The “I want to retire soon” thread (3 Viewers)

[-OZ-]

What are you using for inflation?

I went back 8 years and use average CPI, which ends up being 3.42% if I mathed right.

Fwiw, our personal inflation rate through 2024 has been 13%, 2025 should bring that down to 8%.

 

[stbugs]

Can some one please check my understanding of social security (as of today)? This is for my wife.

==========

The wife still works and may be interested in taking social security at 62 even if she continues working.

For every $2 she earns over $23,400, she will receive $1 less per year in SS. She is not a high earner as a librarian but this formula will still have an effect on her withdrawal.

But I just noticed this as well at the SSA site:

" The amount that your benefits are reduced, however, isn’t lost. Your benefit will increase at your full retirement age to account for benefits withheld due to earlier earnings."

===========

If I am reading this correctly, her SS will be reduced due to working while withdrawing however, the reduction is not lost, it is only delayed. She will lose some opportunity cost by the delay, but the actual base benefit will not be lost, just delayed until she hits Full Retirement Age (67) or stops working.

Am I understanding this correctly?

I’d be careful there. Unless it says specifically what you get back and when, it’s hard to know. When I first saw the reduced amount, it made me think waiting to collect is better if you still have income because each year you wait the monthly SS increases. I never knew that you could still get that money but part of the calculations to make starting at 62 better is getting all of it up front and investing it. This doesn’t appear to say that at 67 you will get the monthly amount you’d get if you started at 67, just that you’d continue to get your start at 62 payment plus over time you’ll get the reduction amount back (from the start at 62 amount).

 

[NewlyRetired]

Can some one please check my understanding of social security (as of today)? This is for my wife.

==========

The wife still works and may be interested in taking social security at 62 even if she continues working.

For every $2 she earns over $23,400, she will receive $1 less per year in SS. She is not a high earner as a librarian but this formula will still have an effect on her withdrawal.

But I just noticed this as well at the SSA site:

" The amount that your benefits are reduced, however, isn’t lost. Your benefit will increase at your full retirement age to account for benefits withheld due to earlier earnings."

===========

If I am reading this correctly, her SS will be reduced due to working while withdrawing however, the reduction is not lost, it is only delayed. She will lose some opportunity cost by the delay, but the actual base benefit will not be lost, just delayed until she hits Full Retirement Age (67) or stops working.

Am I understanding this correctly?

I’d be careful there. Unless it says specifically what you get back and when, it’s hard to know. When I first saw the reduced amount, it made me think waiting to collect is better if you still have income because each year you wait the monthly SS increases. I never knew that you could still get that money but part of the calculations to make starting at 62 better is getting all of it up front and investing it. This doesn’t appear to say that at 67 you will get the monthly amount you’d get if you started at 67, just that you’d continue to get your start at 62 payment plus over time you’ll get the reduction amount back (from the start at 62 amount).

right. I think that is my understanding as well.

They give a pretty clear example on the SSA web site. As you said, over time, you simply get back what you were reduced because of working, but the money returned to you is ONLY based on what you were reduced by working at the same time as withdrawing.

So eventually, once everything settles down and you have been paid back the reductions, you will get your normal rate that would have gotten at 62 if you had not worked at the same time.

The paying back of what is reduced for the short time one is still working, makes it even easier to take things out at 62. If you did not get repaid what you would be reduced, then the calculations may change for each individual.

Here is a lot of good information:

https://www.ssa.gov/pubs/EN-05-10069.pdf

And if one wants to continue working late while with drawing at 62, once you hit full retirement age (67), you would get the full rate (from the 62 calcs) no matter how much you earn per year. So the reduction is at max 5 years and then would be returned to you over time.

 

[jamny]

Really enjoying How to Retire by Christine Benz. Listening to the audiobook. Each chapter is her interviewing someone with a particular expertise. Really informative. I'll probably wind up buying the book.

 

[Yo Mama]

What overall average rate of return do you all assume in your retirement modeling/planning? Do you make it dependent on your portfolio mix assumptions?

I’m currently using a conservative rate in my modeling and wondering if I should assume higher. I plan on using a 60/40 or 70/30 mix (I have a pension so I am planning on a slightly higher level of risk in my investments).

To APK’s question above, I did put in a way to forecast a bear market scenario (at different % drops) at the start of my projected retirement.

4% plus inflation. It’s conservative but if it’s higher, we’re able to give more.

Thanks - I’m currently assuming 3% plus inflation and wonder if I’m being way too conservative.

What are you using for inflation?

I’ve been using 6% returns and 3% inflation.

 

[Judge Smails]

Really enjoying How to Retire by Christine Benz. Listening to the audiobook. Each chapter is her interviewing someone with a particular expertise. Really informative. I'll probably wind up buying the book.

Great book

 

[jamny]

I'm looking into possibly using 5% without taking increases in inflation. A quick calculation, using 2.5% inflation, shows that it would take about 10 years of 4% + inflation to hit what I would get using 5%. At that point I'd continue forward with 5% + inflation.
Obviously we'd adjust if we had to at some time but this would give us a little more in the early years.

 

[Desert_Power]

What overall average rate of return do you all assume in your retirement modeling/planning? Do you make it dependent on your portfolio mix assumptions?

I’m currently using a conservative rate in my modeling and wondering if I should assume higher. I plan on using a 60/40 or 70/30 mix (I have a pension so I am planning on a slightly higher level of risk in my investments).

To APK’s question above, I did put in a way to forecast a bear market scenario (at different % drops) at the start of my projected retirement.

4% plus inflation. It’s conservative but if it’s higher, we’re able to give more.

Thanks - I’m currently assuming 3% plus inflation and wonder if I’m being way too conservative.

What are you using for inflation?

I’ve been using 6% returns and 3% inflation.

So 9% nominal returns? That isn't bad.

 

[Yo Mama]

What overall average rate of return do you all assume in your retirement modeling/planning? Do you make it dependent on your portfolio mix assumptions?

I’m currently using a conservative rate in my modeling and wondering if I should assume higher. I plan on using a 60/40 or 70/30 mix (I have a pension so I am planning on a slightly higher level of risk in my investments).

To APK’s question above, I did put in a way to forecast a bear market scenario (at different % drops) at the start of my projected retirement.

4% plus inflation. It’s conservative but if it’s higher, we’re able to give more.

Thanks - I’m currently assuming 3% plus inflation and wonder if I’m being way too conservative.

What are you using for inflation?

I’ve been using 6% returns and 3% inflation.

So 9% nominal returns? That isn't bad.

No, 6% nominal returns - 3% higher than inflation of 3%.

 

[menobrown]

Anyone run into this?

I'm 50. I could realistically retire now. I get military disability money. I have full health coverage through the VA. I have a federal pension in waiting to cash. They penalize you 5% for every year earlier then 57 so I'm kinda waiting a bit. We have lived financially responsible our entire lives really. Nearly own our home. I could get away with retiring right now. What's stopping me? My jealous wife. Shes a full time nurse that makes great money. I just don't think she could ever accept me retiring before her. So I picked up a job that has the least responsibility I've ever had. I'll show her until she caves. Ha ha

We’re kind of in the opposite position. She works part time at a job that pays horribly but she likes. But more importantly, she volunteers a lot.
I keep working. I’m somewhat jealous but not enough to change anything.

A lot of folks, me included, wake up one morning and decide 100% to retire . Having seen too many co-workers kick the bucket, either before retirement, or shortly after, I didn't want to be one of those people. I'm in a good spot financially and didn't want to fall over dead at my desk and never get to experience a full retirement. There are too many other things to enjoy in this world than working. I did that for over 42 years in my field, and 50+ years overall. Isn't that enough?

Understood and agreed. I just haven’t reached the point yet where life without the job would be better than with it. One “problem” is all but two years expenses is held in retirement accounts. I know there are ways like SEPP to get those funds, but I’m not work quite ready for that yet. Then there’s that we want a lake house, but also have kids in school. If we had both places our expenses would jump quite a bit. Doable soon if I’m working, not if not.

Then of course there’s the fear of the unknown. I do my best to plan around that while considering its effect.

Of course. I was speaking only if one is financially able / ready to retire. I never understood those that retire and go back to work because they are bored. There is no way on God's green earth would I ever go back to work. Hell, if I can't think of things to do other than work, then I'm not trying. Sorry, but 42 years of work is enough. I like to believe in turning the chapter on that and finish out the rest of my life with new and exciting adventures. I cannot tell you how much of a freedom feeling I have now.

Fully with you. My countdown is on now, less than 5 years.
I know I won't be bored.
There are so many things I want to do around here, with no time to do it all.

I do plan to work part-time consulting. Like 3 months a year, as I do enjoy the work I do in the Power Platform.
Plus need to cover medical until 5 years later when I hit 67 and can get S.S. And Medicare.

Insurance isnt as big of deal as everyone makes it out to be. ACA is cheap as long as you manage your income.

Yup. This is something worth thoroughly researching before retiring before 65.

Health insurance isn't cheap and is something you can't do without. Hell, even with Medicare and supplemental insurance you pay a pretty monthly penny, especially if it includes a spouse. I know a guy I worked with who retired a couple of months before me, he is 64, and his wife is younger, but will bite the bullet and will have to pay a lot for health insurance for both. He will be 65 next year, so that helps that he can go on Medicare at that point, but his wife is in her early 60s and has MS, so that will cost a lot until she turns 65.

Depends on what you mean by “pretty penny”, but with traditional Medicare (not Medicare advantage) most folks get premium free part A, pay $185/m for part B, around $120-150/m for a supplement, and likely under $20/m for a part D plan. With all that, you really don’t have any out of pocket costs, other than for expensive Rx, and that will depend on the coverage of your part D plan. Moreover, the out of pocket costs, as well as the part B premiums can both be paid from any remaining HSA funds you might still have.

My point is that if you retire before 65, especially those way under 65, you have to take into account healthcare cost and that isn't a non-issue for a lot of people. You may not be getting social security for several years and you're paying out of pocket for expensive healthcare insurance because you can't go on Medicare yet. That's a big deal to a lot of people. Sure, this probably isn't an issue for those that have saved and invested well, and / or has a large pension, but being able to retire early, especially those in their 50s, it may not be so easy. Not for some that have a costly lifestyle. For example, my lifestyle is about 9K a month and the only debt I have is a mortgage, which I owe 100K on. Thankfully I'm well ahead of the game at 66. But I wasn't able to retire before I did. Not if I wanted to maintain my current lifestyle.

Does anyone here personally know JohnnyU? Maybe in a fantasy league with him?

Just wanting to check on him as he's a very frequent poster and the date his made the reply above was the last date he posted here and this would not be the time of the year he'd go silent or away from the boards. I tried sending him a PM yesterday.

 

[Riffraff]

Hopefully the 'You Earned It, You Keep It' Act will pass. Helps not only the retire early crowd, but all working Americans. More money for all is a good thing.
Senator Gallego’s ‘You Earned It, You Keep It Act’ aims to permanently eliminate taxes on Social Security benefits

Link has a nice chart breaking down what is being proposed (no taxes on Social Security for everyone) compared to what Pres Trump promised to the common person but delivered for the rich in the 'One Big Beautiful Bill' compared to the current law.

 

[The Z Machine]

Hopefully the 'You Earned It, You Keep It' Act will pass. Helps not only the retire early crowd, but all working Americans. More money for all is a good thing.
Senator Gallego’s ‘You Earned It, You Keep It Act’ aims to permanently eliminate taxes on Social Security benefits

Link has a nice chart breaking down what is being proposed (no taxes on Social Security for everyone) compared to what Pres Trump promised to the common person but delivered for the rich in the 'One Big Beautiful Bill' compared to the current law.

Your link sucks and spams me with a virus screener thing, sending me to the Google play store.

 

[Riffraff]

Hopefully the 'You Earned It, You Keep It' Act will pass. Helps not only the retire early crowd, but all working Americans. More money for all is a good thing.
Senator Gallego’s ‘You Earned It, You Keep It Act’ aims to permanently eliminate taxes on Social Security benefits

Link has a nice chart breaking down what is being proposed (no taxes on Social Security for everyone) compared to what Pres Trump promised to the common person but delivered for the rich in the 'One Big Beautiful Bill' compared to the current law.

Your link sucks and spams me with a virus screener thing, sending me to the Google play store.

It's a legit California News outlet, so dunno.

I don't have the same issues, but I do have a VPN, Ad-Block, and Firefox built in stuff like a lot of people do nowadays. Unsure of your web browser and associated set-up.

It's good info on the Act though.

 

[The Z Machine]

Hopefully the 'You Earned It, You Keep It' Act will pass. Helps not only the retire early crowd, but all working Americans. More money for all is a good thing.
Senator Gallego’s ‘You Earned It, You Keep It Act’ aims to permanently eliminate taxes on Social Security benefits

Link has a nice chart breaking down what is being proposed (no taxes on Social Security for everyone) compared to what Pres Trump promised to the common person but delivered for the rich in the 'One Big Beautiful Bill' compared to the current law.

Your link sucks and spams me with a virus screener thing, sending me to the Google play store.

It's a legit California News outlet, so dunno.

I don't have the same issues, but I do have a VPN, Ad-Block, and Firefox built in stuff like a lot of people do nowadays. Unsure of your web browser and associated set-up.

It's good info on the Act though.

Duck duck go browser on my android phone. I wasn't using my VPN though, so it saw my IP as being from Switzerland. Changed to the USA based VPN and the pop-up went away...

 

[-OZ-]

Hopefully the 'You Earned It, You Keep It' Act will pass. Helps not only the retire early crowd, but all working Americans. More money for all is a good thing.
Senator Gallego’s ‘You Earned It, You Keep It Act’ aims to permanently eliminate taxes on Social Security benefits

Link has a nice chart breaking down what is being proposed (no taxes on Social Security for everyone) compared to what Pres Trump promised to the common person but delivered for the rich in the 'One Big Beautiful Bill' compared to the current law.

Your link sucks and spams me with a virus screener thing, sending me to the Google play store.

It's a legit California News outlet, so dunno.

I don't have the same issues, but I do have a VPN, Ad-Block, and Firefox built in stuff like a lot of people do nowadays. Unsure of your web browser and associated set-up.

It's good info on the Act though.

Duck duck go browser on my android phone. I wasn't using my VPN though, so it saw my IP as being from Switzerland. Changed to the USA based VPN and the pop-up went away...

What VPN do y’all recommend?

 

[Riffraff]

Hopefully the 'You Earned It, You Keep It' Act will pass. Helps not only the retire early crowd, but all working Americans. More money for all is a good thing.
Senator Gallego’s ‘You Earned It, You Keep It Act’ aims to permanently eliminate taxes on Social Security benefits

Link has a nice chart breaking down what is being proposed (no taxes on Social Security for everyone) compared to what Pres Trump promised to the common person but delivered for the rich in the 'One Big Beautiful Bill' compared to the current law.

Your link sucks and spams me with a virus screener thing, sending me to the Google play store.

It's a legit California News outlet, so dunno.

I don't have the same issues, but I do have a VPN, Ad-Block, and Firefox built in stuff like a lot of people do nowadays. Unsure of your web browser and associated set-up.

It's good info on the Act though.

Duck duck go browser on my android phone. I wasn't using my VPN though, so it saw my IP as being from Switzerland. Changed to the USA based VPN and the pop-up went away...

What VPN do y’all recommend?

No idea if they are 'the best' at anything. I just happened to pull the rare smart move and join when they were a start-up (10ish years now). Won't change to another as I'm a Pro lifetime member subscription (paid just 1 payment back in the day for lifetime account).

I really like that they don't take themselves seriously in their commentary/updates. You sometimes have to wonder if they are serious or not. Expect some good ones on April Fools Day or 4/20. They mock themselves, even have 'they hate us' Customer reviews.

The usual goodies nowadays:
- IPs like you are anywhere in the world, including Antarctica. Location usage (traffic) for each IP. Sort locations by ms/latency.
- Physical servers around the world, not virtual ones.
- Filters out various types of sites / ads / social media / gambling / porn / malware each with their own on/off button.
- It's your Firewall.
- Various connection protocols for IP security. Example IKEv2.
- 10 devices so you can have it on a couple computers + tablets + phones.
- They don't collect logs, but they are outside the USA's legal enforcement as the company is in Canada.

https://windscribe.com/

 

[BeTheMatch]

Anyone run into this?

I'm 50. I could realistically retire now. I get military disability money. I have full health coverage through the VA. I have a federal pension in waiting to cash. They penalize you 5% for every year earlier then 57 so I'm kinda waiting a bit. We have lived financially responsible our entire lives really. Nearly own our home. I could get away with retiring right now. What's stopping me? My jealous wife. Shes a full time nurse that makes great money. I just don't think she could ever accept me retiring before her. So I picked up a job that has the least responsibility I've ever had. I'll show her until she caves. Ha ha

We’re kind of in the opposite position. She works part time at a job that pays horribly but she likes. But more importantly, she volunteers a lot.
I keep working. I’m somewhat jealous but not enough to change anything.

A lot of folks, me included, wake up one morning and decide 100% to retire . Having seen too many co-workers kick the bucket, either before retirement, or shortly after, I didn't want to be one of those people. I'm in a good spot financially and didn't want to fall over dead at my desk and never get to experience a full retirement. There are too many other things to enjoy in this world than working. I did that for over 42 years in my field, and 50+ years overall. Isn't that enough?

Understood and agreed. I just haven’t reached the point yet where life without the job would be better than with it. One “problem” is all but two years expenses is held in retirement accounts. I know there are ways like SEPP to get those funds, but I’m not work quite ready for that yet. Then there’s that we want a lake house, but also have kids in school. If we had both places our expenses would jump quite a bit. Doable soon if I’m working, not if not.

Then of course there’s the fear of the unknown. I do my best to plan around that while considering its effect.

Of course. I was speaking only if one is financially able / ready to retire. I never understood those that retire and go back to work because they are bored. There is no way on God's green earth would I ever go back to work. Hell, if I can't think of things to do other than work, then I'm not trying. Sorry, but 42 years of work is enough. I like to believe in turning the chapter on that and finish out the rest of my life with new and exciting adventures. I cannot tell you how much of a freedom feeling I have now.

Fully with you. My countdown is on now, less than 5 years.
I know I won't be bored.
There are so many things I want to do around here, with no time to do it all.

I do plan to work part-time consulting. Like 3 months a year, as I do enjoy the work I do in the Power Platform.
Plus need to cover medical until 5 years later when I hit 67 and can get S.S. And Medicare.

Insurance isnt as big of deal as everyone makes it out to be. ACA is cheap as long as you manage your income.

Yup. This is something worth thoroughly researching before retiring before 65.

Health insurance isn't cheap and is something you can't do without. Hell, even with Medicare and supplemental insurance you pay a pretty monthly penny, especially if it includes a spouse. I know a guy I worked with who retired a couple of months before me, he is 64, and his wife is younger, but will bite the bullet and will have to pay a lot for health insurance for both. He will be 65 next year, so that helps that he can go on Medicare at that point, but his wife is in her early 60s and has MS, so that will cost a lot until she turns 65.

Depends on what you mean by “pretty penny”, but with traditional Medicare (not Medicare advantage) most folks get premium free part A, pay $185/m for part B, around $120-150/m for a supplement, and likely under $20/m for a part D plan. With all that, you really don’t have any out of pocket costs, other than for expensive Rx, and that will depend on the coverage of your part D plan. Moreover, the out of pocket costs, as well as the part B premiums can both be paid from any remaining HSA funds you might still have.

My point is that if you retire before 65, especially those way under 65, you have to take into account healthcare cost and that isn't a non-issue for a lot of people. You may not be getting social security for several years and you're paying out of pocket for expensive healthcare insurance because you can't go on Medicare yet. That's a big deal to a lot of people. Sure, this probably isn't an issue for those that have saved and invested well, and / or has a large pension, but being able to retire early, especially those in their 50s, it may not be so easy. Not for some that have a costly lifestyle. For example, my lifestyle is about 9K a month and the only debt I have is a mortgage, which I owe 100K on. Thankfully I'm well ahead of the game at 66. But I wasn't able to retire before I did. Not if I wanted to maintain my current lifestyle.

Does anyone here personally know JohnnyU? Maybe in a fantasy league with him?

Just wanting to check on him as he's a very frequent poster and the date his made the reply above was the last date he posted here and this would not be the time of the year he'd go silent or away from the boards. I tried sending him a PM yesterday.

Yeah, he's been on our fantasy league site today.

 

[menobrown]

Anyone run into this?

I'm 50. I could realistically retire now. I get military disability money. I have full health coverage through the VA. I have a federal pension in waiting to cash. They penalize you 5% for every year earlier then 57 so I'm kinda waiting a bit. We have lived financially responsible our entire lives really. Nearly own our home. I could get away with retiring right now. What's stopping me? My jealous wife. Shes a full time nurse that makes great money. I just don't think she could ever accept me retiring before her. So I picked up a job that has the least responsibility I've ever had. I'll show her until she caves. Ha ha

We’re kind of in the opposite position. She works part time at a job that pays horribly but she likes. But more importantly, she volunteers a lot.
I keep working. I’m somewhat jealous but not enough to change anything.

A lot of folks, me included, wake up one morning and decide 100% to retire . Having seen too many co-workers kick the bucket, either before retirement, or shortly after, I didn't want to be one of those people. I'm in a good spot financially and didn't want to fall over dead at my desk and never get to experience a full retirement. There are too many other things to enjoy in this world than working. I did that for over 42 years in my field, and 50+ years overall. Isn't that enough?

Understood and agreed. I just haven’t reached the point yet where life without the job would be better than with it. One “problem” is all but two years expenses is held in retirement accounts. I know there are ways like SEPP to get those funds, but I’m not work quite ready for that yet. Then there’s that we want a lake house, but also have kids in school. If we had both places our expenses would jump quite a bit. Doable soon if I’m working, not if not.

Then of course there’s the fear of the unknown. I do my best to plan around that while considering its effect.

Of course. I was speaking only if one is financially able / ready to retire. I never understood those that retire and go back to work because they are bored. There is no way on God's green earth would I ever go back to work. Hell, if I can't think of things to do other than work, then I'm not trying. Sorry, but 42 years of work is enough. I like to believe in turning the chapter on that and finish out the rest of my life with new and exciting adventures. I cannot tell you how much of a freedom feeling I have now.

Fully with you. My countdown is on now, less than 5 years.
I know I won't be bored.
There are so many things I want to do around here, with no time to do it all.

I do plan to work part-time consulting. Like 3 months a year, as I do enjoy the work I do in the Power Platform.
Plus need to cover medical until 5 years later when I hit 67 and can get S.S. And Medicare.

Insurance isnt as big of deal as everyone makes it out to be. ACA is cheap as long as you manage your income.

Yup. This is something worth thoroughly researching before retiring before 65.

Health insurance isn't cheap and is something you can't do without. Hell, even with Medicare and supplemental insurance you pay a pretty monthly penny, especially if it includes a spouse. I know a guy I worked with who retired a couple of months before me, he is 64, and his wife is younger, but will bite the bullet and will have to pay a lot for health insurance for both. He will be 65 next year, so that helps that he can go on Medicare at that point, but his wife is in her early 60s and has MS, so that will cost a lot until she turns 65.

Depends on what you mean by “pretty penny”, but with traditional Medicare (not Medicare advantage) most folks get premium free part A, pay $185/m for part B, around $120-150/m for a supplement, and likely under $20/m for a part D plan. With all that, you really don’t have any out of pocket costs, other than for expensive Rx, and that will depend on the coverage of your part D plan. Moreover, the out of pocket costs, as well as the part B premiums can both be paid from any remaining HSA funds you might still have.

My point is that if you retire before 65, especially those way under 65, you have to take into account healthcare cost and that isn't a non-issue for a lot of people. You may not be getting social security for several years and you're paying out of pocket for expensive healthcare insurance because you can't go on Medicare yet. That's a big deal to a lot of people. Sure, this probably isn't an issue for those that have saved and invested well, and / or has a large pension, but being able to retire early, especially those in their 50s, it may not be so easy. Not for some that have a costly lifestyle. For example, my lifestyle is about 9K a month and the only debt I have is a mortgage, which I owe 100K on. Thankfully I'm well ahead of the game at 66. But I wasn't able to retire before I did. Not if I wanted to maintain my current lifestyle.

Does anyone here personally know JohnnyU? Maybe in a fantasy league with him?

Just wanting to check on him as he's a very frequent poster and the date his made the reply above was the last date he posted here and this would not be the time of the year he'd go silent or away from the boards. I tried sending him a PM yesterday.

Yeah, he's been on our fantasy league site today.

That's great to hear, thanks for the update.

 

[Gally]

So my wife was looking into your 401K withdraw situation for use with the rule of 55 as we are looking to retire before you can start withdrawing without penalties. It seems here company does not give you the option of a flat withdraw value. Instead they make you provide a "years until you hit zero" number. For example, you tell them 25 years and they divide your total value by the 25 years and give you a monthly payment based on that. It doesn't seem like you can just tell them a monthly withdraw value. Obviously this method means your withdraw value will vary over time as your account increase or decreases in value and gets "recalculated". This makes no sense to me.

Anybody else seen this?

 

[Sand]

What overall average rate of return do you all assume in your retirement modeling/planning? Do you make it dependent on your portfolio mix assumptions?

I’m currently using a conservative rate in my modeling and wondering if I should assume higher. I plan on using a 60/40 or 70/30 mix (I have a pension so I am planning on a slightly higher level of risk in my investments).

To APK’s question above, I did put in a way to forecast a bear market scenario (at different % drops) at the start of my projected retirement.

4% plus inflation. It’s conservative but if it’s higher, we’re able to give more.

I think in the last clash flow analysis I did it was 6% return and 2.5% for inflation. So close to what OZ said.

This is what I use, as well.

 

[The Z Machine]

Hopefully the 'You Earned It, You Keep It' Act will pass. Helps not only the retire early crowd, but all working Americans. More money for all is a good thing.
Senator Gallego’s ‘You Earned It, You Keep It Act’ aims to permanently eliminate taxes on Social Security benefits

Link has a nice chart breaking down what is being proposed (no taxes on Social Security for everyone) compared to what Pres Trump promised to the common person but delivered for the rich in the 'One Big Beautiful Bill' compared to the current law.

Your link sucks and spams me with a virus screener thing, sending me to the Google play store.

It's a legit California News outlet, so dunno.

I don't have the same issues, but I do have a VPN, Ad-Block, and Firefox built in stuff like a lot of people do nowadays. Unsure of your web browser and associated set-up.

It's good info on the Act though.

Duck duck go browser on my android phone. I wasn't using my VPN though, so it saw my IP as being from Switzerland. Changed to the USA based VPN and the pop-up went away...

What VPN do y’all recommend?

I use NordVPN. I don't think it'll work in China though. Almost no VPN works there now it seems.

 

[The Z Machine]

I used to have Windscibe (and yes, they are hillarious), but switched to Nord when I put them head to head in speed tests from my place.

 

[Sand]

The 4% Rule is More Like the 2% Rule.

 

[The Z Machine]

The 4% Rule is More Like the 2% Rule.

Aren't RMDs from IRAs like 5% ? I guess this applies to non retirement accounts where there's no RMD.

 

[-OZ-]

The 4% Rule is More Like the 2% Rule.

Basically, people underspend.

 

[Yo Mama]

Question on spousal social security to make sure I understand it right.

Scenario - Let’s say a married couple is the same age. The higher earner will qualify for $3,000 a month at age 65 and the lower earner will qualify for $800 a month at age 62.

Would the lower earner collect $800 a month starting at age 62, and then that bumps up to $1,500 (50%) once the higher earner starts collecting their SS at age 65?

Basically, does the 50% rule start once the higher earner starts collecting, even if that is before full retirement age (67)?

Thanks again to all the super smart peeps in this thread!

 

[NewlyRetired]

Question on spousal social security to make sure I understand it right.

Scenario - Let’s say a married couple is the same age. The higher earner will qualify for $3,000 a month at age 65 and the lower earner will qualify for $800 a month at age 62.

Would the lower earner collect $800 a month starting at age 62, and then that bumps up to $1,500 (50%) once the higher earner starts collecting their SS at age 65?

Basically, does the 50% rule start once the higher earner starts collecting, even if that is before full retirement age (67)?

Thanks again to all the super smart peeps in this thread!

my understanding is that the higher earner must already be taking the SS benefits for the lower earning spouse to start taking the 50%.

It is also my understanding that if the lower earning spouse wants to use the high earners SS, then the lower earner will not get to the full 50% until 67. The 50% number will be lowered, by a formula I do not know, until the lower earner reaches 67.

 

[New Binky the Doormat]

Question on spousal social security to make sure I understand it right.

Scenario - Let’s say a married couple is the same age. The higher earner will qualify for $3,000 a month at age 65 and the lower earner will qualify for $800 a month at age 62.

Would the lower earner collect $800 a month starting at age 62, and then that bumps up to $1,500 (50%) once the higher earner starts collecting their SS at age 65?

Basically, does the 50% rule start once the higher earner starts collecting, even if that is before full retirement age (67)?

Thanks again to all the super smart peeps in this thread!

my understanding is that the higher earner must already be taking the SS benefits for the lower earning spouse to start taking the 50%.

It is also my understanding that if the lower earning spouse wants to use the high earners SS, then the lower earner will not get to the full 50% until 67. The 50% number will be lowered, by a formula I do not know, until the lower earner reaches 67.

anyone have a specialist for these kinds of questions on how to best manage social security along with - income, age, etc.? None of the CFPs around here say they do that. Looking for a fixed fee consultation/recommendation. I figure it's something fairly easily done remotely.

 

[jamny]

Here's a good SSA calculator

 

[NewlyRetired]

Here's a good SSA calculator

I built one of these out of a spreadsheet recently.

After doing some calcs, we decided we are both going to take out at 62.

Note that there is no one right answer as to when to take out as the formulas require two items that are not 100% certain. That being life expectancy and rate of return. You can lower the variables a bit by choosing a very conservative rate of return.

 

[jamny]

We'll probably play it by ear at first but the plan is to both hold off until 70. Hard to beat that 7% increase from 62-67 and the 8% from 67-70.
As long as we live to 78!

 

[NewlyRetired]

We'll probably play it by ear at first but the plan is to both hold off until 70. Hard to beat that 7% increase from 62-67 and the 8% from 67-70.
As long as we live to 78!

Make sure you run the numbers using a growth rate if you take out early. I was thinking exactly like you at first and then I forgot that the money we take out at 62 will have a chance to grow as well in the years between 62 and 70. Depending upon what you put for a growth rate, you will find that age 78 number will grow fairly quickly into the 80's.

If you intend to spend the SS and won't have a chance to have it grow, then ignore the above.

 

[gianmarco]

We'll probably play it by ear at first but the plan is to both hold off until 70. Hard to beat that 7% increase from 62-67 and the 8% from 67-70.
As long as we live to 78!

Make sure you run the numbers using a growth rate if you take out early. I was thinking exactly like you at first and then I forgot that the money we take out at 62 will have a chance to grow as well in the years between 62 and 70. Depending upon what you put for a growth rate, you will find that age 78 number will grow fairly quickly into the 80's.

If you intend to spend the SS and won't have a chance to have it grow, then ignore the above.

Exactly. Then the break even point isn't until almost 90 years old last time I looked. By that point, I think it becomes moot if I would have come ahead if I had waited. Heck, if I even make it that far, I'd have to remember the decision to begin with.

And that's ignoring the access to the money early if you need it and/or the possibility it all goes away.

 

[jamny]

We'll probably play it by ear at first but the plan is to both hold off until 70. Hard to beat that 7% increase from 62-67 and the 8% from 67-70.
As long as we live to 78!

Make sure you run the numbers using a growth rate if you take out early. I was thinking exactly like you at first and then I forgot that the money we take out at 62 will have a chance to grow as well in the years between 62 and 70. Depending upon what you put for a growth rate, you will find that age 78 number will grow fairly quickly into the 80's.

If you intend to spend the SS and won't have a chance to have it grow, then ignore the above.

Exactly. Then the break even point isn't until almost 90 years old last time I looked. By that point, I think it becomes moot if I would have come ahead if I had waited. Heck, if I even make it that far, I'd have to remember the decision to begin with.

And that's ignoring the access to the money early if you need it and/or the possibility it all goes away.

The possibility that it goes away is definitely a risk and we would change our mind if we decided we needed the money. As it is, I'll treat it like an annuity that will start paying when I hit 70.
I can see taking it if you need it or if you aren't generally healthy or have a family history of short lifespans.
It's a tough decision either way.

 

[stbugs]

We'll probably play it by ear at first but the plan is to both hold off until 70. Hard to beat that 7% increase from 62-67 and the 8% from 67-70.
As long as we live to 78!

Make sure you run the numbers using a growth rate if you take out early. I was thinking exactly like you at first and then I forgot that the money we take out at 62 will have a chance to grow as well in the years between 62 and 70. Depending upon what you put for a growth rate, you will find that age 78 number will grow fairly quickly into the 80's.

If you intend to spend the SS and won't have a chance to have it grow, then ignore the above.

Exactly. Then the break even point isn't until almost 90 years old last time I looked. By that point, I think it becomes moot if I would have come ahead if I had waited. Heck, if I even make it that far, I'd have to remember the decision to begin with.

And that's ignoring the access to the money early if you need it and/or the possibility it all goes away.

There’s two things we’ll have to figure out. The first one is losing 50% if you are still making money (even after tax brokerage earnings). The money you lose comes back later but you lose a chunk of growth that made retire at 62 potentially better.

The other big thing is that the nut you build up taking at 62 is yours/your heirs. You calculate the earnings per year based on that extra $$$ you get from 62-70, but the people treating taking at 70 as an annuity may not realize that they don’t “own” that extra money that people at 62 get.

Personally, I’m still not sure what I’m going to do and since we’ve got 7/8 years before we can even choose the tax laws and market performance may drive it more. If we get basically flat growth in the market for a decade (I’ve seen a lot of that predicted after the large gains we’ve seen), I might be more tempted to get as much as I can early to catch that next bull.

 

[Gally]

If you intend to spend the SS and won't have a chance to have it grow, then ignore the above.

But if that is the case then you need the money and therefore can't wait until the later date.

 

[NewlyRetired]

If you intend to spend the SS and won't have a chance to have it grow, then ignore the above.

But if that is the case then you need the money and therefore can't wait until the later date.

I meant to ignore the growth rate but what you said is correct.

 

[jamny]

We'll probably play it by ear at first but the plan is to both hold off until 70. Hard to beat that 7% increase from 62-67 and the 8% from 67-70.
As long as we live to 78!

Make sure you run the numbers using a growth rate if you take out early. I was thinking exactly like you at first and then I forgot that the money we take out at 62 will have a chance to grow as well in the years between 62 and 70. Depending upon what you put for a growth rate, you will find that age 78 number will grow fairly quickly into the 80's.

If you intend to spend the SS and won't have a chance to have it grow, then ignore the above.

Exactly. Then the break even point isn't until almost 90 years old last time I looked. By that point, I think it becomes moot if I would have come ahead if I had waited. Heck, if I even make it that far, I'd have to remember the decision to begin with.

And that's ignoring the access to the money early if you need it and/or the possibility it all goes away.

There’s two things we’ll have to figure out. The first one is losing 50% if you are still making money (even after tax brokerage earnings). The money you lose comes back later but you lose a chunk of growth that made retire at 62 potentially better.

The other big thing is that the nut you build up taking at 62 is yours/your heirs. You calculate the earnings per year based on that extra $$$ you get from 62-70, but the people treating taking at 70 as an annuity may not realize that they don’t “own” that extra money that people at 62 get.

Personally, I’m still not sure what I’m going to do and since we’ve got 7/8 years before we can even choose the tax laws and market performance may drive it more. If we get basically flat growth in the market for a decade (I’ve seen a lot of that predicted after the large gains we’ve seen), I might be more tempted to get as much as I can early to catch that next bull.

The bolded is definitely something I'm keeping an eye on. I'll be 62 next year so the next couple of years will help make the decision.

 

[Gally]

If you intend to spend the SS and won't have a chance to have it grow, then ignore the above.

But if that is the case then you need the money and therefore can't wait until the later date.

I meant to ignore the growth rate but what you said is correct.

I knew what you meant.

I just can't see any reason to wait to start collecting. Getting a bird in the hand that you can invest and grow now especially not knowing if you will even get to the break even point seems like the best route to me.

I guess the only reason I can see waiting is if you have some income stream now that will go away later and that difference in monthly payments will make or break you down the road. But I still can't really see how that situation can be.

 

[matttyl]

If you intend to spend the SS and won't have a chance to have it grow, then ignore the above.

But if that is the case then you need the money and therefore can't wait until the later date.

I meant to ignore the growth rate but what you said is correct.

I knew what you meant.

I just can't see any reason to wait to start collecting. Getting a bird in the hand that you can invest and grow now especially not knowing if you will even get to the break even point seems like the best route to me.

I guess the only reason I can see waiting is if you have some income stream now that will go away later and that difference in monthly payments will make or break you down the road. But I still can't really see how that situation can be.

Inherited IRA that must be spent down (and taxed) over 10 years is one.

Legitimately not needing the money now because you have enough in pre tax that you’d like to spend down from 60-70 (before RMDs) while we have low taxes is another.

 

[-OZ-]

I just can't see any reason to wait to start collecting

I plan on living well past the break even date and my wife to outlive me by a long time. My pension goes when I die but she’ll get my SS. So I’ll most likely wait to maximize her draw after I

 

[-OZ-]

Legitimately not needing the money now because you have enough in pre tax that you’d like to spend down from 60-70 (before RMDs) while we have low taxes is another.

This too. Most likely our pre-tax will be well over a million, which we’ll spend before taking SS.

 

[Gally]

I just can't see any reason to wait to start collecting

I plan on living well past the break even date and my wife to outlive me by a long time. My pension goes when I die but she’ll get my SS. So I’ll most likely wait to maximize her draw after I

But couldn't she better off if you took that money now and invested and let it grow? I guess that is the trick and there are no guarantees that your plan of living past the break even date ever happens.

 

[jamny]

I mentioned Andy Panko's podcast so I decided to jump ahead and listen to his advice on the current topic being discussed.

I can't find a direct link but here's the episode and his podcast webpage
#106 - How to decide the optimal time to start your Social Security benefits

You can jump ahead to 13:30 if you want to get past the basics. Especially interesting is the tax discussion towards the end.

 

[-OZ-]

I just can't see any reason to wait to start collecting

I plan on living well past the break even date and my wife to outlive me by a long time. My pension goes when I die but she’ll get my SS. So I’ll most likely wait to maximize her draw after I

But couldn't she better off if you took that money now and invested and let it grow? I guess that is the trick and there are no guarantees that your plan of living past the break even date ever happens.

Depends how long she lives.
I manage the investments, she’d be better off with the larger, inflation adjusted annuity.

ETA - it wouldn’t be now anyway, I haven’t reached 50 yet.

 

[matttyl]

I just can't see any reason to wait to start collecting

I plan on living well past the break even date and my wife to outlive me by a long time. My pension goes when I die but she’ll get my SS. So I’ll most likely wait to maximize her draw after I

But couldn't she better off if you took that money now and invested and let it grow? I guess that is the trick and there are no guarantees that your plan of living past the break even date ever happens.

No guarantee of your investing actually making money, either. There *is* a guarantee of a higher payout if you wait, though.

 

[NutterButter]

I just can't see any reason to wait to start collecting

I plan on living well past the break even date and my wife to outlive me by a long time. My pension goes when I die but she’ll get my SS. So I’ll most likely wait to maximize her draw after I

That's my thinking as well. I financially plan as if I'm living until 100 so its an easy decision for me.

 

[NewlyRetired]

I just can't see any reason to wait to start collecting

I plan on living well past the break even date and my wife to outlive me by a long time. My pension goes when I die but she’ll get my SS. So I’ll most likely wait to maximize her draw after I

But couldn't she better off if you took that money now and invested and let it grow? I guess that is the trick and there are no guarantees that your plan of living past the break even date ever happens.

No guarantee of your investing actually making money, either. There *is* a guarantee of a higher payout if you wait, though.

I don’t think there is any guarantee of anything no matter which path you choose. We can’t guarantee growth rate, at least not one of any useful size but we also cannot guarantee what our government will do with the SS program in the years to come.

 

[matttyl]

I just can't see any reason to wait to start collecting

I plan on living well past the break even date and my wife to outlive me by a long time. My pension goes when I die but she’ll get my SS. So I’ll most likely wait to maximize her draw after I

But couldn't she better off if you took that money now and invested and let it grow? I guess that is the trick and there are no guarantees that your plan of living past the break even date ever happens.

No guarantee of your investing actually making money, either. There *is* a guarantee of a higher payout if you wait, though.

I don’t think there is any guarantee of anything no matter which path you choose. We can’t guarantee growth rate, at least not one of any useful size but we also cannot guarantee what our government will do with the SS program in the years to come.

Oh I get that, and I’m in my 40s so I’m not making any of these choices today. I’m saying that if I was 62 and facing the decision now, it would likely be to wait. It would take years for our government to come to any decision about changes to SS, and then likely a years or decades before those changes would be implemented.

Just look at the changes from the social security amendments of 1983 - signed in April of that year after years of work by the Greenspan Commission. The changes gradually increased the full benefits age to 67 by 2027 - 44 years later.

 

[-fish-]

I don't plan on actually retiring. I work about 20 hours a week and that seems fine. I don't factor SS into my financial planning. If I get something from it it will be a windfall.