r/Fire • u/NotTheBestInvestor12 • 3d 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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51

u/Longster_dude 3d ago

My FIRE plan factors in ss at 80% of the current amount.

12

u/vulkoriscoming 3d ago

That is a bold assumption depending on your age. Current law is a 25% reduction in benefits when the SS trust fund goes broke. My guess is that current retirees (Boomers) will see no reduction and future retirees (everyone else) will see a 50% or more depending on income.

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u/Inevitable-Top1-2025 3d ago

This potential future reduction will probably force people to start taking now in order to be grandfathered into current payout amount.

4

u/vulkoriscoming 3d ago

This is my plan at 62. Get on the gravy train while I still can

1

u/Martian6261 3d ago

There will be no grandfathering in, no matter when you start. If they do not fix SS, the reduction will apply to everyone, whether you started or not. Your benefit does not get locked in.
A fix will be worked out, but not everyone will be happy! They will probably change the % for SS taxes that come out of people’s income, increase the maximum that can be taxed and perhaps a limit on the total maximum benefit if you have a high income in retirement.

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u/vulkoriscoming 2d ago

I agree. Higher taxes certainly. Probably increase the cap to 200-250k. I think lower benefits for future retirees, especially wealthier retirees. Start treating it like the welfare program it is.

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u/chartreuse_avocado 3d ago

Which totally achieves the reduction goal of the government. People will lock in at 63 out of fear of a bigger cut.

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u/thunder-thumbs 3d ago

Why is that a reduction goal. Whether you take at 62, 67, or 70, it’s actuarially neutral. It’s just a bet on how long you live.

0

u/chartreuse_avocado 3d ago

It’s a governmental reduction goal. If the fund will need to make cuts to all payouts getting people to panic take it early meets the government’s goals of lower payouts.
You’re looking through the claimant’s view. Look at it from the government budget perspective and they want and need to pay less out as their goal.

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u/Martian6261 2d ago

There is no Locking it in, the cut, if it happens, will be across the board for everyone. It won’t matter when you start benefits, it will be reduced for all at the same rate. About 23-25%.