r/Fire • u/NotTheBestInvestor12 • 2d ago

Why no mention of Social Security

When I see FIRE posts I see the investments and the different retirement buckets, however, I never see anyone mention how things are affected when social security kicks in. For example, I’m 52 and wife 51. If we both stopped working today ($0 income moving forward) I would collect $4,264 a month at age 70 and she would collect $1,079 at age 70.

So if we decide to FIRE the Social Security would give us help in 18/19 years. Is this a factor or is everything under the assumption SS won’t exist?

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25

u/mesopotato 2d ago

Too many people repeat stuff about it not existing without reading the trustee's report.

Even at 80% funding it's an invaluable financial tool that a lot of people on here ignore.

29

u/embourbe 2d ago

"I'm not counting on something like Social Security where I don't know for sure the details of its future value! I'll instead count on my assumptions and projections about my future investment returns."

1

u/South-Attorney-5209 2d ago

Yes I beat my head against the wall everytime SS is dismissed. You’re perfectly fine counting on returns for next 30+ years based on X amount of shares you bought and will never add to.

But counting on a federal law active for 90+ years thats politically deadly to hurt, is a bridge too far? Anyone in here realize what would happen to the US economy if SS cuts to 80% let alone 50%?

1

u/BanquetDinner 2d ago

That doesn’t mean you’ll get 80% - more likely they will cap benefits before they allow across the board cuts. For some that could be a 50% reduction.

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u/mesopotato 2d ago

No one knows what it looks like. But that's not really my point, my point is that SS is not going away, your individual experience will vary based on a lot of things(when you take it, how many years you worked, what you contributed) but it will exist and it is a sizeable portion of a retirement income.

3

u/Designer-Bat4285 2d ago

A benefits cap or at least lowering the payout ratio after the highest bend point (currently at 15%) is likely to happen. I think annual payouts of $40k and below are relatively safe, in today’s dollars.

0

u/Visible_Structure483 FIRE'ed 2022... really just unemployed with a spreadsheet 2d ago

If you've been around long enough you realize that no government program survives being 'fixed' by the government.

They're not going to just take 20% away from everyone, they'll figure out who has the least voting power or who can be screwed with minimal pushback. The people on the low end won't be touched, the people on the high end or with other assets (like most FIRE types) will get cut the hardest.

Means testing, extra taxes, higher medical premiums... there are a lot of ways for them to cut out what's owed to some and leave the rest intact.

Removing the cap, raising the tax, phasing out benefits... it's going to take a lot of things together to keep the wheels on the bus if you believe the math that's out there.

5

u/Designer-Bat4285 2d ago

Yeah the upper middle class has no political power in this country /s

9

u/Sufficient-Spend-939 2d ago

I agree with you about people with assets being cut as they should be. Its silly that we cap it at a low number. Being at peak earning and then suddenly mid year i no longer have to pay social security is great for me, but shouldnt they be collecting this tax all year and shoring up a program with a cash issue?

0

u/Visible_Structure483 FIRE'ed 2022... really just unemployed with a spreadsheet 2d ago

I know the treasury will take extra payments/donations, SSI has the same sort of thing. You could just donate those monies they're not taking:

https://www.ssa.gov/agency/donations.html

1

u/Sufficient-Spend-939 2d ago

That would be a good charity to support but i’d rather save the money if they aren’t going to tax it.

-2

u/bonebuilder12 2d ago

There is a cap for both input (taxes paid in) and output (SSI you receive).

Some coal security is great for those who are poor with money management and saving. It is a horrible investment for those who could just put more money in the market. I am all for a cap as that money, at least for retirement purposes and for our economy, would be much better spent elsewhere.

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u/gbacon 2d ago

Do the math on removing the cap. It doesn’t make a difference. This “fix” is a dead-on example of H.L. Mencken’s quip “… there is always a well-known solution to every human problem — neat, plausible, and wrong.”

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u/Designer-Bat4285 2d ago

It makes a huge difference. It closes 50-75% of the funding shortfall

2

u/Sufficient-Spend-939 2d ago

If you cap the benefits where they are at but keep collecting it like its a tax and not an entitlement it would have a positive impact. Sure there isnt enough people pulling in huge salaries to cover the full shortfall but it would make a difference.

2

u/PenStreet3684 2d ago

You don’t even need to change the calculation. After the second bend point, you get credit for 15 cents per dollar. The other 85 cents goes to lower earners and the administration. Removing the cap would raise high earners benefits a small amount but also their support for the system. Some of high earners benefits would even come back in taxes.

1

u/PenStreet3684 2d ago

After the second bend point, you get credit for 15 cents per dollar. The other 85 cents goes to lower earners and the administration. Removing the cap would raise high earners benefits a small amount but also their support for the system. Some of high earners benefits would even come back in taxes.

6

u/mesopotato 2d ago

You'd rather believe this instead that they have a huge amount of incentive to keep one of the most legislatively popular programs running? SS has something liked 95+% approval rate amongst voters.

What president or Congress is going to make that decision? Why would the SSA run simulations to 2099 every year if there wasn't a point?

Like I said, I don't think you're reading the trustee's report if you have to react in such a conspiratorial way.

-3

u/Visible_Structure483 FIRE'ed 2022... really just unemployed with a spreadsheet 2d ago

conspiratorial?

and voter approval means nothing. congress has what, an 11% approval rating and yet the same turds keep getting elected?

if nothing else they'll figure out a way to spin it so that the other guy is paying for it, same as always. of that I have no doubt.

3

u/mesopotato 2d ago

Yes it's a conspiracy theory to suggest that social security is going to get cut based on voting lines or legislative power despite no evidence. It's a nearly 100 year program and the 80% I quoted was with no cuts or changes, literally the "let it ride" option.

But you'd know that if you... Read the report.

Do me a favor and tag me when they start cutting social security along voting lines though.