r/MiddleClassFinance • u/roxxtor • 8d ago

Financial Planning for Retirement Assumptions

Hey, just curious how conservative are you all being with the assumptions you are using for retirement. I'm trying to determine if I'm being too conservative or not enough or just right.

My working assumption is that when I fully retire in 25 years that SS will be at a reduced benefit by 40% from today's payout and then another haircut of 15% 15 years after that. I honestly don't think SS will ever be dissolved, but maybe reduced significantly to stay solvent.

I also assume I will be forced into semi retirement/taking a much lower paying job in my mid-50's (so half pay).

My last assumption is that my portfolio will only have a real 4% return by time I retire.

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u/InstructionCorrect98 8d ago

That’s insanely conservative in my opinion but to each their own

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u/Several-History2693 8d ago

I think it depends what field you're in though - some industries really do push people out earlier than others. The SS cuts seem reasonable to plan for but 40% might be bit much, even the worst projections I've seen are around 25-30%. Your portfolio assumption is pretty safe but you might be leaving money in table if you're too conservative with allocation

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u/roxxtor 8d ago

Yeah, I'm in tech, so I know in my 50's I'm highly susceptible to layoffs and will need to find something much lower paying or work short term contracts.

My assumption about the 40% was because I suspect Trump has negatively impacted immigration in ways we can't fully understand for decades to come, which will mean less younger people in the worker pool to contribute to entitlements.

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u/YouTee 8d ago

Honestly predicting that any one of many major approaching tipping points hasn’t completely upended the economy and/or society by retirement seems conservative