I have been pretty consistent in believing that one way or another entitlements will not be there when my time comes. It's just an opinion and of course I could be incorrect but it makes more sense to plan on no social security and then have it be there instead of the other way around.
If we take my benefit when I am 70 and my wife's benefit when she is 68 (she is six years younger) then our combined benefit would be $4704 per month in today's dollars. Well that is way more than what we spend on the basics (utilities, various insurances, groceries and gas). We have no car payment now but that could change in 2015 when our 4-Runner turns 15. Even with the Hilo house factored in $4704 is a little more than what we have to spend to cover everything that is non-discretionary. Obviously on top of this would be things that cannot be planned for like car repairs, vet bills and the like. After that would be spending on things we want to do.Needless to say this is quite encouraging if social security actually exists when I turn 70. A big problem is people who live beyond their means but there are plenty of people who do live within or below their means and there is time for other people to learn how to live within or below their means.
All of this coincides with a conversation I had with a friend who got a good scare at some sort of retirement planning seminar put on at work. I didn't get a lot of detail but apparently the numbers were daunting but of course whoever the speaker was probably had something to sell and had a vested interest in creating an air of daunt, so to speak.
What I know of my friend's situation is that they are in pretty good shape and they already have a hobby that they have successfully figured out to monetize so the idea of generating some sort of income after "retiring" does not come as a shock.
A concern about working, reasonably speaking, is being forced to take a job you don't want to take because you simply need the money. How old are you? When do you plan to retire? What are your interests? What sorts of things are available where you live or want to live? That is what you have to work with if you feel your portfolio and social security won't get it done.
With a little bit of innovative thinking and some decent planning the idea of finding some sort of enjoyable work a few hours a week that takes some of the burden off your portfolio and maybe contributes to your health insurance needs should not be daunting. If you are self-employed in this context you probably are working more than a few hours a week, hopefully because you want to, making a little more money but on your own for (gap) health insurance. A couple today needing $5000 per month collecting $3000 from social security and making $1000 with some sort of part time work does not need to have millions accumulated to make it work.
This part of the solution is only limited by our own ability to think. The possibilities are limitless.
16 comments:
What scares me, Roger, is so many folks don't think about retirement until the kids are through college or they want to retire in the next 6 months.
Hopefully, this downturn will get folks to take it seriously, but if the market continues upward I am sure we will wait until the next crisis to worry again.
As a person successfully doing pretty much what you are suggesting, I caution you about overly romanticizing it. Working 'a few hours a week' at a job you 'enjoy' is not necessarily how it plays out.
Yes, your points are valid. However, walking the walk is tougher than talking the talk.
Beyond that, Social Security will be there. In some form. Save the scare stories for Halloween. If Social Security isn't there, well, we'll all mapquest your abode and move in with you.
BillM
Roger, I wonder if you might comment on the timely Yahoo article, "How to Make Your Money Last." The write shares three related strategies for supplementing SS payments.
Thanks very much.
Kirk one thing I think is more immediate is people spending themselves into oblivion, a form of denial. Bigger picture there seems to be a lot of denial around all of this.
BillM, don't harsh my mello, man. Examples from people I know; driving the backhoe, another neighbor who plows out the mountain in the winter, one guy up here with a 2200 gallon water truck who contracts out on big fires all over the region, that guy's brother in law to go with to the fires, another guy who does the same contract work with a 3500 gallon water truck, one guy is a gun-smith, we went to a concert the other night and most of the ushers, ticket takers and security people were of retirement age, we have some minor league sports here that offer part time or season work, we have national parks near by which also offer part time or seasonal work. endless possibilities that require thought and a lot of planning.
I will check out that yahoo article.
Dude, I'm sorry about your mello. You live in the mountains, I live in the city. And I stand by my observation that it won't be as easy as it sounds, as the large masses of Boomers move into their 60s and beyond.
But yep, you are correct. It takes some thought, planning and flexibility.
Meanwhile, I won't even ask what those retirement-age security people you mentioned are capable of protecting us from
At least Boomer-era security people will be experts at sniffing out pot smokers at Oldies concerts.
BillM
lol, i would never underestimate a fit looking 60 year old.
Bill and Roger's exchange has brought me out of the woodwork!
Both my sisters (>60, but not pulling in SS, yet) have pursued the "supplemental income (for survival)" route, and anecdotal though it may be, their experience veers towards Bill's perspective. Both had their own businesses that have failed in this economy. One is the former owner of a travel agency (non-existent margins - even the cruise ships are offering cut-rate "call us direct" deals), while the other was marketing radio ads for local businesses, primarily the car dealers (oops!).
Both are now working part-time (no benefits) at discount retail stores for $8/hr.
The problem, I think, with Rog's imagined scenario is that it's a buyer's market (in the part-time employment arena), and there is a huge surplus of folks desperate for even the $8/hr job.
After taxes (which are likely not going down anytime soon), that $8/hr looks mighty skinny and places actual "retirement" further and further into the future (with or without SS).
This will only depress consumption further, which can't be good for our consumer dependent economy...
Two other points: Rog, you live in an area sought out by people of retirement age. The preponderance of "seniors" taking tickets is likely well correlated with the population skew.
Finally, try running that yahoo finance calculator with lifetime earnings pegged to "median" US income, rather than you're own stats.
There's the horror story.
R in NY
The variable for me is figuring out what my expenses will be. Will I be paying $700/month for cable due to inflation?
For my wife and I, social security was/is a ripoff.
For years, we both were taxed on social security working jobs before and during our public school employment.
Now, we collect from a defined benefit plan through our teacher's pension fund, but DO NOT QUALIFY to receive one penny of ss benefits due to 1986 legislation preventing a "windfall" of benefits. In other words, our retirement defined beneit is too large and thus we do not qualify to receive any monthly checks from social security.
Talk about "dead money".......
holy crap 9:03, that is a new one on me.
The law apparently applies to those who had salary that SS tax didn't apply to.
just read the Yahoo article. Short answer is that I am just not a fan of annuities.
Thank you. Me either, but I keeping reading...
Roger,
I, too, have a state of CA public pension and will receive a reduced SSI benefit because of my state pension. Hardly seems fair as I also worked for 20 years in the private sector. This is referred to as a "social security offset". The next shoe to drop will be when our "Socialist in Cheif" establishes a "needs test" to receive SSI. Those of us who have diligently saved and invested will be screwed again. Maybe I can move in w/ Jeff in Milan!!!
Max
Valencia, CA
this is probably something i shoudl have stumbled across by now but have not. instead of moving to Italy maybe declaring your property here to be a separate country is the answer. I've seen stuff about this but don't know about it.
A needs test for SS is not a bad idea. My brother-in-law gets SS but also has over $100k/ year in income. I don't think that is right.
Post a Comment