[Manishi]

For those of you on the journey towards Financial Independence, Retire Early (FIRE), I’m curious—how many of you have taken Social Security benefits into account while calculating your FIRE number?

Given the uncertainty around the future of Social Security, I’m wondering if this is a common consideration or something that people are choosing to exclude.

Did you incorporate potential benefits into your calculations, or are you planning to achieve your FIRE goal without relying on them?

I’d love to hear your thoughts, strategies, and any insights you have on this topic!

[Aaron]

Unless you are able to claim it pretty quickly, I wouldn’t count on it. The current retired person is pulling out WAY more than they paid in.

Unless it receives an overhaul, it will be insolvent in less than a decade.

[Hin]

I consider it but don’t add it to my calculations as it is variable. Figure it will be a nice bonus money later.

[Jon]

I hope they dissolve it and pay everyone what they put in plus some interest….

But we all know the specials in our government won’t do anything good with our money except squander it for the newest social justice warrior crap

[Bryan]

Yes.
“As a result of changes to Social Security enacted in 1983, benefits are now expected to be payable in full on a timely basis until 2037, when the trust fund reserves are projected to become exhausted.

1 At the point where the reserves are used up, continuing taxes are expected to be enough to pay 76 percent of scheduled benefits.

Thus, the Congress will need to make changes to the scheduled benefits and revenue sources for the program in the future.

The Social Security Board of Trustees project that changes equivalent to an immediate reduction in benefits of about 13 percent, 𝗢𝗥

an immediate increase in the combined payroll tax rate from 12.4 percent to 14.4 percent, or some combination of these changes, would be sufficient to allow full payment of the scheduled benefits for the next 75 years.

With the advance warning afforded by the trustees’ presentation of the actuarial status of the trust funds, we have the opportunity to enact legislation with changes in the program’s scheduled revenues and benefits that need not actually take effect for many years in the future.

This approach allows those who will be affected by the changes to have substantial advance warning, allowing them to plan for the changes ahead.

It also allows changes to be phased in on a gradual basis so that there will not be sharp breaks in the benefit or tax levels faced by succeeding generations in the future.

A prime example of this approach was the increase in the NRA—the age at which retirement benefits may be started with no reduction for early retirement—from 65 to 67, enacted in the 1983 Amendments to the Social Security Act.

This change only began to be phased in for individuals reaching age 62 in 2000, 17 years after enactment.

The full increase of the NRA to age 67 will not be complete until 2022.”

[Jimmy]

You shouldn’t depend on ponzi schemes for your retirement.

[Bob]

Social Security isn’t going away. Government has many ways to fund it. Anything short will be political suicide.

They could make some changes …

which would surely change benefits.

That being said …

I don’t consider it in my calculation.

[Manan]

if SS goes, there would be a revolution. That bloc votes. And votes a lot.

Govt would basically get rid of everything else before they get rid of social security.

Because a huge percentage of the retired population relies on SS as their sole or the vast majority of their income.

There is precisely zero chance that will go away while the US exists as a functioning society.

And if it ceases to be a functioning society, your investments and real estate will also be down the drain so it won’t matter.

MAYBE it’ll be reduced by 20%.

But I doubt even that.

Seniors vote. it ain’t going away.

[John]

There seems to be a lot of misunderstandings about the status of Social Security.

About 83% of the amount that grandma receives every month right now is funded by the workers paying into the system right now.

The other 17% comes out of a trust fund, like a bank account.

On it’s current path, that ‘bank account’ is being depleted over time and will run out of money in around 2035, meaning that if nothing is done, grandma’s check, if she’s still alive, is theoretically reduced by 17%.

To keep it fully funded, congress would need to come up with a way to make that 17% back up (raising the SS tax, raising the qualification age, means testing, etc).

Unless you think that the voters will put people in power that will destroy Social Security altogether, there will be some social security available in retirement.

[Kristen]

I don’t. I’m in my late 30s, and don’t want to plan on it being there at any guaranteed time or in any predictable amount just out of an abundance of caution.

It should be gravy, in my calculations.

[Steve]

I used it two different ways:
1. Could I feel better about retiring early if I knew I had that income available at 62-70 as a safety net?

2. Could I feel better about retiring early knowing what the decrease in benefits would be not maxing out more of my 35 years?

Social security is an entitlement for those that paid into it, so if you get your 40 quarters in, there’s a better chance of the US being a colony of China than your benefit going away.

[Kevin]

If you need it to retire early keep working. It will provide income post 67 but if your retiring early I would run the calls without it.

[Dave]

Absolutely
$40k/yr, inflation protected from age 70 for me
Yes, there are political risks, but there are political risks with all aspects of FIRE planning.

The political fallout of reducing benefits after the “trust fund” depletes makes that a very remote possibility

Those under about 40 should prepare for a rising FRA tracking rising longevity (which is what should have happened automatically after 1983)

[Allen]

I do not factor it in as it is just a bonus assuming I even get anything

I rather focus on myself than rely on anyone else

[Richard]

I’m absolutely counting it (with a haircut). If I didn’t I’d be working much longer than I want to.

[David]

Considered it in a way that I know I will eventually get it so it’s icing on the cake.

Yet did I calculate it as part of my FIRE goal? Not really because my goal was to retire early.

Retired last summer at 38 so SS can’t find any of my current retirement.

But eventually, it will give me more money to blow

[Laura]

We are not including it in our plans for future income, but if it’s still there when we hit 62, we are looking at claiming it then and putting the funds in a brokerage account.

[Val]

I have, because I will get survivor benefits when I retire. One I reach MRA, I will consider moving to my own.

If I wait until 70, it would nearly double the survivor amount.

[Roshandra]

Well, I don’t pay into social security at my job so I won’t be getting much at retirement anyway…

so, I don’t even consider it.

[Author]

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