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Still Believe You Can Live Off Your Social Security? You Can't!

rhinefire

rhinefire

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I am single and I retired this past October 8th knowing my money would last and I will be comfortable. Out of curiosity I started logging all spending for each month and in November and December my spending nearly matched by SS check which is $1,981 after all medical insurance bills are taken out. That means if I lived on that check and had some home and or auto repairs I could not pay for them. Now home taxes are due next month to a total of about $2,000 and for this month my spending as of the 12th is $2,342 so that again is proof there is no such thing as "living" on social security. I was a contractor so I have no pension so I saved and invested but I know too many people rom 35 on up that had no concept of life 30 years from now and a few near my age 67, that have saved nothing. So if you are thinking you will get by I am saying you may be in for a big shock and at 60+ years of age you will not be able to find a good paying job or any job once you figure out you cannot make ends meet. After so many criticized me for working long hours and five years past age 62 when you can retire and I am very happy my plans have put me in a comfortable position so my advise is simply plan, plan and plan and you will be rewarded.
 
I talk to my clients about this kind of thing every year and every year I have someone else come in for a consultation where all I can do is give them a list of generally undesirable options for retirement.

Social Security was designed to be a supplement to other retirement planning. It was never intended to be THE plan but in today's entitled society that is very often the way it's perceived.



Some things for folks approaching Social Security age to keep in mind:

1. There are a number of scenarios that can cause your social security income to increase your tax hit. Don't just assume that it's "free" money.
2. Taking Social Security early may not be your best option. If you take your SS at 62 you receive a 25% reduced benefit from what you would get at FRA. Your total benefit will start falling behind your aggregate FRA benefit when you hit 78. If you delay SS until you hit 70 you get a 32% increase to your benefit and by age 82 you will have received more aggregate benefit than if you took an early or normal benefit.
3. This one is important. If you gamble your gambling winnings can effect how much of your social security is taxable AND if you don't itemize odds are you won't be able to use the losses to offset the win.
 
Lift the cap on SS payments over $100k. That will make SS solvent for 60 plus years.
 
rhinefire said:
I am single and I retired this past October 8th knowing my money would last and I will be comfortable. Out of curiosity I started logging all spending for each month and in November and December my spending nearly matched by SS check which is $1,981 after all medical insurance bills are taken out. That means if I lived on that check and had some home and or auto repairs I could not pay for them. Now home taxes are due next month to a total of about $2,000 and for this month my spending as of the 12th is $2,342 so that again is proof there is no such thing as "living" on social security. I was a contractor so I have no pension so I saved and invested but I know too many people rom 35 on up that had no concept of life 30 years from now and a few near my age 67, that have saved nothing. So if you are thinking you will get by I am saying you may be in for a big shock and at 60+ years of age you will not be able to find a good paying job or any job once you figure out you cannot make ends meet. After so many criticized me for working long hours and five years past age 62 when you can retire and I am very happy my plans have put me in a comfortable position so my advise is simply plan, plan and plan and you will be rewarded.
Click to expand...

Good for you that you were able to save and invest, because not everyone is able to do that - especially in today's market where so few want to pay more than minimum wage.

That said, how well would you be doing without that SS check? I figure you'd still be doing okay...but you gotta admit that that extra $1981 is really, truly nice to have.
 
I think it depends on where you are. As an expat I know a lot of American retirees that live in the third world and live pretty well purely on their SS checks.
 
Shadowless said:
Lift the cap on SS payments over $100k. That will make SS solvent for 60 plus years.
Click to expand...

What does that have to do with the topic of this thread?

So we make SS solvent for 60 plus years.

Okay, then people will receive SS benefits which are insufficient to live on as a sole source of retirement income for 60 plus years.

The bottom line is that you still need to take responsibility for your own financial security in retirement or you can expect to be living in a cardboard box eating dog food.
 
rhinefire said:
I am single and I retired this past October 8th knowing my money would last and I will be comfortable. Out of curiosity I started logging all spending for each month and in November and December my spending nearly matched by SS check which is $1,981 after all medical insurance bills are taken out. That means if I lived on that check and had some home and or auto repairs I could not pay for them. Now home taxes are due next month to a total of about $2,000 and for this month my spending as of the 12th is $2,342 so that again is proof there is no such thing as "living" on social security. I was a contractor so I have no pension so I saved and invested but I know too many people rom 35 on up that had no concept of life 30 years from now and a few near my age 67, that have saved nothing. So if you are thinking you will get by I am saying you may be in for a big shock and at 60+ years of age you will not be able to find a good paying job or any job once you figure out you cannot make ends meet. After so many criticized me for working long hours and five years past age 62 when you can retire and I am very happy my plans have put me in a comfortable position so my advise is simply plan, plan and plan and you will be rewarded.
Click to expand...
Yes planning ahead is always best. I will be retiring in a few years and will being doing just fine. A few things to add that can make ones retirement far easier:
pay off your Home
Buy a new car and pay it off before you retire,
Pay off your credit card debt
Keep in mind that if you go on Medicare you will need a supplemental policy, shop around for a good one and the cost will be easily affordable.
Homestead you home, your property taxes will drop through the floor.
Find ways to economize without any real effort and start practicing them, it will become second nature before it even needs to be.
Find a hobby that can actually reap some extra cash, start looking and doing so before you retire and it will give you some extra cash if you need it and not require dipping into savings. Plus it will keep you active and that helps health and mentally wise.
Hopefully some will find those helpful also.
 
soot said:
What does that have to do with the topic of this thread?

So we make SS solvent for 60 plus years.

Okay, then people will receive SS benefits which are insufficient to live on as a sole source of retirement income for 60 plus years.

The bottom line is that you still need to take responsibility for your own financial security in retirement or you can expect to be living in a cardboard box eating dog food.
Click to expand...

Ummm, no. We need to increase SS payments, not keep them dismal. Understand?
 
rhinefire said:
I am single and I retired this past October 8th knowing my money would last and I will be comfortable. Out of curiosity I started logging all spending for each month and in November and December my spending nearly matched by SS check which is $1,981 after all medical insurance bills are taken out. That means if I lived on that check and had some home and or auto repairs I could not pay for them. Now home taxes are due next month to a total of about $2,000 and for this month my spending as of the 12th is $2,342 so that again is proof there is no such thing as "living" on social security. I was a contractor so I have no pension so I saved and invested but I know too many people rom 35 on up that had no concept of life 30 years from now and a few near my age 67, that have saved nothing. So if you are thinking you will get by I am saying you may be in for a big shock and at 60+ years of age you will not be able to find a good paying job or any job once you figure out you cannot make ends meet. After so many criticized me for working long hours and five years past age 62 when you can retire and I am very happy my plans have put me in a comfortable position so my advise is simply plan, plan and plan and you will be rewarded.
Click to expand...
I think the circumstances of your complaint are: You'd like to retire at your same standard of living as pre-retirement, including owning your own home and vehicles.

I see SS as a very basic safety net; on its own it's something to keep one from complete destitution, but that's about it. It needs to be augmented, if one desires to maintain quality of life.

I've seen a few elderly live solely & exclusively on a SS check on their own, but they were in a divey apartment in a sketchy neighborhood, and they lived as frugally as could be, including using public transportation; they survived independently though! It can be done. Sometimes you'll see two SS recipients living in such fashion, splitting housing expenses - I've seen two elderly sisters do this. Others live with family, which isn't so bad and has other positives IMO.

But if you want to retire independently with your house, car(s), and other non-necessary expenses (cable, entertainment, hobbies, travel, etc), you're going to need a sound retirement plan. SS will keep you fed and alive, but that's about it - at least where I live (large northern city).

And thank you for sharing your personal circumstance and stimulating this discussion.
 
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Shadowless said:
Ummm, no. We need to increase SS payments, not keep them dismal. Understand?
Click to expand...

I understand that you're talking about two different things.

Keeping SS solvent means ensuring that the SSTF doesn't run out of money.

Increasing the SSI benefit is something else altogether.

The meager increase of $65 per month in the SSI benefit proposed by Bernie Sanders in the press release you provide in post #12 isn't going to close the gap between income and cost of living to any appreciable degree.

Furthermore, that $65 only represents a 4.5% increase over the current $1431 average monthly benefit.

With inflation including food and energy hovering somewhere around 3% to 4% per year that $65 increase will be eaten up by inflation in about a year and half and ultimately get us nowhere long-term.

Which kind of gets us back to where we started: The bottom line is that you still need to take responsibility for your own financial security in retirement or you can expect to be living in a cardboard box eating dog food.
 
soot said:
I understand that you're talking about two different things.

Keeping SS solvent means ensuring that the SSTF doesn't run out of money.

Increasing the SSI benefit is something else altogether.

The meager increase of $65 per month in the SSI benefit proposed by Bernie Sanders in the press release you provide in post #12 isn't going to close the gap between income and cost of living to any appreciable degree.

Furthermore, that $65 only represents a 4.5% increase over the current $1431 average monthly benefit.

With inflation including food and energy hovering somewhere around 3% to 4% per year that $65 increase will be eaten up by inflation in about a year and half and ultimately get us nowhere long-term.

Which kind of gets us back to where we started: The bottom line is that you still need to take responsibility for your own financial security in retirement or you can expect to be living in a cardboard box eating dog food.
Click to expand...

Aha! You just hit the nail on the head without realizing it! We need to close the gap between the cost of living and the meager income most of us are taking home each year. Has Trump called for an increase in that? He says just the opposite in fact. We need to base ALL federal and state benefits/payments to the cost of living, right now it;s adjusted to the price of food, which has dropped drastically since this measure was implemented around WWII.
 
Shadowless said:
Aha! You just hit the nail on the head without realizing it! We need to close the gap between the cost of living and the meager income most of us are taking home each year. Has Trump called for an increase in that? He says just the opposite in fact. We need to base ALL federal and state benefits/payments to the cost of living, right now it;s adjusted to the price of food, which has dropped drastically since this measure was implemented around WWII.
Click to expand...

What Trump has said or done not withstanding, the BEST (meaning most generous) plan proposed by anyone other than Trump still fails miserably.

Sanders is talking about removing the tax cap on earnings AND extending the tax to unearned income and STILL the best that gets us is a $65 a month increase across the board.

Without, as you say, RADICALLY overhauling the way in which all state and federal benefits and entitlements are calculated and without RADICALLY overhauling the way in which all state and federal benefits and entitlements are funded (something that clearly is NOT going to happen):

The bottom line is that you still need to take responsibility for your own financial security in retirement or you can expect to be living in a cardboard box eating dog food.

(You notice the theme here, right?)
 
soot said:
What Trump has said or done not withstanding, the BEST (meaning most generous) plan proposed by anyone other than Trump still fails miserably.

Sanders is talking about removing the tax cap on earnings AND extending the tax to unearned income and STILL the best that gets us is a $65 a month increase across the board.

Without, as you say, RADICALLY overhauling the way in which all state and federal benefits and entitlements are calculated and without RADICALLY overhauling the way in which all state and federal benefits and entitlements are funded (something that clearly is NOT going to happen):

The bottom line is that you still need to take responsibility for your own financial security in retirement or you can expect to be living in a cardboard box eating dog food.

(You notice the theme here, right?)
Click to expand...

First of all, yes it will happen. If it doesn't happen, there will be riots in the streets and an actual revolution to overthrow the oligarchs in power now. Bernie Sanders, like FDR, would address this with more policy proposals. The $65 increase is better than any of the other candidates plan, but we should always advocate for what needs to be done, re-calculating the cost of living structures, etc.

Don't just say it will never happen. Demand it.
 
soot said:
The bottom line is that you still need to take responsibility for your own financial security in retirement or you can expect to be living in a cardboard box eating dog food.
Click to expand...

And with a little bit of bad luck, you can STILL be living in a cardboard box eating dog food, no matter how responsible you've been.
 
Shadowless said:
Aha! You just hit the nail on the head without realizing it! We need to close the gap between the cost of living and the meager income most of us are taking home each year. Has Trump called for an increase in that? He says just the opposite in fact. We need to base ALL federal and state benefits/payments to the cost of living, right now it;s adjusted to the price of food, which has dropped drastically since this measure was implemented around WWII.
Click to expand...

The way you close that income gap is by making yourself a more valuable employee who warrants a bigger paycheck. It's up to YOU to close that gap, not the government.
 
Lutherf said:
The way you close that income gap is by making yourself a more valuable employee who warrants a bigger paycheck. It's up to YOU to close that gap, not the government.
Click to expand...

It's not up to the government, correct. You do know that the undemocratic way we structure work in this country prevents people from excelling based on their own merits, right? The ability to move up with hard work used to be true, but now those safeguards have been destroyed.
 
rhinefire said:
I am single and I retired this past October 8th knowing my money would last and I will be comfortable. Out of curiosity I started logging all spending for each month and in November and December my spending nearly matched by SS check which is $1,981 after all medical insurance bills are taken out. That means if I lived on that check and had some home and or auto repairs I could not pay for them. Now home taxes are due next month to a total of about $2,000 and for this month my spending as of the 12th is $2,342 so that again is proof there is no such thing as "living" on social security. I was a contractor so I have no pension so I saved and invested but I know too many people rom 35 on up that had no concept of life 30 years from now and a few near my age 67, that have saved nothing. So if you are thinking you will get by I am saying you may be in for a big shock and at 60+ years of age you will not be able to find a good paying job or any job once you figure out you cannot make ends meet. After so many criticized me for working long hours and five years past age 62 when you can retire and I am very happy my plans have put me in a comfortable position so my advise is simply plan, plan and plan and you will be rewarded.
Click to expand...

Sigh... In the old times, thats what kids were for.

Ill support my parents and theyll live with me free of charge worst case scenario.
 
Shadowless said:
First of all, yes it will happen. If it doesn't happen, there will be riots in the streets and an actual revolution to overthrow the oligarchs in power now.
Click to expand...

I don't see that as a realistic possibility at any point in time in the foreseeable future.
 
Shadowless said:
It's not up to the government, correct. You do know that the undemocratic way we structure work in this country prevents people from excelling based on their own merits, right? The ability to move up with hard work used to be true, but now those safeguards have been destroyed.
Click to expand...

I didn't say "hard work". I said "make yourself more valuable". If you are the hardest working burger flipper in the city you're still just producing burgers and will only be able to command a wage based on that. If, however, you can figure out a way to get more burgers to more paying customers you become more valuable and thus make more money.
 
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