Loading ...Future Social Security Estimates
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Today I got my yearly Social Security statement of my estimated benefits and they are always interesting to read through. For my age (1973) I will get full retirement benefits at the age of 67 and at this point, in today’s dollars I would get $1,710 a month.
Disability would be less and if I took the benefits early (age 62) the amount would be even smaller a month. And I like the fine print that is in the benefits area or the ‘buyer beware’ area.
“Congress has made changes to the law in the past and can do so at any time.” - meaning, don’t count your chickens yet.
“The law governing benefit amounts may change because, by 2041, the payroll taxes collected will be enough to pay only about 75 percent of scheduled benefits.” - meaning, by the time I am 68, I could in effect get the equivalent of at most $1,282 a month instead of the $1,710.
Another good reason to fund a 401k and IRA for yourself as opposed to relying on Uncle Sam to help out with extra money.
Let’s say it is 2041 now (but in today’s dollars) and I am only getting my $1,282 a month because I didn’t save any money in a retirement account for myself. So what can I do with that money:
Food, shelter and clothing:
–I would have to leave the apartment I am currently in and look for a cheaper place or take on another roommate to cover the expenses. The idea of another person living with me isn’t all that appealing, but I would have 68 years of experience and be able to scrutinize people a little better (I would hope) and those who would apply would also be older and a bit set in their ways as well, so it would be easier to find out what they are like. (I would assume) - Check out this living arrangement
– Food would be pretty much what it is now but more conscious of what I eat and how much I go through.
– Clothing would be bought at thrift stores or yard sales. If I am not working, one advantage is not having to buy as much in the way of dress clothes.
Health and Fitness:
– Health would be one area that would probably take more money. Since I wouldn’t be working, I would have the cheaper medical costs that come with it, so I would have to budget for any doctor visits, emergency room visits and medicines. Of course, because of the high cost of medical, I would have to be very good about what I eat, but again, it would be about the same as now.
– Fitness would be of the free variety, plus as a senior I would have the added advantage of any senior group events that may be in my area. Walking and swimming are generally the safer forms of exercise by oneself and walking is free and swimming can be done at a local community center or perhaps I would have enough to purchase a membership to a pool somewhere.
Transportation:
– I would still be able to drive, but I would make sure that I am keeping my vehicle up so that I don’t have to plunk down large amounts to buy a new car. I would be one of those drivers who obeys ALL the rules because I don’t want to get in an accident as well. Mainly, the car would be used only if public transportation or walking wasn’t available where I lived, because using the car often would be added wear and tear along with money out of my pocket for that wear and tear.
Time-Management:
– I would have to do something with my time. If laws hadn’t changed by 2041 I might want to get a part time job to have extra for gifts and build up any savings. There is also the time I would have to give back in time to groups or people that could use my volunteered help.
Who knows what life will toss at me by the time 2041 rolls around, but this is an interesting experiment into the future of possibilities. Essentially it shouldn’t be any different that what I should be doing now. Besides the few noticeable differences in the cost of health-care as I get older and making sure I have money to cover my shelter and food costs, it would just be the same as today, making things last and using as little money as possible.
What would you add?
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When I get those statements annually, it just frustrates me to see how much money I probably will not receive after having been forced to contribute (a la the “buyer beware” disclaimer). Current estimates show that someone of my age will find a Social Security system that is bankrupt upon retirement. Makes those SEPs, IRAs, and 401(k)s all the more important
March 25th, 2008 at 9:36 amif you are in good health and able bodied at the age of 68, take your soc.sec. retirement and continue to work (full or partime, doesnt’ matter). you will not be penalized by soc.sec. this is what my husband is doing…it keeps him occupied, helps keep his mind sharp and his body strong. plus the extra money pays for things like golf, and fishing trips etc..
March 25th, 2008 at 11:37 am@Brett
It is discouraging, I would agree with you about the personal retirement accounts.
@Carlyn
March 25th, 2008 at 12:01 pmI forgot about that.. It is before the ‘approved’ age that you get dinged if you make to much… thanks for the reminder.
My goal is to make sure the mortgage is paid off before we retire. Then even if social security evaporates, we should still be okay.
March 25th, 2008 at 2:28 pmWe retired to Florida about 5 years ago from New England. My husband took early retirement with SS at age 62, one year ago. Prior to that we worked part-time for 5 years.
March 25th, 2008 at 3:14 pmThe biggest decision in retirement, whether you count on SS or not, is where you want to live and what lifestyle you want. We opted out of cold, snowy, icy winters in New England.
Everything we own is paid in full, we live on my husband’s SS, have investments to fall back on, and I will take early SS this Dec. We usually have $100 left over every month. And his SS is less than yours is predicted to be!
We live the lifestyle we want - we do not travel other than day trips, we do not eat out but will buy the fixings for special meals. We are not, nor have we ever been shoppers except at thrift stores, yard sales, at the curb and some dumpster diving. It is our choice not a necessity.
We do participate in the programs our 55+ community offers. We walk every day, we swim almost everyday, we do monthly pot lucks and professional shows, we do weekly coffees. Outside the community we use the library extensively and the local Cultural Center which offers a low cost professional entertainment, offers low cost educational classes, has a Thrift Shop, used book store, reuse craft shop, etc.
Planning for retirement requires much more than financial planning. It requires knowing yourself and your needs - I needed a good all purpose sewing machine, really good quality cookware, my husband needed good quality tools both hand and power. Acquiring these things in the 5 or so years before you retire is essential to your financial well being. You don’t want to be denying yourself of life’s pleasures.
I have 43 years to go, SS seems pretty likely to break down significantly in that time. I was shocked to see that an online retirement calculator actually was including SS, before I remembered that there is a reason those $$ come out of my paycheck.
I’m glad the system was there for my grandmother, though, and since I have family that need that money, I don’t mind paying in to the system. We’ll have more than enough money upon retirement in our 401k, and own a home as well - unless God has other plans.
March 26th, 2008 at 4:58 pmI have huge issues with this as I KNOW I will probably not see a penny of all the money I’ve been putting in. I can only hope that they give us our cash back before they spend it all so I can put it in a 401K or something…
March 30th, 2008 at 3:28 pmI guess I look at the money that I am putting into social security as going to the people who are getting their checks now. I don’t mind helping them out…but I wish someone would fix the system… SIGH!
March 30th, 2008 at 3:43 pm~Dawn
Not everyone can afford the 401(k)even when the companies pay other % of what you put down. We need to discuss more about this. What do people who can’t afford the IRAs or don’t have 401(k) and only rely on SS. Let’s discuss it more about what these people can do, just with SS and what arrangements they need to change to be able to live on their minium SS? Let’s talk and let’s research more!
March 31st, 2008 at 8:04 am