No. of Recommendations: 0
I just downloaded my annual SS statement. Waiting the 15 months from today to my 70th birthday increases my monthly benefit by 17.7% (plus whatever inflation adds over the next 15 months.)
Also interesting that my annual benefit at age 70 is 86% of my lifetime FICA taxes paid.
Pretty good for someone who hasn’t paid much into the system over the past 30 years. (I quit working at age 38 to live off portfolio withdrawals taxed at a much lower rate.)
Though the sweet spot for a max-FICA wage earner from their mid-to-late 20s would be to retire at age 45 or so, I'm glad I got out several years earlier. {{ LOL }}
https://retireearlyhomepage.com/socialsecurity2023...intercst
No. of Recommendations: 12
Waiting the 15 months from today to my 70th birthday increases my monthly benefit by 17.7%
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Pretty good for someone who hasn’t paid much into the system over the past 30 years. (I quit working at age 38 to live off portfolio withdrawals
I think your outlook is skewed and colored by your personal life experience.
You retired rich, rich, rich very, very early. Probably less than 1/10th of 1% of Americans are in that category.
IIRC, you also had only one mouth to house and feed, no wife & kids. That cuts expenses way down...kids are expensive (I have 2 sons with boys just entering the teens, and those boys each eat much more than I do).
Much of the advice you give reflects this. Have some compassion and strive to realize that your situation is unique.
No. of Recommendations: 7
rayvt writes,
You retired rich, rich, rich very, very early. Probably less than 1/10th of 1% of Americans are in that category.
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You're still not understanding the arithmetic Ray.
I retired in 1994 on a $20,000/yr draw from a $500,000 portfolio (about $40,000/yr from $1 MM in today's money). Sure, few 38-yr-olds had that kind of money, but it was hardly "rich", certainly no where near 1/10 of 1%.
The big benefit I had was that I worked in a high paying industry (oil & gas) and spent most of my career in cities with low housing costs (Houston, TX, Baton Rouge, LA.) I also recognized early that home ownership tends to be a poor investment versus the stock market, and used a rent vs. buy analysis to inform my housing decisions -- a very controversial view at the time. Most Americans are taught from birth that renting just gives you a stack of receipts, and owning a home is the bedrock of family wealth -- not if you're investing the savings from renting an equivalent property and putting it in the stock market. The difference between 4% (or less in some areas) and the 10.7% in the S&P 500, compounded over 2 or 3 decades is a fortune.
It's just arithmetic. Your investment portfolio doesn't know if you're single or married, have kids, a boat, vacation home, or an airplane. It's a matter of matching annual expenses to portfolio withdrawals, and then looking where you can reasonably trim expenses, and improve the investment returns. American business thrives on skim, scam and fraud. There's lots of places you can cut without compromising your lifestyle as long as you're not getting your arithmetic lessons from Fox News.
For example, I was ready to buy a new car back in 2021. Didn't really need one. My 16 year old Nissan worked just fine. But when I started shopping for a new car and the pandemic had dealers charging $5,000 to $10,000 above MSRP, I said, "Screw that. I can wait." Now I'm looking at a 2021 Tesla Model Y that cost $71,000 new, currently priced at $24,990. (It's always preferable to find someone with a limited understanding of the arithmetic to pay the first few years of depreciation on a new car.) Since I'm waiting another 15 months to start Social Security and manage my investment portfolio to limit dividend income (BRK is your friend), I should be able to limit my 2025 income to $75,000 and get a $4,000 tax credit, bringing the price down to $21,000. And what of that $50,000 savings? It's been invested in the stock market and more than doubled since 2021. Now that's arithmetic.
intercst
No. of Recommendations: 1
Several years ago I put $100K into a new (non-public) fund invested in a certain screen. When interviewing him the discussion of our portfolio size and withdrawal needs came up. $100K was just a small portion of our total.
He said "You do not need this fund, why are you putting any money into it?"
My reply was "Just running up the score."
In an article I read years ago, a guy went to his full-service broker guy and wanted to put some money into a small stock he had read about and his broker said to him "Why bother? Even if it doubles or triples it is not going to make any difference in your life style." and thus talked him out of it.
So then the discussion becomes "What are you going to do with the money you don't need?"
Yes, yes, "he who dies with the most toys wins."
You can pass it to your kids, give it to charity, etc.
If you don't have family then I guess you'll make some charity happy, maybe put your name on a table in the campus library.
No. of Recommendations: 5
Congratulations on your SS benefit. DW & I turned 70 this year and, even though we've monitored the growing benefit, we still marvel at how much we'll collect. We have other sources of income (deferred pay, tiny pension, RMDs), but will live a far better retirement life than I could ever have dreamed after growing up in poverty.
