Perhaps other savings within Federal spending can establish stronger fiduciary plan for SS.
Seniors are a big voting block.
I’d like to think it will be “saved” but who knows.
Clearly, our spending doesn’t match the need. That’s what happens when you reduce taxes. I’m not saying reducing taxes is bad but less revenue does have consequences.
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It’s highly unlikely they wil cut Social Security benefits because it’s too much of a political landmine. The more likely scenario is they raise the wage base (for example $500k) instead of the current $184k adjusted for inflation. They could also just raise the FRA to 68, 69 or 70 for younger workers.
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As I have written before, we haven’t counted on SS for retirement, but that doesn’t mean it sure wouldn’t be nice! We are counting on Medicare.
My SS will be pretty paltry, but dh’s will not. I’m five years from full retirement age and dh is four. We plan for me to start taking at 67 (my full retirement age) but dh to defer until 70. I guess I sometimes wonder if they will up the ages in the next four to eight years and how that might impact us.
We are not wealthy, but we should be able to feel confident with what we have going into retirement. Yet, I don’t. I read an opinion article about this yesterday. It was about being upper middle class-ish but not feeling that way because of worrying about inflation, SS, and medical costs. It also added wanting to help adult kids by helping with a down payment on a home because housing prices have increased so much. That was not anything I had factored in/previously considered doing, but I’m now wondering if we should.
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If you are not counting on SS for retirement, you are ahead of many Americans. [SSA tidbit found via Google: According to 2022 data, over 16 million people (approximately 27% of beneficiaries) relied on Social Security as their sole source of income. ] But you are right that there are very many worries and uncertainties going forward. If you can indeed defer the larger SS til age 70, that is going to be a big help to mitigate the risks.
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At some point, we probably will ‘help’ with home acquisition for 2 DDs, but they are not there yet, and neither are we. Both have good living arrangements with rent houses and still have some of their own life transitions.
We have to fully take care of ourselves first. If something happens to me, DDs are beneficiaries of my life insurance policies - which will be super helpful for a bolster of non-taxable cash for them. At some point, they will be primary beneficiaries of DH’s life insurance policies.
We probably will have a big home move ahead for us once SIL transitions into FT career in their area after he leaves FT Army mid-April (he will continue with Army Reserves). There is work in his area with his capabilities, but it may be a little transition time as it may be civil service work first (there is contractor work that is stable/desirable but he needs a little more work experience in his field for the openings that are current) and it takes time for a government hire. Once we know he is in a career that is stable/good - and if they desire for us to move to their city (which almost is a given - they have 5 children under age 7 and our DD1 works FT in an excellent and stable career job), it is selling our home and purchasing one there. DD1 said once they had their first child (2018) that she wants her children to grow up similar to what her sister and she had growing up, and I can help facilitate some of that - and have been a help to them on extended stays.
SIL’s parents will be moving into AL near his brother’s place which is 6 hours away from SIL/DD1 (they now live in a distant state) - that shoe has to drop too; it may be a year (or two) before they actually finally move.
We are building up some more liquid assets to make sure our eventual move goes well - and we can time things so that we can have our home hit our market at the best time for good sales. We want to sell our house first, so we don’t have so much tied up in real estate (and don’t feel financial pressure to perhaps take a ‘low ball’ offer to sell the one house quickly) - store things in our local area. We can take our time with making a purchase in DD1/SIL’s city.
Some good friends now have an additional medical situation that has forced them to live away from their ‘dream house/property’ most of the week. The husband needs dialysis 3X a week - so they are now renting a furnished apartment and staying most of the week in our city. He survived cancer in the pancreas duct area and now gets scanned every 3 months - maybe longer periods now. He was already dealing with kidney issues for a long time – a genetic problem - he was on experimental medication and was improving; his older brother was further along in disease - several years ago our friend’s wife gave her BIL one of her kidneys, and he did OK for a while before he died. Friend is doing well now with the dialysis and now they are adjusting to this ‘new life’. One hangs onto life with the cards they are dealt, make the life adjustments.
If they had a ‘crystal ball’ - they would not have sold their home and built their dream home. They owned the property first for hunting and other recreation. When they sold their city home, they moved into an apartment for several years while he was working FT in a great job, and they were having their home built. They were planning for him to continue work and live at their country home on weekends (which they did for a while). His quite unexpected cancer caused him to end his contractor government work (he was already retired military), and they fully moved into their country home. Her 100 YO mother had been living with them for about 10 years - and she was also in their apartment after they sold their home and she died before his cancer diagnosis - she was pretty functional, and she was in the rehab facility I worked at for ‘respite’ - so her DD/SIL could travel when one of her local kids could not take grandma in.
It helps to keep whatever flexibility one has and consider all options with making transitions. Easier in many ways to move from a rental property.
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Yes, isn’t this the problem for all of us???
I’m a bit tongue in cheek when I say we aren’t counting on SS in retirement. I don’t really expect it to vanish overnight. We won’t necessarily have to eat rice and beans if we never see it, but it’s not an insignificant amount either. Would make a substantial difference in monthly cash flow and the need to draw down assets.
My dh is still working at 63 and plans to do so for at least two more years. He’s tried to retire twice but he keeps being, “found,” and hired. The good news is that both of his second career jobs have been less stressful than his long-term one was.
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We too feel like we can survive without our social security, but it sure would be nice to have it.
We have a fair amount of money saved, and we have (not huge) pensions, but still worry about what may or may not happen in the future.
As I’ve said here before, I’d like to help kids more, but I feel like the best gift we can give them is to not need to help us.
I did an interest free loan to help with a home purchase, but didn’t give a lot of $$s.
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IF one has a serious health issue already, one has to project how aging might affect them - especially distance from major medical care. Somehow now, the realization that the vision on being in a quiet country property is not working out. The wife is thankful for the time with her spouse; one of her sister’s husbands went down on one of the 9-11 planes.
The wife also cannot bike the county roads because of the hills and the big risk of getting hit by a neighbor that is used to tearing through the road w/o seeing a biker at the other side of a hill. She bikes the city trails now that she is so familiar with, so that is a something she can now do while her husband is spending four hours on dialysis 3X a week. Her family got her a Peloton, but she does find the outdoor biking much superior.
W/O SS, we would be spending down our retirement assets. Over the last 4 years, our retirement funds have pretty much stayed intact. Market gains are part of keeping our spending.
Noting the bit of downturn between end of Jan and end of Feb with stock investments. Not unexpected with world events and how it affects the markets.
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When we moved to San Diego, we assumed we would have to dip into retirement assets and we also took a small mortgage to afford the house we wanted.
Then nine days after we moved, my mom passed away. I inherited my half of my dad’s trust (Mom had been getting the income) plus my share of her trust and eventually condo sale. Plus my share of her IRA (before the ten year time limit was imposed).
So the retirement assets were left intact until the required RMD last year. But at a sad cost.
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You had a tough time - intense. That is how they go for many of us.
We were in a little bit of tight finances in 2009 - just before I had aggressive cancer a few months later (our DDs were in 8th and 10th grade at the time). Moving forward, I maxed out on insurance copays and deductibles for 5 years. The financial decision we made were in line with the position we had. Then one of the trust properties was sold and some money came. In 2010, I had a miraculous turnaround on the cancer (no cancer at primary tumor site - very unexpected but an answer to prayer, especially my aunt’s 3rd and last pilgrimage to pray for me at Lourdes). Things got very dark, and then into upward. I was able to do a ‘sunset career’ for almost 5 years before retiring at age 65. DH was able to retire shortly before his parents needed a lot of attention prior to dying at age 92 (both passing within 3 months).
We don’t have control of a lot of things. Glad you have been able to move to your chosen city and retirement house.
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So, the stock market is going down again. What’s going up is:
Job losses, gas prices, cost of major expenses like housing, real estate taxes, insurance and childcare, record levels of debt.
My husband wants to put about 1/3rd of his 401K into money market funds today, looking at what might be happening in the future. I am reluctant to do that, as though I know we have high exposure to equities, I wonder if these are temporary issues or if these are systemic, ongoing issues that I’m going to regret not taking action on because it’s so obvious. Or is it? My timing usually sucks, so trying to daytrade is useless. What do you people think? Temporary or long term pain?
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So far today, the S&P 500 is down ~1%. So far this week, the S&P 500 is down slightly less than 1%. So far this year, the S&P 500 is down slightly more than 1%. Over the past 1 year period, the S&P 500 is up ~20% (including dividends). This doesn’t seem like a cause for alarm to me or a reason to make dramatic changes to investments, such as putting 1/3 of 401k in to a money market.
Future expectations are priced in to the current market, which makes trying to time the market challenging for typical investors. The vast majority who try to time the market end up with lower long term returns because of it. As I recall Vanguard did a study reviewing 401k returns, and found that this type of buying/selling at the wrong time was one of the largest contributions to subpar average returns. Rather than change investments based on what you think will go up/down in the future, I’d suggest choosing an equity % that fits with your risk tolerance, time horizon, and financial situation.
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So it all depends on timeframe, right.
Oil is up due to war. Will we get the traffic flow up and it comes down or will it stay elevated without Iranian supply?
If you need your nest egg next year, hubby may be right. If you need in ten years, no one can say, but history would show he’s not right.
Of course, as you get older, you likely should get more conservative anyway, unless you have things like pensions and all.
So the answer isn’t one size fits all - but what is best for you. Overall, the market is barely down from the peak, looking at indexes and some stocks, like oils and utilities, are up.
But if/when war ends and oil prices come down, you might see the market bounce back.
A lot also depends on the industry you own in - some are more capital intensive than others - and software, as an example, was getting crushed long b4 war, based on AI expenses, etc.
If anyone knew what will happen, we’d be billionaires. But no one knows.
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Though I know that’s always the best advice, we tend to have an issue with it. Our 401K’s are not necessary for living expenses, because of our pensions, but they are used for living well and buying things we don’t actually need. And of course, the hope that we can pass a nice chunk to our kids. Since it’s pretty much a gambling fund, we keep it mostly in equities. Sounds like my husband doesn’t have the same risk tolerance as I do.
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True, no one knows. Think I’ll call it “rebalancing” for him, if that’s what he needs, instead of panic market timing. I tend to do better by leaving things alone, though it can be hard to see in the short term.
My two cents …
It’s only a loss if he sells right now. If 1% is enough of a drop to cause panic in him, then it sounds like y’all are overcommitted in equities for his taste. Have him take a risk analysis and see what’s a better allocation for him. Do y’all work with a FA?
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I think that a lot of us have wondered about this for a long time. To me, three things stand out.
One issue is that there is a lot of uncertainty. For someone who is in their twenties or thirties (eg, my children) there is time. Either western civilization will collapse or the stock market will eventually recover (or both). They can be invested aggressively. For someone who is in their seventies (my spouse and I) we should have a balanced portfolio. There should be enough in bonds or money markets or annuities that we know where our spending money is coming from for the next five or ten years.
Another issue is that there is a lot of incentive for politicians to pursue policies that result in inflation. Government spending still tends to be popular. Taxes are not. Deficits seem to be inevitable given the current political landscape regardless of which party happens to be in power. Retired people need to be aware that inflation is likely, and could accelerate. There are multiple forces that can push inflation. The common “print more money and give it to people” cause of inflation seems to push up stock prices just as much as it pushes up any other prices. Thus some stocks in the mix seems like a good idea as a hedge against inflation. Again this points to a balanced portfolio.
The third thing that comes to mind is that however much I study economics and politics and stock movements, I am not a professional. The professionals will understand this stuff better than I do. I do not think that I can accurately predict movements in stocks and bonds and gold and other prices. I just leave the balanced portfolio as a balanced portfolio, and let the professionals do their jobs. Small short term price fluctuations are not something that keeps me up at night.
1% up. 1% down. I don’t care. 5% up. 5% down. I still don’t care. I can’t afford to worry about this, and can’t do anything about it, and can’t predict it.
If you are retired, have a balanced portfolio and a cautious budget.
This probably means that you are not a professional either.
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Eh, we’ve worked with FA’s over the years and they have their formulas (that we don’t care for). Nobody seems to get that this is pretty much play money, though obviously, we don’t want to lose it.