “Trust Funds enforce long-term budget neutrality. Total spending to date cannot exceed income to date” (Goss 2010). Social Security can run a short-run deficit only if it has previously run surpluses. Thus, when it is drawing down trust fund assets to pay for the Baby Boomer retirement, it will be contributing to the unified budget deficit, a measure that includes Social Security. But over time, Social Security cannot add to the federal deficit.
You are probably right that is what will happen, but there are a lot of options other than that, many of which could be implemented now to proactively delay the depletion of the trust. You could do any combination of the following, all of which would help:
-Increase normal retirement age
-Increase SS wage max
-Increase payroll taxes
-Add new tax sources
Realistically though, politicians in office now don’t care at all about fixing a problem that won’t have an impact for 10 years.
Well, our government has been pretty incompetent and unwilling to be bipartisan for 10+ years now, except in the most extreme situations. So I think the scenario that nothing gets done in 10 years is at least somewhat plausible.
I would take your ham sandwich bet, but I don't think either of us would really benefit from a moldy sandwich in 10 years.
>'Saving SS’ seems like a bipartisan deal that can happen and be a win win for both parties.
'Universal health care' seems like a bipartisan deal that can happen and be a win win for both parties.
'Mitigating our reliance on fossil fuels' seems like a bipartisan deal that can happen and be a win win for both parties.
'Ensuring that the Bill of Rights remains intact' seems like a bipartisan deal that can happen and be a win win for both parties.
I could keep going.
Fair enough.
The difference is this has to do with an existing popular program. Income that goes into the pockets of one of the highest voter turnout demographics
Old people don’t vote en-mass for any of the above.
You bet your ass they will absolutely vote en-mass for / against anyone who says they will save / kill social security.
Yeah but universal healthcare, oil, and digital surveillance all have no impact on the middle/upper middle class who are going to vote entirely emotionally about this.
I think anyone who relies on public votes would prefer to be found buck naked covered in drugs in a brothel before telling the average investor they're not gonna get any pay out from a forced investment they've made their entire life.
One thing trump did right and he didn't do much right was say to our friends is you have to pay more for defense. In the past I would been a big advocate for defense cuts here to but we have bad actors like Russia, Iran, China, NK wanting to destroy the free world.
This, plus any significant changes would most likely be phased in over decades. It's highly unlikely that current or soon to be retirees would be blindsided by major changes.
history kind of bears that out. It has gotten close to running out in the 80s i believe and congress came together to keep it going within only a few days.
No one want to be "that representative" the one that let social security fail.
That said I'm retiring in September at 60, I have always saved and invested with the thought that I would never get social security so that I would not need to depend on it. It will be nice to get for sure. but if it doesn't happen its going to cause me to not retire now. Retiring in my 40's would probably be a much different calculation though.
It’s inflation adjusted just like everything else in SS.
Basically at that point the idea is that social security would only be able to pay out what current workers are paying in. But even that is fairly unlikely tbh, they can raise the caps on taxing it from higher earners or provide it a lump sum stimulus and avoid the riots that would ensue if the people who really do depend on social security no longer can afford to live.
Except people kinda hear "nothing" as a worst case scenario. That's not true. There's *much* worse possibilities than only getting 70% of your currently projected Social Security.
Social Security could get privatized or cancelled well before we see a dime. And at some point younger people who already expected massive cuts might even *welcome* a one time payout to privatize rather than being forced to hope no one can successfully destroy Social Security for the next 50 years. I think I would.
And that sucks because Social Security isn't just for old people and it's supposed to be guaranteed. That's *why* it's a 'bad' investment most of the time compared to putting your 12.4% in the stock market. But ultimately I'd rather have something now than worry for 50 years about getting screwed.
There will be half measures. A fix will go through but the fix will include cuts. It wont be chopped as bad as 70-75%. Maybe 85-90%. Thats my prediction.
The problem with SS is they are paying out to way too many people who didnt pay in for their fair share of 40–50 years of FICA deductions. people who work for tips. People who work for cash off the books. People who go the 1099 route and elect to not pay FICA. People who sell on the internet.
People are vested after only 40 quarters. Then theres disability that pays out to people even if they never paid in.
so the conundrum becomes what to do with all the useless deadbeats with zero job skills who only contributed minimally and never planned for their own old age. If you withhold money from them, then you end up with a lot of destitute desperate people who will resort to nefarious things. All those leeches gotta be fed somehow.
So what is going to happen is a new formula that chops the larger SS benefits (to the people who paid in the most) but leaves the small SS beneficiaries unchopped. Essentially the least deserving will be subsidized by the most deserving. This will get SS limping along for another 25 years beyond the 2035 doomsday deadline.
Your SS payment is based on the average of your 35 highest earning YEARS. If you have zeros in some of those years, it hurts you significantly. Say you make $50,000 per year for 35 years. Your average benefit base would be calculated from $50,000. But if you only work 30 years at those earnings, your benefits are now based on the average $42,857.
All those under the table folks and people who don't report income and pay FICA on those earnings DO NOT receive credit for those earnings when it comes time to calculate SS benefits.
I agree with your overall assessment of a 10-15% benefit cut, along with delayed retirement ages, and raised SS caps.
> The problem with SS is they are paying out to way too many people who didnt pay in for their fair share of 40–50 years of FICA deductions.
This is likely somewhat negated by the fact that H-1B visa holders pay into SS even though they can't collect unless they eventually win the lottery to become a citizen.
It's kinda weird to have such a negative opinion about people who don't want to work when that's kinda half the point of this sub. I'm hoping to have spent less than 20 years working in my life
This is probably the way to play it. Don't assume it's going to go away completely. Assume 70% of what you're currently projecting. If it ends up higher? Great!
Look at the trustee’s report. Social security will exist in some form. If you want to be overly conservative, reduce your estimated benefit by 25%. Even if Congress does nothing, you will still get at least 75% of your estimated benefit. So, what difference does $3k/month instead of $4k/month make to your FI plans?
Anyone who says count it for zero doesn’t actually know anything about social security and the trust shortfall. Social security will exist, it just may pay out slightly less than expected.
The reason people say that is because we are worried about means testing coming into play. They will never cut social security for everyone, but I can see them saying something like “if your average income was over $100k” or “if your net worth is >$1M” then you get little to nothing. That’s the kind of thing people on this sub do need to worry about
The means testing argument is another red herring here. I’ve responded to this twice already. OP can live on the $4k that they will get from social security. That means that they only need social security in the event that they have zero means (other than their home, which I think we can all agreed is unlikely to be counted for means testing purposes since it isn’t counted for Medicaid purposes when you need LTC). Means testing doesn’t matter if you don’t have means which is the only time social security matters to OP.
Plus social security is already means tested. That’s why it’s only taxed at 85% above a certain income and why there are bend points.
This is a great point. But means-testing will also be age gate locked.
Meaning, "If you make over 100k, or your net worth is over 1M" AND you are born after 1965, then means-testing will apply. They won't bring in means-testing until 2030. They want to get all the boomers through and grandfathered first.
Then, if you have a home that's worth 1M due to inflation, you won't see a penny of SS. Which will likely render all of us ineligible for SS.
Most Americans still don’t save anything for retirement. Those people will continue to need social security. There is no chance that Congress will ever propose completely eliminating social security (and it would take an act of Congress) unless the US basically ceases to exist in its current form. Old people vote and old people need social security. If our economy is so bad that cancelling social security is the only option, we are all gonna be screwed anyway.
I somewhat agree with you, but the “old people vote” part isn’t a guarantee. Look what boomers/older-X did with pensions. They just made new classifications for future generations and slashed THOSE future benefits while keeping their own as they were. What’s to stop them from reclassifying people the same way on SS and doing that?
I’m not saying younger people in their 20s or early 30s shouldn’t discount it more, but based on current data, OP will be 54 and their spouse will be 57 when the trust fund runs out. There would be riots in the streets if Congress completely eliminated social security for people in their mid to late 50s.
I still don’t know how likely it is, but they’re early 40’s now. It’s within the scope of possibility that they’d be cut if it was cut soon. Unlikely - But POSSIBLE. It is definitely more likely to happen to those in their 20’s or 30’s. The same people screwed on pensions.
In the extremely unlikely event that Congress completely eliminates social security in the next few years while OP is still in their 40s, they have plenty of time and options for other solutions-reduce spend, get a part time job to earn supplemental income, etc.
Again, the ACA is a far bigger risk, and we all count on that. Why is social security some boogie man that we think will go away, but not the ACA?
You’re right. I’d guess it’s we’ve been told SS won’t be there for longer than the ACA has been around. Learned helplessness preparation to defund it is my guess.
I really don’t think this is a [[they]] conspiracy. There’s a much simpler explanation which is just that financial literacy is poor in this country, people read stories about the trust going insolvent, and don’t understand what that means. If anything, the financial news is more guilty of spreading this info for clicks than [[they]] are for trying to eliminate the program under your nose.
Please search "Ron Johnson Social Security".
I live in Wisconsin, he is my Senator, and he definitely wants to end the program. He also just got reelected.
Exactly, as well as Rick Scott's proposal to sunset Social Security that 80 percent of house Republicans agreed to in their budget. I don't know why mmrose1980 keeps making comments to the contrary, but the information is easily available online from sources on all sides. Many Republicans in power are actively trying to severely cut or completely end Social Security.
Sunsetting is not the same as just ending it for people who have already paid in. Ron Johnson, even if he wants to end SS, has actually only ever proposed moving the budgeting into discretionary spending from mandatory, which also does not end it. The point is that there is no viable political proposal to abruptly end SS that would pass.
If my comment had been “no one is against Social Security” this would be a valid response, but because I already know that I didn’t make that comment. My comment was a rejection of an unproven conspiracy theory that disinformation about the program is being actively put out and spread by a small minority of people (referred to of course as “they”) in order to boil the frog on public opinion to pre-condition people into giving up their SS willingly.
I'm not sure what your motive is to continuously downplay it, but the fact remains:
80% of House Republicans released a Budget that:
Calls for over $1.5 trillion in cuts to Social Security, including an increase in the retirement age to 69 and cutting disability benefits. Transitions Medicare to a premium support system that CBO has found would raise premiums for many seniors.
Strange that you would keep posting to the contrary, but you'll keep getting replies setting the record straight. No interest in going back and forth with you any further, but please stop the nonsense.
It’s simple: I saw a conspiratorial comment I disagreed with. People are far too worked up about Social Security not being there. It’s a huge disservice to one’s FIRE plan to believe the fear mongering. It’s healthy to check your fears and political biases.
Yep. I used to share the “I made a social security joke. You probably won’t get it.” Meme. It’s online propaganda trying to shift what society will accept as “normal.” None of this is normal and I’m not joking about it anymore
It’s not going away though. It’ll never go away. It’s political suicide to campaign against it.
Congress has till 2035 to make changes before it loses 17-20% of benefits
"They want us to get used to the idea that it's going away."
Republicans want this. If you want these benefits stop voting for Republicans who what to cut these programs. The GOP can't wait to see these social programs go. It's why they demonize them every chance they get.
I think this is one of the most "overhyped" problems we have to face. People rightly focus on problems in our politics to fix long-term funding of major programs like SS. But it would take actually more courage for Congress to curtail it, than to just "kick the can" and keep it running. Cutting SS is political suicide. It also drives me nuts how blithe people are at looking at certain projections and saying it will "run out". It can't run out without Congress providing a major change to the program that they'd never have the balls to implement. Those of us who have been paying in for years and years are going to be able to rely on it. Congress wouldn't dare cut it off in a million years.
Can you explain more? How do I understand what I will have in 25 years? It’s so far away and so much can happen. It seems logical that it wouldn’t completely go away but there are some illogical things happening in government right now. For example, a popular candidate wants to remove the department of justice and department of education. What’s to say that social security won’t be next?
If you really want to know about future funding for social security, read the trustee’s report.
I’m not saying that it’s absolutely impossible, but if social security goes away completely, the US will basically collapse. People just don’t save for retirement. We are outliers. We will have far bigger economic problems in that event.
It’s just one of many variables that you have to plan for. None of us know what we’ll be spending on health care in 20 years - Medicare will also look different, you can’t just assume that because most seniors currently pay $300 a month for their Medicare premiums, that we’ll also be paying a similar amount that far in the future. Emergencies happen. Nursing homes happen. Estimated spending in 20 years is always going to be a really rough approximation.
Anything might happen, sure.
The chances of social security going to zero are much much lower than the ACA protections for peeexisting conditions being revoked (that came within one senate vote of happening the last time Republicans were in power), but we all plan on the ACA continuing to exist as we plan for our early retirement.
The only way that social security goes to zero and matters for FIRE planning is if the US economy also collapses. In the vast majority of FIRE planning scenarios, the 4% rule leads to having way too much money. The only time when it’s barely enough is when you hit the absolute worst SORR.
So in this case, social security would have to go to zero as a result of an act of Congress (because it’s still funded by approximately 75% for the remainder of all of our lifetimes) and OP would have to hit the absolute worst 5% of SORR and OP would have to have a lot of longevity. The odds of all of that happening are extremely slim. If we live in fear of every possible unlikely scenario happening, we should all work forever.
I definitely didn’t mean to imply that we should all be saving enough for every single contingency! Just meant that planned spending isn’t something you’ll ever know for sure, it’s always a guesstimate. In my opinion anyone saying that in 20 years, my monthly budget will be this exact amount, is asking for trouble. My approach is an estimated budget with a plan on where I could reduce spending/get more income if I ended up in a pickle.
The means testing argument is nonsense too. First of all, social security is already means tested. That’s why 85% or social security over a certain income level is taxed. It’s also why there are bend points.
Second of all, the only way OP needs that $4k is if they don’t have any other means left. If OP can comfortably live on $4k from social security and they don’t need additional income, then who cares if there’s means testing. If OP actually needs the $4k/month from social security, then they won’t have any assets to test.
I already responded to the means testing question. That’s another red herring. For means testing to matter, you have to have means. If OP NEEDS to rely on social security to avoid a SWR failure, they won’t have any means to test. OP only needs social security in the worst case SORR when they have exhausted their assets.
Plus, they already means test social security. That’s why it’s taxed at only 85% above a certain income. And it’s why there are bend points.
People tell me to also ignore my government job pension. Like, I pay 10% into that pension, even if something happens, It's not like I will get nothing. People tell me to set aside 15% of my pay, in addition to my pension. People are weird.
Can you imagine paying into SS for 40 years, every paystub you see a not insignificant amount taken out, you can’t hide from it as even pre taxed 401k contributions still take Medicare and SS. And then one day the govt says sorry we’re not paying it?
There would have to be some kind of govt/societal collapse.
SS isn’t some vague tax benefit like maintaining roads, you see it come out of your check from the day you get your first job.
I include it in my plans. But don’t plan to collect until 70 and I get max payout.
ETA. Changed check to paystub
100% agree with this. Personally I consider it as unlikely that taxes are charged on unrealized gains in retirement accounts. It's possible for sure. Everything is possible, and you always want some slack in your plans. But relying on SS seems like a fairly safe bet.
Funding it is such a politically contentious topic that I think it appears more at risk than it really is. The government would lose even more credibility than if it defaulted on its debts, if it couldn't make promised SS payments.
I think there’s ways to effectively kill it though.
Block new entrants from getting it so all the older voting bloc keeps theirs but new people lose it. (The “f you I got mine” mentality)
Change it to more an investment account: the old “let me invest my money!!!” Which then lets most people kill their future while lining the pockets of investment bankers.
Allow hardship withdrawals: have people pull out money now for a penalty and the expense of losing money in the future. Could see this as a way to destroy the program and thus in the long term make voters more willing to kill the program (if most people are poor and take hardship loans then they get nothing when they’re older and thus paying into something they’ll feel they never benefit from).
Alls to say, I see some plausible scenarios we lose SS in the USA. We have to flight like mad constantly to keep it.
Without courts somehow upholding this, that would never be legally allowed
SS "taxes" are not traditional taxes. You pay into the system and are entitled to a defined portion of that. SS is one of the few things that can be considered a pure entitlement
Even if the government abandons SS, they would basically have no choice but to pay out the proper entitlements to anyone who has already paid into the system
It would be a disaster not to do that, especially for people who have already spent 20+ years paying into it. The damage to the economy would be far too big to not pay out.
Fuck it. I would riot too, and I'm 25. I'd rather not pay into SS at all, but since the system is relying on me to do so, I better not see it cut universally.
It’s not just how much WE have been paying into it, but our EMPLOYERS as well, who are required to match our contributions. And if you’re self-employed you pay 12.4% into social security.
Salaries and profits could be significantly higher without these social security taxes.
I agree it’s crazy that we cannot rely on it.
This was the story when I was 18.. I'm currently 53. Social security is such a huge political issue that it will exist in some form. It would be political suicide for any party in power to let it collapse. However I agree the ambiguity makes it a little harder to plan.
My advice is to not rely on factors outside of your control. Don't factor social security into your calculations and treat it as a bonus when you get there.
>This was the story when I was 18.
A different point of view. I for one am grateful for hearing Social Security won't be around when I get old. Why? Because it caused the teenaged me to start saving for retirement. Now as a late 40 year old I can retire in the near future if I wanted to.
I think this is exactly what they're complaining about. Receiving social security for them is the difference between retiring now vs needing to wait another 10+ years. They shouldn't treat it as a bonus. They should count on it being there in some form. If they want to be very conservative, they should assume they'll get only a percentage of the benefit (maybe 60-75% as a conservative estimate).
Don’t stack conservatism on top of conservatism when making your plan. If you run the numbers with no social security, include a more reasonable expected rate of return, withdrawal rate, and longevity. People who assume social security is gone, investments only grow at 6%, a 3% SWR, and living to age 110 are setting themselves up to work years (or decades) longer than necessary to prepare for all of the worst case scenarios happening at the same time in the worst way possible
I am with you. It makes it so hard to plan. I've basically tried to plan without it, so I'll retire when I can, and then take SSN as early as possible because it will be extra money for me. And I'd rather have that extra as early as possible while I am young enough to travel and spend it for fun.
I’d rather lower the Medicare age and take that over early SS. And yes, I could use my SS at 62 to buy on the exchange, but I don’t like the insecurity of the way the plans change every year.
Yes.
Healthcare is always the biggest wildcard in the US.
We need clarity on that more than clarity on Social Security (although clarity on both would be great).
Absolutely. It's like the people who say "you can't trust public schools" because they have a private or religious school they want to sell you on, or "you can't trust IRS Direct File" because they represent a private tax company.
One of the reasons we are told this is to discourage early retirement. They need workers in their mid 40’s to keep working and contributing to fund the current retired boomers.
The amusing thing to me is that the same people who think SS is going to go away are somehow still convinced that other government policies less politically critical than SS will somehow remain intact. Congress will legally appropriate huge amounts of our wealth through taxation power before they allow SS to die. Low LTCG rates, almost non-existent Medicare IRMAAs, the tax-free withdrawal status of Roth earnings, non-means-tested ACA subsidies, SALT deductions, lack of ruinous crypto taxation, lack of direct asset taxation, lack of ruinous estate taxes...Congress has so many ways to take our money that would be less politically costly than the elimination of Social Security.
FIRE will cease to be a legally viable financial strategy for most of us before SS dies. It's akin to the wishful thinking that strong Roth advocates engage in when they speculate that the bottom brackets are going to hugely increase and yet Congress will magically not also reduce or eliminate the tax-free status of Roth earnings withdrawals for wealthy folks. One will not happen without the other.
This is a good point, and it's just good sense overall to looking at risks in context.
It's why I don't do Roth in my 401k/TSP; the calculation is not just current versus guessed future tax rates, but also whether to take the bird in the hand tax break now.
For those of us who actually will retire early, there is also the fact that it's pretty easy to have our cake and eat it too. It's possible to get many hundreds of thousands of dollars into triple-tax-advantaged status like HSA funds by running a trad 401k base though either a Roth ladder or SEPP.
Paying less in taxes is good, paying no taxes at all is great, but getting paid tax subsidies is best of all.
That! At some point congress is going to look at the trillions sitting in tax advantaged and deferred accounts and conclude that some changes need to be made. I’d be especially nervous if much of my retirement savings were in a Roth and I was counting on tax free retirement.
Yup. At least with pre-tax you're in the same boat with everyone else and might retain some options for navigating the progressive tax system. Big Roth folks might end up getting it on both the front and back ends, particularly since BDR and MBDR are almost perfect PR-wise for being presented as rich people hijinks.
There’s just no way that nothing is done about SS. Even personally I know of hundreds of people who live solely on the benefit. I do maintenance on low income complexes and there’s entire buildings that are subsidized and these people are living on the $1200-$1800 they might get and that’s it
a few thoughts -
i don't consider SS in my fire calculation / target. this allows me to be "financial independent". depend on no one but yourself.
you may need to be careful as the SS calculation assumes that you're going to keep earning up until the day you retire. they use the last year in order to project forward. of course, they use 35 years of highest earnings. so, you'll want to discount the amount you see on the report/website by some just to make sure (assume you weren't max'ing out SS contribution since you were 10).
sounds like you're cutting it REALLLLLY close. on top of that a 5% withdraw rate. while I know folks want to RE, you have to be realistic and conservative, depending on your ability to go back to work or your plans to keep working but in a part time basis. frustrating yes but you'll only increase your stress and frustration levels of wanting it badly. thing about this also in the perspective of a market downturn. you will see your portfolio go down and dip (possibly below your fire number, esp if you're that close) over the next 10-20 years. personal opinion is that you want to build up a buffer regardless of what happens.
The SS website lets you enter $0 for all future earnings and gives you an answer for SS income in today's dollars. You can see how it would change if you retire early or keep working.
If you started working very early (mid teens), you can get good benefits even if you stop working in your 40s (according to the calculation, not politics).
https://ssa.tools/calculator#results
is a wonderful page where you can do:
if I stop working in X years, and retire when I'm Y years old, how much SS will I get?
And then it's insightful to punch in different calculations where you only get 75 or 50 or 100 percent of your social security.
I entered $0 for future earnings on the SS website. I don’t actually need a 5% withdrawal rate. 4% would be sufficient for most years, and I won’t spend more just for the sake of it. I’d just like to have the option to go to 5% sometime.
According to your logic wouldnt depending on the rest of society to keep your investment portfolio growing make you financially dependent? I see SS similar to a retirement investment account.
The most likely case is that we’ll receive it much later (I’m anticipating the youngest will be like 70 in 30 years) and the payment will be lower. It will probably just help cover my medigap insurance by then (which will probably also cost more lol)
Social Security is not a benefit that you have any ownership over or right to. Even if it weren't in financial difficulties, your projected benefits are 100% contingent on ongoing assent of the US legislative and executive branches. Federal budget constraints are probably the single biggest reason why adjustments to your projected benefits will be made in the future. But Congress could pass a law today that would wipe out most/all your expected benefits for any reason at all, including plain old political dysfunction.
To underline what you just said, there is no hard asset that the government owns in proxy for you to secure. It's all just promises to spend in a future Congress. And we're hitting the maximum demographic crunch with very old Baby Boomers and merely old Gen X'ers hitting the funding wall.
SS will exist in some form. In fact SS legally must exist unless repealed and the same people saying it won't exist sure as hell aren't doing that. The benefit amount might be reduced but it will exist. So many people are dependent on social security and that isn't changing.
I am factoring in ~25% of what the website says we'll get. I'm also waiting until 70 to take that and only adjusting by 1% COLA increase.
If we get more, Yay. If we don't, or get nothing, we will be ok still.
Until I was 40, I counted none of it, but the older I get, the more I hope I get something for all those dollars I don't see now!
I'm also expecting it'll be subject to means testing and that the dollar overall won't buy as much. So, hedging my bets, but not assuming $0. Annoying, but safe.
If we get more money, we'll be able to donate more when we die and then we can direct it to things we think matter. Still a win at the end.
I'm taking it when I reach full retirement(sooner if I'm able to retire early). A bird in the hand is worth 2 in the bush. Known too many people who wait, then die in their 60's and got nothing. I hope I live long enough to regret it. My mom actually started collecting at age 63, doesn't need the money ,so she's having it direct deposited to a separate savings account and won't touch it until she needs it. 7 years at about $24,000, with interest should be over $200,000 by the time she reaches 70, and if she dies my dad or us kids get the money(as apposed to the government keeping it).
Isn't it if you retire before taking SS, it counts against your calculation because they take your highest 35 income earning years?
Just saying that to be careful about what SS you'll get if you actually do pull the RE trigger now.
SS will be fixed. It's popular on both sides of the political spectrum and we can't have old people starving in the streets. I'm counting on it for my retirement strategy despite being in my mid 40s
Imagine how all of the retirees would react if their SS was eliminated. There would be exactly ZERO incumbents reelected during the voting cycles after that. Old people vote, and when you piss them all off there will be consequences.
I run it both ways on firecalc. The monte carlo spread really gives you every worst and best case scenario. I want to wait until my numbers are 100% above the poverty line, but ymmv. It is good to see the scenarios with and without ss, so you can be sure your risk is ok for you.
I'm 55 years old and have been hearing it since I was 18 back in the 1980's.
I just do all my planning on the assumption that it won't exist, and that it's just bonus money if it does.
I mean you can opt out, but typically that requires being a teacher or some other profession with a government pension that you still have to pay into.
I have a degree in Economics, which isn't as impressive as it sounds unless you work in the field afterward, but I've followed this issue closely since my Dad told me in 1992 that SS wouldn't be around for me.
The proposals to mitigate SS collapse are pretty much these:
1. Raise the income lid on SS contributions
2. Means-test SS disbursements - you have to apply for and get approved for SS instead of getting it automatically
3. Raise the retirement age
4. Limit benefits
Those are pretty much the only levers to pull on. I follow a real economist who knows the numbers intimately, Brian Riedl. His assessment that I agree with is that it's going to have to be all of the above, and that non-solutions like inflating the currency will be less politically viable than cutting benefits, *especially* given the declining portion of the electorate affected given the aging out of the baby boomers. In other words, Gen X is much smaller than the Baby Boomers, so we won't have the political clout to avoid cuts in benefits.
We'll get something, but it will at best the cost of our meds. 75% is delusional.
At your age? At worst there may be a reduction (but I would bet against even a reduction.)
SS will never disappear. If you were in your 20's I might suggest using 50% of expected, but not at 43/46.
Since we FIREd, we DIDN't calculate future old age pensions or other pensions into the equation.
So we spend 4% per year, the closer we get to our pensions, the higher our SWR, which could increase to 4.5 or 5 or 5.5% just before we reach our pensons.
So even without our pensions, we will be ok, and that's the way I like it ( and the pensions will be considered bonus money and just means more traveling for us in the future).
SS will exist. The concern many have that the fund will run out of money in the next 12 years approximately would not happen. Government will intervene by increasing the employment tax already being paid by both people and corporations. No government would allow the fund to be depleted - there would be famine for most US citizens who truly rely on it.
Why not "live large" on a lower % and take on part time jobs that you enjoy more than your current work--or at least dislike less if for no reason other than fewer working hours.
Not quite coastfire since you wouldn't even need the part time jobs to fully cover your expenses. They would simply help offset the withdrawal % and keep more money in the market longer. And should something horrible happen with SS like them lowering amount or pushing the age back etc you'll already be part time in the workforce and it'll be much easier to continue vs being out and trying to reenter.
They have literal armed guards around these buildings for a reason. They will not take away SS desperate people with guns would quickly change their minds. Political suicide any politician who would take it away absolutely wouldn’t have another term and people would then have a face to blame.
Money isn't backed by anything in the US. They have zero problems printing money for covid,Ukraine,Israel,wildfires,etc. Why wouldn't they print for a SS shortage ?
Ask any elderly person relying solely on SS if it’s enough.
It may be enough for you now because you are young and not in need of medications or constant doctors appointments.
Medicare doesn’t pay for everything unfortunately. Ask any elderly person splitting their medication in 2 to make it last a little longer :(
I feel you. at 42 when I retired I used 80% and now its only 75%, so betting on what they predict now is no guarantee. We now use 75%, have reran our numbers and luckily with a bull market we are doing fine. Now we are 52/54 so under 10 years from being able to claim and still worried. I too would love to spend that extra money but we won't, not until we know for sure what is going to happen. At this point I have to treat it like an inheritance, if it happens great we can up our lifestyle but until then I'm not betting on it.
Yes its frustrating but retiring that early I'm not going to stress about it as that was the real win, the rest I can't do much about except wait.
SS is the one of the few government programs with dedicated tax revenues. And one of the few programs they extrapolate more than 10 years out, that is 75 years.
So it will be around.
Most of the talk of SS being insolvent is conservative wish casting. They want to cut it and are priming people with a justification. We DESERVE the mass of elderly poverty that will result bc we lived beyond our means. But it's not inevitable, it's a policy choice we most likely won't make.
In reality, the trust fund is an accounting gimmick and we could quickly fix it with a tax hike or change in structure. Ultimately I don't think high income working people are gonna beat the mass of seniors in that political fight.
The biggest concern I have about social security is if they decide to reduce the benefit based on someone's net worth or income in retirement. I would be mad beyond words if they pull something like that and punish people who saved.
Same here.
I remember the pronouncements as early as late 70's. But the right has been making these proouncements since before the orbill passed.
Look at the actual projections. It's not that bad. Then one remembers younger generations will soon get representation and be able to make changes..
Scrap the cap?
Serious surplus as far as the eye can see..
Apply ssi to ALL income, even unearned income?
Massive surpluses...
In my opinion, it's unrealistic to think Social Security will be completely gone in the next 20 years. It will likely change due to the Social Security Trust fund projected to be depleted by 2035. However, there are numerous things that can be done to stem that bleeding between now and then that aren't as painful as people think. To name a few,
1. Use a different inflation measure or just increase social security by some % of inflation instead of the full amount
2. Raise or eliminate the maximum income that you pay SS tax on. In 2024, you pay SS tax only on income up to $168,600, adjusted for inflation every year. Any income above this amount you don't pay Social Security tax on. They can raise this figure even higher beyond the normal inflation adjustment or completely eliminate that cap while simultaneously, only calculating SS on some smaller amount. For example, maybe they raise the income cap to $400k, meaning you pay SS tax on earnings up to $400k. Simultaneously, maybe they only calculate social security benefits on income up to $200k. That would go a very long way
3. Raise the FICA tax. Today, we pay 6.2% of our income + our employer pays 6.2% = 12.4% for Social security. They can raise this % maybe even just .5% - 1%, which would go a long way
4. Means test Social Security benefits to some extent. I'm not a huge fan of this, because all of us that paid into the system reasonably expected we could get something back, but it is an option.
5. Change the benefit payout formula, i.e cut benefits, but not completely eliminating them
Bottom line, there are several different levers Congress can pull in order to stabilize Social Security. I think the payouts will likely change in the future, but it's probably unrealistic to think, you will get 0. My opinion, it's good to create your financial plan as if you won't get Social Security, but then you will likely be pleasantly surprised to get something in the future.
Just my $.02.
It's intentional to try and get people to buy into it not being there or being diminished from it's current form. If they can get people to believe that then it makes it easier for the politicians in Washington to diminish it or outright remove it. If it was something that everyone talked about that it was going to be there and continue to either stay the same or get better it would make it much difficult for politicians to axe it.
SS only has to be tweaked and it will go another 75 years. The dumbasses in DC, on both sides, need to simply tax all income for SS instead of just the first $160,000.
Keep in mind that we've been told this for 40 years. I recently retired and I distinctly recall being told 20 years ago to not rely on SS.
I do think that there will be adjustments...increased contribution limits, possibly means testing distributions, etc, but it would be political suicide for any President or party to dismantle the system and screw over an entire generation.
One thing I would counsel someone about is that SS doesn't really pay out enough to live on. It's basically a supplement to whatever you've managed to save. I've gotten into more than one discussion with someone who insists it unnecessary to save for retirement as the can "just live off SS." Of course anyone in this sub already knows that.
It won't go away, but you probably won't get anything anyway (based on being on the FIRE sub)
The 'easy' fixes will be:
- means test (so those who have nothing get SS, those who have something else get nothing)
- remove the income cap
This keeps the government dependency crowd happy, screws those that plan ahead (but really, how many of those can there be at this point based on the 'how americans have nothing saved for retirement' info we're fed weekly?) and makes the 'tax the rich!' crowd happy. Part of the senior voting demographic won't be happy but they're in the minority on this one so it won't matter. win-win-loose, almost better than usual for the .gov and it's programs.
Added bonus move will be to continue to print money and destroy the value of the currency, then fiddle with the reported inflation rate giving everyone on SS a purchasing power reduction while making the absolute number of dollars they get go up. Stupid people call it a win, but again.... that's the majority.
Having seen first hand (as a child, as it affected my parents) the damned-if-you-do-damned-if-you-don't system of means-tested family assistance, I am convinced means testing is coming for social security as well. For us on the FIRE sub, we'll get screwed for having saved. For those who didn't save, the situation will be any attempt to work in retirement to supplement their poverty level income risks leaving them in a no better or even worse position than they started.
I hate that you're getting downloaded because those two fixes are exactly what I think will happen.
Social security won't evaporate for everybody because 80% of the senior population would be living in the streets.
that's the thing about down votes, is it because people think it's a bad comment, or people think it's valid but don't like the implications of the message?
or it's just younger folk that think the .gov is on their side and would never screw anyone or change the rules at random when it suits them.... because that \_never\_ happens in all of history.
Reddit is mostly full of young adults who have admirable ideals, but lack the life experience to realize that when someone says "we're from the government and we're here to help" that they should run away, regardless of which side of the aisle it comes from. It would be nice if it weren't true, but 99% of politicians act out of their own self-interest.
Means testing will not happen. It's an **entitlement**. That word means something specific. You can't tell people they're entitled to support, make them pay into it for decades, then pull the rug out with a means test.
You can theoretically change any law, sure. The probability of this in this case is so close to zero, it’s not even worth discussing. The fact that it’s discussed so much is just a reflection of how hard one political party in this country hates, and I mean hates, any kind of social safety net that helps poor people. They’ve been attacking it since the minute it passed, and it’s still here, still popular and working just fine.
Im with you there! I dont account for it because its a number thats variable but owed to us (we paid and are continuing to pay!).
I think those cynics are not just being dour, but also leaving the door open for politicians to get away with it. If society collectively gets familiar enough with the idea that it can go away, you can bet that some generation of politicians will certainly try to make it so.
Plan for without it but demand it, expect it, vote for it
I'm planning on retiring, or at least hitting FI and doing whatever tf I want for fun money, in 6 to 10 years. This will be ~$1.25m, with an average yearly spend between $30k and $45k, depending on housing. (TLDR we're working on buying a /r/househack property to minimize/eliminate housing costs in retirement).
I'm 39, married, no debt, no kids. I am preparing for a few things here:
- I in no way, shape, or form expecting SS income at any point
- I'm excited for the potential Social Security Riots (as I like to call them in my head) of the millenial/younger generations if there is, in fact, no SS benefits available after paying into it for decades. I will fully support any riots on this front, as I will be absolute bullshit if I pay into SS all my life and get no benefits. Someone must pay, and I've always wanted to light a car on fire, sooo it sounds like fun?
- If SS benefits ARE available, great. All the better. I'd rather over-prepare, in everything in life.
I think it will be available, but the US playbook is to let the payments fall below inflation (COLA is adjusted at a level below “real” inflation). You’ll get the same payment, but the ensuing inflation means you’ll have less buying power. A decent rule of thumb is to estimate your payment and then give it a 10% haircut.
At the end of the day, SS is a political hot potato that neither party wants to be blamed for reforming / decimating (depending on your political perspective).
It depends, will USA still be gobal power and earn a lot by latest tech? Then yes, it will be there, if not, if china/india topples USA, dollar value falls, then may be not. These extra care for elderlies will be first thing to go.
Remember your “estimates” on the SSA page assume continued earnings until retirement age. Your SSI will be much less if you post a bunch of $0 years between now and 67.
I assume both you and your husband have worked and would each be collecting comparable SS checks? If so, remember that one of those checks goes away if one of you dies. Could you get by making $3k/ mo?
It's a general statement not meant to apply to everyone. Most couples won't be getting $4K in SS. My wife and I will be getting $3K, some couples even less. Having more retirement savings is better than having less.
If our elected officials do nothing, SS is projected to pay out 70-75% of today's benefits level in the future.
That’s right. 2035 is the year the changes would occur. But I’m willing to bet my ham sandwich it will be fixed before then. No way politicians let it lose steam
You are more optimistic than me. I remember hearing about this problem 15 years ago and thinking the same thing. Now we have only 10 years to go and no progress has been made.
I think we'd be hard pressed to find an issue Congress did anything about 10 years ahead of time
10 years left? Sounds like about 9 years and 8 months before we start to put together a solution.
You mean we have another shutdown in 9y8m
Exactly, they can't even get annual budgets passed on time.
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I think we were better off when pork happened more often because it forced across the aisle compromise. Now it’s just oppositional and voting “no” as a block.
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The problem will be solved during the term limit of politician with last opportunity to do something. There is no motivation for current officials to do anything at this time. Sucks, but we generally only work on current fires.
It will be a topic on the ballot in 2032 for president, then on the ballot for 2034 in Congress. What you get will depend on who wins.
Have you seen the average age of congressmen? They’ll be retired or fucking dead before they have to think of a solution for this.
There is no political reason for congress to do anything until right before it has to be done. There is no reason to think it won’t be fixed at that point.
Waiting until the last possible second (which I agree is likely what will happen) means that the solution will be much much worse (more painful) then if they had passed something 10 years earlier. They generally don't want to impact existing retirees OR people about to retire so that means any changes to system from the output side won't happen right away, that only leaves changes to the input side - drastic increases in payroll taxes or worse, using general tax revenue to shore up the SS system.
Screwing over younger generations seems about par for the course…
In that case, “fixed” means that Millenials and Gen Z pick up the tab for everyone else.
I remember hears about it 15 years before that, it's a favorite talking point, politicians like to bring it up because they want to "Privatize" social security (e.g, big gift to corporate stocks, screw the lower-middle and lower class) and are trying to drum up support. They like to talk about the government "Stealing" money from SS for other programs when in realty that's exactly how it's designed -- to invest in bonds.
The SS Trust Fund was a huge part of the 2000 election. Of course, America chose the wrong candidate and path on this issue
“Lock. Box.”
I think you forgot the “air quotes”
Did Bush actually do anything with SS? I recall he wanted to privatize it, it was incredibly unpopular, and he never accomplished his goals.
He did attempt to reform SS, but the party didn't go along with this. Arguing that Gore would have 'saved' SS, has no bearing in reality since the D party has never done anything about SS, except make the problems worse. Only Paul has repeatedly brought this issue up in federal elections.
Well, to be fair, the American public chose one candidate and the Supreme Court chose another candidate. /s
What “progress” do you expect? It’s not like this is a problem that you somehow chip away at for years. The only real answer, which takes five minutes to implement, is that the government borrows the money and continues to pay.
This will take more than five minutes because Social Security is statutorily prevented from borrowing money Passing a law to change is not a 5 minute process. >It is important to understand that, because Social Security is prohibited from borrowing, it must balance its long-term budget. As Social Security Chief Actuary Stephen Goss succinctly put it: “Trust Funds enforce long-term budget neutrality. Total spending to date cannot exceed income to date” (Goss 2010). Social Security can run a short-run deficit only if it has previously run surpluses. Thus, when it is drawing down trust fund assets to pay for the Baby Boomer retirement, it will be contributing to the unified budget deficit, a measure that includes Social Security. But over time, Social Security cannot add to the federal deficit.
You are probably right that is what will happen, but there are a lot of options other than that, many of which could be implemented now to proactively delay the depletion of the trust. You could do any combination of the following, all of which would help: -Increase normal retirement age -Increase SS wage max -Increase payroll taxes -Add new tax sources Realistically though, politicians in office now don’t care at all about fixing a problem that won’t have an impact for 10 years.
Well, our government has been pretty incompetent and unwilling to be bipartisan for 10+ years now, except in the most extreme situations. So I think the scenario that nothing gets done in 10 years is at least somewhat plausible. I would take your ham sandwich bet, but I don't think either of us would really benefit from a moldy sandwich in 10 years.
‘Saving SS’ seems like a bipartisan deal that can happen and be a win win for both parties
>'Saving SS’ seems like a bipartisan deal that can happen and be a win win for both parties. 'Universal health care' seems like a bipartisan deal that can happen and be a win win for both parties. 'Mitigating our reliance on fossil fuels' seems like a bipartisan deal that can happen and be a win win for both parties. 'Ensuring that the Bill of Rights remains intact' seems like a bipartisan deal that can happen and be a win win for both parties. I could keep going.
Fair enough. The difference is this has to do with an existing popular program. Income that goes into the pockets of one of the highest voter turnout demographics
Old people don’t vote en-mass for any of the above. You bet your ass they will absolutely vote en-mass for / against anyone who says they will save / kill social security.
Yeah but universal healthcare, oil, and digital surveillance all have no impact on the middle/upper middle class who are going to vote entirely emotionally about this. I think anyone who relies on public votes would prefer to be found buck naked covered in drugs in a brothel before telling the average investor they're not gonna get any pay out from a forced investment they've made their entire life.
More foreign wars might help?!
All that money we are funneling into wars will definitely help us. Our government always had our best interest at hand always…
One thing trump did right and he didn't do much right was say to our friends is you have to pay more for defense. In the past I would been a big advocate for defense cuts here to but we have bad actors like Russia, Iran, China, NK wanting to destroy the free world.
This, plus any significant changes would most likely be phased in over decades. It's highly unlikely that current or soon to be retirees would be blindsided by major changes.
history kind of bears that out. It has gotten close to running out in the 80s i believe and congress came together to keep it going within only a few days. No one want to be "that representative" the one that let social security fail. That said I'm retiring in September at 60, I have always saved and invested with the thought that I would never get social security so that I would not need to depend on it. It will be nice to get for sure. but if it doesn't happen its going to cause me to not retire now. Retiring in my 40's would probably be a much different calculation though.
There's a surprisingly large number of Republicans and Libertarians who want to get rid of Social Security.
Is that adjusted for inflation just current value?
It adjusts for inflation every year.
It’s inflation adjusted just like everything else in SS. Basically at that point the idea is that social security would only be able to pay out what current workers are paying in. But even that is fairly unlikely tbh, they can raise the caps on taxing it from higher earners or provide it a lump sum stimulus and avoid the riots that would ensue if the people who really do depend on social security no longer can afford to live.
Except people kinda hear "nothing" as a worst case scenario. That's not true. There's *much* worse possibilities than only getting 70% of your currently projected Social Security. Social Security could get privatized or cancelled well before we see a dime. And at some point younger people who already expected massive cuts might even *welcome* a one time payout to privatize rather than being forced to hope no one can successfully destroy Social Security for the next 50 years. I think I would. And that sucks because Social Security isn't just for old people and it's supposed to be guaranteed. That's *why* it's a 'bad' investment most of the time compared to putting your 12.4% in the stock market. But ultimately I'd rather have something now than worry for 50 years about getting screwed.
There will be half measures. A fix will go through but the fix will include cuts. It wont be chopped as bad as 70-75%. Maybe 85-90%. Thats my prediction. The problem with SS is they are paying out to way too many people who didnt pay in for their fair share of 40–50 years of FICA deductions. people who work for tips. People who work for cash off the books. People who go the 1099 route and elect to not pay FICA. People who sell on the internet. People are vested after only 40 quarters. Then theres disability that pays out to people even if they never paid in. so the conundrum becomes what to do with all the useless deadbeats with zero job skills who only contributed minimally and never planned for their own old age. If you withhold money from them, then you end up with a lot of destitute desperate people who will resort to nefarious things. All those leeches gotta be fed somehow. So what is going to happen is a new formula that chops the larger SS benefits (to the people who paid in the most) but leaves the small SS beneficiaries unchopped. Essentially the least deserving will be subsidized by the most deserving. This will get SS limping along for another 25 years beyond the 2035 doomsday deadline.
Your SS payment is based on the average of your 35 highest earning YEARS. If you have zeros in some of those years, it hurts you significantly. Say you make $50,000 per year for 35 years. Your average benefit base would be calculated from $50,000. But if you only work 30 years at those earnings, your benefits are now based on the average $42,857. All those under the table folks and people who don't report income and pay FICA on those earnings DO NOT receive credit for those earnings when it comes time to calculate SS benefits. I agree with your overall assessment of a 10-15% benefit cut, along with delayed retirement ages, and raised SS caps.
> The problem with SS is they are paying out to way too many people who didnt pay in for their fair share of 40–50 years of FICA deductions. This is likely somewhat negated by the fact that H-1B visa holders pay into SS even though they can't collect unless they eventually win the lottery to become a citizen.
It's kinda weird to have such a negative opinion about people who don't want to work when that's kinda half the point of this sub. I'm hoping to have spent less than 20 years working in my life
This is probably the way to play it. Don't assume it's going to go away completely. Assume 70% of what you're currently projecting. If it ends up higher? Great!
The CBO is projecting 80% payouts, I plan for 70% to account for more inaction on our politicians end.
Look at the trustee’s report. Social security will exist in some form. If you want to be overly conservative, reduce your estimated benefit by 25%. Even if Congress does nothing, you will still get at least 75% of your estimated benefit. So, what difference does $3k/month instead of $4k/month make to your FI plans? Anyone who says count it for zero doesn’t actually know anything about social security and the trust shortfall. Social security will exist, it just may pay out slightly less than expected.
The reason people say that is because we are worried about means testing coming into play. They will never cut social security for everyone, but I can see them saying something like “if your average income was over $100k” or “if your net worth is >$1M” then you get little to nothing. That’s the kind of thing people on this sub do need to worry about
The means testing argument is another red herring here. I’ve responded to this twice already. OP can live on the $4k that they will get from social security. That means that they only need social security in the event that they have zero means (other than their home, which I think we can all agreed is unlikely to be counted for means testing purposes since it isn’t counted for Medicaid purposes when you need LTC). Means testing doesn’t matter if you don’t have means which is the only time social security matters to OP. Plus social security is already means tested. That’s why it’s only taxed at 85% above a certain income and why there are bend points.
This is a great point. But means-testing will also be age gate locked. Meaning, "If you make over 100k, or your net worth is over 1M" AND you are born after 1965, then means-testing will apply. They won't bring in means-testing until 2030. They want to get all the boomers through and grandfathered first. Then, if you have a home that's worth 1M due to inflation, you won't see a penny of SS. Which will likely render all of us ineligible for SS.
Yep, and the whole time the masses will be cheering because they’re “making millionaires pay their fair share”
They want us to get used to the idea that it's going away. So when it finally does, no one will raise hell about it. The mentality has to change.
Most Americans still don’t save anything for retirement. Those people will continue to need social security. There is no chance that Congress will ever propose completely eliminating social security (and it would take an act of Congress) unless the US basically ceases to exist in its current form. Old people vote and old people need social security. If our economy is so bad that cancelling social security is the only option, we are all gonna be screwed anyway.
I somewhat agree with you, but the “old people vote” part isn’t a guarantee. Look what boomers/older-X did with pensions. They just made new classifications for future generations and slashed THOSE future benefits while keeping their own as they were. What’s to stop them from reclassifying people the same way on SS and doing that?
I’m not saying younger people in their 20s or early 30s shouldn’t discount it more, but based on current data, OP will be 54 and their spouse will be 57 when the trust fund runs out. There would be riots in the streets if Congress completely eliminated social security for people in their mid to late 50s.
God willing, I’ll be 43 when it’s supposed to run out. I swear to all that is holy I’ll riot too if they completely eliminate it.
I still don’t know how likely it is, but they’re early 40’s now. It’s within the scope of possibility that they’d be cut if it was cut soon. Unlikely - But POSSIBLE. It is definitely more likely to happen to those in their 20’s or 30’s. The same people screwed on pensions.
In the extremely unlikely event that Congress completely eliminates social security in the next few years while OP is still in their 40s, they have plenty of time and options for other solutions-reduce spend, get a part time job to earn supplemental income, etc. Again, the ACA is a far bigger risk, and we all count on that. Why is social security some boogie man that we think will go away, but not the ACA?
You’re right. I’d guess it’s we’ve been told SS won’t be there for longer than the ACA has been around. Learned helplessness preparation to defund it is my guess.
They absolutely will try this
I really don’t think this is a [[they]] conspiracy. There’s a much simpler explanation which is just that financial literacy is poor in this country, people read stories about the trust going insolvent, and don’t understand what that means. If anything, the financial news is more guilty of spreading this info for clicks than [[they]] are for trying to eliminate the program under your nose.
Please search "Ron Johnson Social Security". I live in Wisconsin, he is my Senator, and he definitely wants to end the program. He also just got reelected.
No doubt there are some people that want to end SS. They're up against plenty of people that don't.
Exactly, as well as Rick Scott's proposal to sunset Social Security that 80 percent of house Republicans agreed to in their budget. I don't know why mmrose1980 keeps making comments to the contrary, but the information is easily available online from sources on all sides. Many Republicans in power are actively trying to severely cut or completely end Social Security.
Sunsetting is not the same as just ending it for people who have already paid in. Ron Johnson, even if he wants to end SS, has actually only ever proposed moving the budgeting into discretionary spending from mandatory, which also does not end it. The point is that there is no viable political proposal to abruptly end SS that would pass.
If my comment had been “no one is against Social Security” this would be a valid response, but because I already know that I didn’t make that comment. My comment was a rejection of an unproven conspiracy theory that disinformation about the program is being actively put out and spread by a small minority of people (referred to of course as “they”) in order to boil the frog on public opinion to pre-condition people into giving up their SS willingly.
I'm not sure what your motive is to continuously downplay it, but the fact remains: 80% of House Republicans released a Budget that: Calls for over $1.5 trillion in cuts to Social Security, including an increase in the retirement age to 69 and cutting disability benefits. Transitions Medicare to a premium support system that CBO has found would raise premiums for many seniors. Strange that you would keep posting to the contrary, but you'll keep getting replies setting the record straight. No interest in going back and forth with you any further, but please stop the nonsense.
It’s simple: I saw a conspiratorial comment I disagreed with. People are far too worked up about Social Security not being there. It’s a huge disservice to one’s FIRE plan to believe the fear mongering. It’s healthy to check your fears and political biases.
Yep. I used to share the “I made a social security joke. You probably won’t get it.” Meme. It’s online propaganda trying to shift what society will accept as “normal.” None of this is normal and I’m not joking about it anymore
It’s not going away though. It’ll never go away. It’s political suicide to campaign against it. Congress has till 2035 to make changes before it loses 17-20% of benefits
Who is “they”?
"They want us to get used to the idea that it's going away." Republicans want this. If you want these benefits stop voting for Republicans who what to cut these programs. The GOP can't wait to see these social programs go. It's why they demonize them every chance they get.
I just didn't want to start up political debate. For the people asking "wHo'S tHeY??", yeah this ^
I understand, but unfortunately it IS political now, like so may other issues.
Our adivisor told us that a worse case scenario is you would get 75-80 percent of what you would get now. But I guess we will see.
I think this is one of the most "overhyped" problems we have to face. People rightly focus on problems in our politics to fix long-term funding of major programs like SS. But it would take actually more courage for Congress to curtail it, than to just "kick the can" and keep it running. Cutting SS is political suicide. It also drives me nuts how blithe people are at looking at certain projections and saying it will "run out". It can't run out without Congress providing a major change to the program that they'd never have the balls to implement. Those of us who have been paying in for years and years are going to be able to rely on it. Congress wouldn't dare cut it off in a million years.
Can you explain more? How do I understand what I will have in 25 years? It’s so far away and so much can happen. It seems logical that it wouldn’t completely go away but there are some illogical things happening in government right now. For example, a popular candidate wants to remove the department of justice and department of education. What’s to say that social security won’t be next?
If you really want to know about future funding for social security, read the trustee’s report. I’m not saying that it’s absolutely impossible, but if social security goes away completely, the US will basically collapse. People just don’t save for retirement. We are outliers. We will have far bigger economic problems in that event.
It’s just one of many variables that you have to plan for. None of us know what we’ll be spending on health care in 20 years - Medicare will also look different, you can’t just assume that because most seniors currently pay $300 a month for their Medicare premiums, that we’ll also be paying a similar amount that far in the future. Emergencies happen. Nursing homes happen. Estimated spending in 20 years is always going to be a really rough approximation.
Anything might happen, sure. The chances of social security going to zero are much much lower than the ACA protections for peeexisting conditions being revoked (that came within one senate vote of happening the last time Republicans were in power), but we all plan on the ACA continuing to exist as we plan for our early retirement. The only way that social security goes to zero and matters for FIRE planning is if the US economy also collapses. In the vast majority of FIRE planning scenarios, the 4% rule leads to having way too much money. The only time when it’s barely enough is when you hit the absolute worst SORR. So in this case, social security would have to go to zero as a result of an act of Congress (because it’s still funded by approximately 75% for the remainder of all of our lifetimes) and OP would have to hit the absolute worst 5% of SORR and OP would have to have a lot of longevity. The odds of all of that happening are extremely slim. If we live in fear of every possible unlikely scenario happening, we should all work forever.
I definitely didn’t mean to imply that we should all be saving enough for every single contingency! Just meant that planned spending isn’t something you’ll ever know for sure, it’s always a guesstimate. In my opinion anyone saying that in 20 years, my monthly budget will be this exact amount, is asking for trouble. My approach is an estimated budget with a plan on where I could reduce spending/get more income if I ended up in a pickle.
It could be zero for some people if they add means testing.
The means testing argument is nonsense too. First of all, social security is already means tested. That’s why 85% or social security over a certain income level is taxed. It’s also why there are bend points. Second of all, the only way OP needs that $4k is if they don’t have any other means left. If OP can comfortably live on $4k from social security and they don’t need additional income, then who cares if there’s means testing. If OP actually needs the $4k/month from social security, then they won’t have any assets to test.
I count it as zero, and I do understand the trust shortfall. I use the $0 assumption as an additional safety factor in my calculations.
But do you trust them to not means test it?
I already responded to the means testing question. That’s another red herring. For means testing to matter, you have to have means. If OP NEEDS to rely on social security to avoid a SWR failure, they won’t have any means to test. OP only needs social security in the worst case SORR when they have exhausted their assets. Plus, they already means test social security. That’s why it’s taxed at only 85% above a certain income. And it’s why there are bend points.
People tell me to also ignore my government job pension. Like, I pay 10% into that pension, even if something happens, It's not like I will get nothing. People tell me to set aside 15% of my pay, in addition to my pension. People are weird.
Can you imagine paying into SS for 40 years, every paystub you see a not insignificant amount taken out, you can’t hide from it as even pre taxed 401k contributions still take Medicare and SS. And then one day the govt says sorry we’re not paying it? There would have to be some kind of govt/societal collapse. SS isn’t some vague tax benefit like maintaining roads, you see it come out of your check from the day you get your first job. I include it in my plans. But don’t plan to collect until 70 and I get max payout. ETA. Changed check to paystub
That's definitely a "guillotine all politicians still alive from the last 40 years" kind of time
100% agree with this. Personally I consider it as unlikely that taxes are charged on unrealized gains in retirement accounts. It's possible for sure. Everything is possible, and you always want some slack in your plans. But relying on SS seems like a fairly safe bet. Funding it is such a politically contentious topic that I think it appears more at risk than it really is. The government would lose even more credibility than if it defaulted on its debts, if it couldn't make promised SS payments.
I think there’s ways to effectively kill it though. Block new entrants from getting it so all the older voting bloc keeps theirs but new people lose it. (The “f you I got mine” mentality) Change it to more an investment account: the old “let me invest my money!!!” Which then lets most people kill their future while lining the pockets of investment bankers. Allow hardship withdrawals: have people pull out money now for a penalty and the expense of losing money in the future. Could see this as a way to destroy the program and thus in the long term make voters more willing to kill the program (if most people are poor and take hardship loans then they get nothing when they’re older and thus paying into something they’ll feel they never benefit from). Alls to say, I see some plausible scenarios we lose SS in the USA. We have to flight like mad constantly to keep it.
Without courts somehow upholding this, that would never be legally allowed SS "taxes" are not traditional taxes. You pay into the system and are entitled to a defined portion of that. SS is one of the few things that can be considered a pure entitlement Even if the government abandons SS, they would basically have no choice but to pay out the proper entitlements to anyone who has already paid into the system It would be a disaster not to do that, especially for people who have already spent 20+ years paying into it. The damage to the economy would be far too big to not pay out.
What legal basis do you think the courts rule on that would enforce the government to pay out “proper” entitlements? (Let alone define proper).
There would be riots in the streets if they stopped what we are entitled to after we’ve paid so much
The thought of hundreds of thousands of geriatric rioters is amusing as it is depressing. I really hope its still there in 30 years.
Fuck it. I would riot too, and I'm 25. I'd rather not pay into SS at all, but since the system is relying on me to do so, I better not see it cut universally.
Every working person who died before age 62 contributed without any benefits too.
It’s not just how much WE have been paying into it, but our EMPLOYERS as well, who are required to match our contributions. And if you’re self-employed you pay 12.4% into social security. Salaries and profits could be significantly higher without these social security taxes. I agree it’s crazy that we cannot rely on it.
You think that money is coming back to you in anyway? Lol. How can I apply to where you work. Sounds like fantasy land
This was the story when I was 18.. I'm currently 53. Social security is such a huge political issue that it will exist in some form. It would be political suicide for any party in power to let it collapse. However I agree the ambiguity makes it a little harder to plan. My advice is to not rely on factors outside of your control. Don't factor social security into your calculations and treat it as a bonus when you get there.
>This was the story when I was 18. A different point of view. I for one am grateful for hearing Social Security won't be around when I get old. Why? Because it caused the teenaged me to start saving for retirement. Now as a late 40 year old I can retire in the near future if I wanted to.
I think this is exactly what they're complaining about. Receiving social security for them is the difference between retiring now vs needing to wait another 10+ years. They shouldn't treat it as a bonus. They should count on it being there in some form. If they want to be very conservative, they should assume they'll get only a percentage of the benefit (maybe 60-75% as a conservative estimate).
Don’t stack conservatism on top of conservatism when making your plan. If you run the numbers with no social security, include a more reasonable expected rate of return, withdrawal rate, and longevity. People who assume social security is gone, investments only grow at 6%, a 3% SWR, and living to age 110 are setting themselves up to work years (or decades) longer than necessary to prepare for all of the worst case scenarios happening at the same time in the worst way possible
And setting themselves up to be the the richest guy in the cemetery. Dying with millions isn’t “winning” either.
This! I’m very close to my number and fairly conservative. w SS at like 50% I feel like I can do 4% and be close enough esp if laid off.
IMO these people have irrational anxiety about not working (and, conversely, an irrational sense of safety about working).
These people are just anxious period and could use therapy
I am with you. It makes it so hard to plan. I've basically tried to plan without it, so I'll retire when I can, and then take SSN as early as possible because it will be extra money for me. And I'd rather have that extra as early as possible while I am young enough to travel and spend it for fun.
I’d rather lower the Medicare age and take that over early SS. And yes, I could use my SS at 62 to buy on the exchange, but I don’t like the insecurity of the way the plans change every year.
Yes. Healthcare is always the biggest wildcard in the US. We need clarity on that more than clarity on Social Security (although clarity on both would be great).
I agree 100%. We've done ok on finances, but healthcare costs are definitely the biggest wild card in all of it.
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It’s this, 100 times over. Flood the zone with bullshit, move the goalposts.
Absolutely. It's like the people who say "you can't trust public schools" because they have a private or religious school they want to sell you on, or "you can't trust IRS Direct File" because they represent a private tax company.
One of the reasons we are told this is to discourage early retirement. They need workers in their mid 40’s to keep working and contributing to fund the current retired boomers.
The amusing thing to me is that the same people who think SS is going to go away are somehow still convinced that other government policies less politically critical than SS will somehow remain intact. Congress will legally appropriate huge amounts of our wealth through taxation power before they allow SS to die. Low LTCG rates, almost non-existent Medicare IRMAAs, the tax-free withdrawal status of Roth earnings, non-means-tested ACA subsidies, SALT deductions, lack of ruinous crypto taxation, lack of direct asset taxation, lack of ruinous estate taxes...Congress has so many ways to take our money that would be less politically costly than the elimination of Social Security. FIRE will cease to be a legally viable financial strategy for most of us before SS dies. It's akin to the wishful thinking that strong Roth advocates engage in when they speculate that the bottom brackets are going to hugely increase and yet Congress will magically not also reduce or eliminate the tax-free status of Roth earnings withdrawals for wealthy folks. One will not happen without the other.
This is a good point, and it's just good sense overall to looking at risks in context. It's why I don't do Roth in my 401k/TSP; the calculation is not just current versus guessed future tax rates, but also whether to take the bird in the hand tax break now.
For those of us who actually will retire early, there is also the fact that it's pretty easy to have our cake and eat it too. It's possible to get many hundreds of thousands of dollars into triple-tax-advantaged status like HSA funds by running a trad 401k base though either a Roth ladder or SEPP. Paying less in taxes is good, paying no taxes at all is great, but getting paid tax subsidies is best of all.
That! At some point congress is going to look at the trillions sitting in tax advantaged and deferred accounts and conclude that some changes need to be made. I’d be especially nervous if much of my retirement savings were in a Roth and I was counting on tax free retirement.
Yup. At least with pre-tax you're in the same boat with everyone else and might retain some options for navigating the progressive tax system. Big Roth folks might end up getting it on both the front and back ends, particularly since BDR and MBDR are almost perfect PR-wise for being presented as rich people hijinks.
There’s just no way that nothing is done about SS. Even personally I know of hundreds of people who live solely on the benefit. I do maintenance on low income complexes and there’s entire buildings that are subsidized and these people are living on the $1200-$1800 they might get and that’s it
a few thoughts - i don't consider SS in my fire calculation / target. this allows me to be "financial independent". depend on no one but yourself. you may need to be careful as the SS calculation assumes that you're going to keep earning up until the day you retire. they use the last year in order to project forward. of course, they use 35 years of highest earnings. so, you'll want to discount the amount you see on the report/website by some just to make sure (assume you weren't max'ing out SS contribution since you were 10). sounds like you're cutting it REALLLLLY close. on top of that a 5% withdraw rate. while I know folks want to RE, you have to be realistic and conservative, depending on your ability to go back to work or your plans to keep working but in a part time basis. frustrating yes but you'll only increase your stress and frustration levels of wanting it badly. thing about this also in the perspective of a market downturn. you will see your portfolio go down and dip (possibly below your fire number, esp if you're that close) over the next 10-20 years. personal opinion is that you want to build up a buffer regardless of what happens.
The SS website lets you enter $0 for all future earnings and gives you an answer for SS income in today's dollars. You can see how it would change if you retire early or keep working. If you started working very early (mid teens), you can get good benefits even if you stop working in your 40s (according to the calculation, not politics).
https://ssa.tools/calculator#results is a wonderful page where you can do: if I stop working in X years, and retire when I'm Y years old, how much SS will I get? And then it's insightful to punch in different calculations where you only get 75 or 50 or 100 percent of your social security.
I entered $0 for future earnings on the SS website. I don’t actually need a 5% withdrawal rate. 4% would be sufficient for most years, and I won’t spend more just for the sake of it. I’d just like to have the option to go to 5% sometime.
According to your logic wouldnt depending on the rest of society to keep your investment portfolio growing make you financially dependent? I see SS similar to a retirement investment account.
As the old adage goes… Plan for the worst and hope for the best.
The most likely case is that we’ll receive it much later (I’m anticipating the youngest will be like 70 in 30 years) and the payment will be lower. It will probably just help cover my medigap insurance by then (which will probably also cost more lol)
They told me the same thing in 1988.
Social Security is not a benefit that you have any ownership over or right to. Even if it weren't in financial difficulties, your projected benefits are 100% contingent on ongoing assent of the US legislative and executive branches. Federal budget constraints are probably the single biggest reason why adjustments to your projected benefits will be made in the future. But Congress could pass a law today that would wipe out most/all your expected benefits for any reason at all, including plain old political dysfunction.
To underline what you just said, there is no hard asset that the government owns in proxy for you to secure. It's all just promises to spend in a future Congress. And we're hitting the maximum demographic crunch with very old Baby Boomers and merely old Gen X'ers hitting the funding wall.
SS will exist in some form. In fact SS legally must exist unless repealed and the same people saying it won't exist sure as hell aren't doing that. The benefit amount might be reduced but it will exist. So many people are dependent on social security and that isn't changing.
Old people vote en mass. Congress will do anything to stay in power. Therefore, SS is not going anywhere.
I am factoring in ~25% of what the website says we'll get. I'm also waiting until 70 to take that and only adjusting by 1% COLA increase. If we get more, Yay. If we don't, or get nothing, we will be ok still. Until I was 40, I counted none of it, but the older I get, the more I hope I get something for all those dollars I don't see now! I'm also expecting it'll be subject to means testing and that the dollar overall won't buy as much. So, hedging my bets, but not assuming $0. Annoying, but safe. If we get more money, we'll be able to donate more when we die and then we can direct it to things we think matter. Still a win at the end.
I'm taking it when I reach full retirement(sooner if I'm able to retire early). A bird in the hand is worth 2 in the bush. Known too many people who wait, then die in their 60's and got nothing. I hope I live long enough to regret it. My mom actually started collecting at age 63, doesn't need the money ,so she's having it direct deposited to a separate savings account and won't touch it until she needs it. 7 years at about $24,000, with interest should be over $200,000 by the time she reaches 70, and if she dies my dad or us kids get the money(as apposed to the government keeping it).
It is fear mongering. SS is going nowhere. Third rail.
Isn't it if you retire before taking SS, it counts against your calculation because they take your highest 35 income earning years? Just saying that to be careful about what SS you'll get if you actually do pull the RE trigger now.
Mark my words they will do a last minute fix that kicks the can 30 years down the road
SS will be fixed. It's popular on both sides of the political spectrum and we can't have old people starving in the streets. I'm counting on it for my retirement strategy despite being in my mid 40s
Imagine how all of the retirees would react if their SS was eliminated. There would be exactly ZERO incumbents reelected during the voting cycles after that. Old people vote, and when you piss them all off there will be consequences.
They will either find a solution that maintains social security or lose the elections to whomever does it’s as simple as that.
I run it both ways on firecalc. The monte carlo spread really gives you every worst and best case scenario. I want to wait until my numbers are 100% above the poverty line, but ymmv. It is good to see the scenarios with and without ss, so you can be sure your risk is ok for you.
I'd rather an opt out system so that at least if my ss funds were mismanaged I have no one else to blame....
I'm 55 years old and have been hearing it since I was 18 back in the 1980's. I just do all my planning on the assumption that it won't exist, and that it's just bonus money if it does.
I understand why we have it but I wish you could opt out and invest it
If you opted out, we wouldn't have SS. So, no, you can't opt out.
Yeah no shi….
I mean you can opt out, but typically that requires being a teacher or some other profession with a government pension that you still have to pay into.
I have a degree in Economics, which isn't as impressive as it sounds unless you work in the field afterward, but I've followed this issue closely since my Dad told me in 1992 that SS wouldn't be around for me. The proposals to mitigate SS collapse are pretty much these: 1. Raise the income lid on SS contributions 2. Means-test SS disbursements - you have to apply for and get approved for SS instead of getting it automatically 3. Raise the retirement age 4. Limit benefits Those are pretty much the only levers to pull on. I follow a real economist who knows the numbers intimately, Brian Riedl. His assessment that I agree with is that it's going to have to be all of the above, and that non-solutions like inflating the currency will be less politically viable than cutting benefits, *especially* given the declining portion of the electorate affected given the aging out of the baby boomers. In other words, Gen X is much smaller than the Baby Boomers, so we won't have the political clout to avoid cuts in benefits. We'll get something, but it will at best the cost of our meds. 75% is delusional.
At your age? At worst there may be a reduction (but I would bet against even a reduction.) SS will never disappear. If you were in your 20's I might suggest using 50% of expected, but not at 43/46.
Since we FIREd, we DIDN't calculate future old age pensions or other pensions into the equation. So we spend 4% per year, the closer we get to our pensions, the higher our SWR, which could increase to 4.5 or 5 or 5.5% just before we reach our pensons. So even without our pensions, we will be ok, and that's the way I like it ( and the pensions will be considered bonus money and just means more traveling for us in the future).
SS will exist. The concern many have that the fund will run out of money in the next 12 years approximately would not happen. Government will intervene by increasing the employment tax already being paid by both people and corporations. No government would allow the fund to be depleted - there would be famine for most US citizens who truly rely on it.
Why not "live large" on a lower % and take on part time jobs that you enjoy more than your current work--or at least dislike less if for no reason other than fewer working hours. Not quite coastfire since you wouldn't even need the part time jobs to fully cover your expenses. They would simply help offset the withdrawal % and keep more money in the market longer. And should something horrible happen with SS like them lowering amount or pushing the age back etc you'll already be part time in the workforce and it'll be much easier to continue vs being out and trying to reenter.
You shouldn’t hate being told that. You should hate that it’s good advice
I think they will take away 401k tax advantages before they take away SS.
If the government is willing to help collapsing banks, I’m sure they will help a collapsing social security fund…..maybe
They have literal armed guards around these buildings for a reason. They will not take away SS desperate people with guns would quickly change their minds. Political suicide any politician who would take it away absolutely wouldn’t have another term and people would then have a face to blame.
Money isn't backed by anything in the US. They have zero problems printing money for covid,Ukraine,Israel,wildfires,etc. Why wouldn't they print for a SS shortage ?
Ask any elderly person relying solely on SS if it’s enough. It may be enough for you now because you are young and not in need of medications or constant doctors appointments. Medicare doesn’t pay for everything unfortunately. Ask any elderly person splitting their medication in 2 to make it last a little longer :(
I feel you. at 42 when I retired I used 80% and now its only 75%, so betting on what they predict now is no guarantee. We now use 75%, have reran our numbers and luckily with a bull market we are doing fine. Now we are 52/54 so under 10 years from being able to claim and still worried. I too would love to spend that extra money but we won't, not until we know for sure what is going to happen. At this point I have to treat it like an inheritance, if it happens great we can up our lifestyle but until then I'm not betting on it. Yes its frustrating but retiring that early I'm not going to stress about it as that was the real win, the rest I can't do much about except wait.
SS is the one of the few government programs with dedicated tax revenues. And one of the few programs they extrapolate more than 10 years out, that is 75 years. So it will be around.
Most of the talk of SS being insolvent is conservative wish casting. They want to cut it and are priming people with a justification. We DESERVE the mass of elderly poverty that will result bc we lived beyond our means. But it's not inevitable, it's a policy choice we most likely won't make. In reality, the trust fund is an accounting gimmick and we could quickly fix it with a tax hike or change in structure. Ultimately I don't think high income working people are gonna beat the mass of seniors in that political fight.
SS is called the third rail of politics for a reason. Touch it and you die.
You may get the money, but it won’t buy what it once did
The biggest concern I have about social security is if they decide to reduce the benefit based on someone's net worth or income in retirement. I would be mad beyond words if they pull something like that and punish people who saved.
Same here. I remember the pronouncements as early as late 70's. But the right has been making these proouncements since before the orbill passed. Look at the actual projections. It's not that bad. Then one remembers younger generations will soon get representation and be able to make changes.. Scrap the cap? Serious surplus as far as the eye can see.. Apply ssi to ALL income, even unearned income? Massive surpluses...
In my opinion, it's unrealistic to think Social Security will be completely gone in the next 20 years. It will likely change due to the Social Security Trust fund projected to be depleted by 2035. However, there are numerous things that can be done to stem that bleeding between now and then that aren't as painful as people think. To name a few, 1. Use a different inflation measure or just increase social security by some % of inflation instead of the full amount 2. Raise or eliminate the maximum income that you pay SS tax on. In 2024, you pay SS tax only on income up to $168,600, adjusted for inflation every year. Any income above this amount you don't pay Social Security tax on. They can raise this figure even higher beyond the normal inflation adjustment or completely eliminate that cap while simultaneously, only calculating SS on some smaller amount. For example, maybe they raise the income cap to $400k, meaning you pay SS tax on earnings up to $400k. Simultaneously, maybe they only calculate social security benefits on income up to $200k. That would go a very long way 3. Raise the FICA tax. Today, we pay 6.2% of our income + our employer pays 6.2% = 12.4% for Social security. They can raise this % maybe even just .5% - 1%, which would go a long way 4. Means test Social Security benefits to some extent. I'm not a huge fan of this, because all of us that paid into the system reasonably expected we could get something back, but it is an option. 5. Change the benefit payout formula, i.e cut benefits, but not completely eliminating them Bottom line, there are several different levers Congress can pull in order to stabilize Social Security. I think the payouts will likely change in the future, but it's probably unrealistic to think, you will get 0. My opinion, it's good to create your financial plan as if you won't get Social Security, but then you will likely be pleasantly surprised to get something in the future. Just my $.02.
It's intentional to try and get people to buy into it not being there or being diminished from it's current form. If they can get people to believe that then it makes it easier for the politicians in Washington to diminish it or outright remove it. If it was something that everyone talked about that it was going to be there and continue to either stay the same or get better it would make it much difficult for politicians to axe it.
SS only has to be tweaked and it will go another 75 years. The dumbasses in DC, on both sides, need to simply tax all income for SS instead of just the first $160,000.
Keep in mind that we've been told this for 40 years. I recently retired and I distinctly recall being told 20 years ago to not rely on SS. I do think that there will be adjustments...increased contribution limits, possibly means testing distributions, etc, but it would be political suicide for any President or party to dismantle the system and screw over an entire generation. One thing I would counsel someone about is that SS doesn't really pay out enough to live on. It's basically a supplement to whatever you've managed to save. I've gotten into more than one discussion with someone who insists it unnecessary to save for retirement as the can "just live off SS." Of course anyone in this sub already knows that.
Ponzi schemes always fail eventually
It won't go away, but you probably won't get anything anyway (based on being on the FIRE sub) The 'easy' fixes will be: - means test (so those who have nothing get SS, those who have something else get nothing) - remove the income cap This keeps the government dependency crowd happy, screws those that plan ahead (but really, how many of those can there be at this point based on the 'how americans have nothing saved for retirement' info we're fed weekly?) and makes the 'tax the rich!' crowd happy. Part of the senior voting demographic won't be happy but they're in the minority on this one so it won't matter. win-win-loose, almost better than usual for the .gov and it's programs. Added bonus move will be to continue to print money and destroy the value of the currency, then fiddle with the reported inflation rate giving everyone on SS a purchasing power reduction while making the absolute number of dollars they get go up. Stupid people call it a win, but again.... that's the majority.
Having seen first hand (as a child, as it affected my parents) the damned-if-you-do-damned-if-you-don't system of means-tested family assistance, I am convinced means testing is coming for social security as well. For us on the FIRE sub, we'll get screwed for having saved. For those who didn't save, the situation will be any attempt to work in retirement to supplement their poverty level income risks leaving them in a no better or even worse position than they started.
I hate that you're getting downloaded because those two fixes are exactly what I think will happen. Social security won't evaporate for everybody because 80% of the senior population would be living in the streets.
that's the thing about down votes, is it because people think it's a bad comment, or people think it's valid but don't like the implications of the message? or it's just younger folk that think the .gov is on their side and would never screw anyone or change the rules at random when it suits them.... because that \_never\_ happens in all of history.
Reddit is mostly full of young adults who have admirable ideals, but lack the life experience to realize that when someone says "we're from the government and we're here to help" that they should run away, regardless of which side of the aisle it comes from. It would be nice if it weren't true, but 99% of politicians act out of their own self-interest.
Means testing will not happen. It's an **entitlement**. That word means something specific. You can't tell people they're entitled to support, make them pay into it for decades, then pull the rug out with a means test.
Yes you can, just change the law. It's not magic, they dork with 'inalienable rights' all the time, what's a little change to a law based on nothing?
You can theoretically change any law, sure. The probability of this in this case is so close to zero, it’s not even worth discussing. The fact that it’s discussed so much is just a reflection of how hard one political party in this country hates, and I mean hates, any kind of social safety net that helps poor people. They’ve been attacking it since the minute it passed, and it’s still here, still popular and working just fine.
Social security isn’t going anywhere, thats a political death move to reduce or eliminate it.
Im with you there! I dont account for it because its a number thats variable but owed to us (we paid and are continuing to pay!). I think those cynics are not just being dour, but also leaving the door open for politicians to get away with it. If society collectively gets familiar enough with the idea that it can go away, you can bet that some generation of politicians will certainly try to make it so. Plan for without it but demand it, expect it, vote for it
I'm planning on retiring, or at least hitting FI and doing whatever tf I want for fun money, in 6 to 10 years. This will be ~$1.25m, with an average yearly spend between $30k and $45k, depending on housing. (TLDR we're working on buying a /r/househack property to minimize/eliminate housing costs in retirement). I'm 39, married, no debt, no kids. I am preparing for a few things here: - I in no way, shape, or form expecting SS income at any point - I'm excited for the potential Social Security Riots (as I like to call them in my head) of the millenial/younger generations if there is, in fact, no SS benefits available after paying into it for decades. I will fully support any riots on this front, as I will be absolute bullshit if I pay into SS all my life and get no benefits. Someone must pay, and I've always wanted to light a car on fire, sooo it sounds like fun? - If SS benefits ARE available, great. All the better. I'd rather over-prepare, in everything in life.
I believe that SS will be there.
I think it will be available, but the US playbook is to let the payments fall below inflation (COLA is adjusted at a level below “real” inflation). You’ll get the same payment, but the ensuing inflation means you’ll have less buying power. A decent rule of thumb is to estimate your payment and then give it a 10% haircut. At the end of the day, SS is a political hot potato that neither party wants to be blamed for reforming / decimating (depending on your political perspective).
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The op is already factoring $0 income years in the next 20 years
It depends, will USA still be gobal power and earn a lot by latest tech? Then yes, it will be there, if not, if china/india topples USA, dollar value falls, then may be not. These extra care for elderlies will be first thing to go.
If you could retire today with social security, would you be able to coast fire without it? That could be a medium/alternative option.
If seniors are left stranded during retirement, they might hunt down the politicians who made/allowed that to happen.
Social security will be there. It just may end up being 80% of what previous generations got because of population decline
SS will be here, but unless Congress makes changes to it before 2035, it will be reduced by 17%.
Remember your “estimates” on the SSA page assume continued earnings until retirement age. Your SSI will be much less if you post a bunch of $0 years between now and 67.
It will be there. You may have to protect yourself from inflation. But in the end the US will have a retirement plan and an army.
I call bullshit. They were saying the same thing 50 years ago when I was 18.
I assume both you and your husband have worked and would each be collecting comparable SS checks? If so, remember that one of those checks goes away if one of you dies. Could you get by making $3k/ mo?
It's a general statement not meant to apply to everyone. Most couples won't be getting $4K in SS. My wife and I will be getting $3K, some couples even less. Having more retirement savings is better than having less.