Oh, I hear you on that. We are also like save/defer. That the reason we do have plentiful retirement funds, even though pensions not as good as we had hoped.
After I researched, it did take me (and FA) a while to get hubby on board to me taking SS at 62ish. But he is 7 years older, was already deferring to age 70 himself. He started taking his max SS about 6 months after my reduced SS. But this way whoever lives longer is assured of having the bigger/deferred SS amount. In the meantime, we have easier cash flow in our Go Go years.
My parents born in 1931 and 1933 both started taking SS at age 62. My dad had sold his business just prior to age 60 due to market conditions, while having excellent cash flow from paid for apartment buildings and his share in a corner bar/restaurant. His business had mom with minimal earnings so she also could draw SS at her time. Dad’s health was not great due to ruining his lungs with smoking before he quit at age 45 (he had emphysema). He was looking forward to obtaining Medicare at age 65 because he was paying a lot for his health insurance (while mom had a very reasonable plan/payment). Dad died 2 days before he turned 64 - of small cell lung cancer. It was caught early, but at the time only one chemo for that form of cancer, and it was ineffective - now there are more treatments available, and he might have had more time. Mom died at age 77.
So health does need to be kept in mind with the SS situation.
Not sure what thread this really belongs in…
My son has a milestone birthday today.
Last night I got a text from him asking what our retirement budget is. He and his wife are fairly high earners for their age, and they’ve done a great job saving for retirement every year since they graduated college. He’s trying to figure out how much he needs to continue to save, especially for retirement. He was going to take our budget number and project it out to the future. We discussed that our number is meaningless - they need to calculate what their expenses are as they get closer to retirement. Also told him they should do some “living for today” in addition to saving for retirement, but continue to live below their means. I told him he should continue to save as much as possible, bc once they have kids (they think they want them) they may not be able to save nearly as much. You get the idea. We both have business degrees so can “talk the same language,” and it’s nice that he consults me/we can talk about this kind of stuff.
There’s a proposal to cap social security benefits at $100k /year for couples. Obviously this would apply only to people who have been consistent high earners, meaning they’ve paid the most into the system.
The justification for the cap is that “nobody needs more than $100,000/year.”
If this argument gains traction I predict a rapidly slippery slope to further means testing, as in “you have big fat RMD’s, you don’t need SS” or “a couple with an AGI of $100,000 is rich…”
My son and dil saved a lot before they had my granddaughter. They both make similar salaries so they lived on one and saved the other. They bought a house that was below what they were approved for and tried to pay down the mortgage.
Now that they are paying for daycare, they use more of their salaries. They put enough right now to get the match on their 401k but the days of living on one income are gone.
They are making that choice for my dil to continue her career that she has.
My daughter has another situation. They are older, they may or may not have children. Her husband is a high earner and has a lot of PTO. If it’s determined that they won’t be able to have children, I think my daughter will pivot her career. Go back to school to a job in healthcare that would be better for their lifestyle.
I am positive that they are saving plenty for retirement but they are also doing some luxury vacations. TBD how their story goes.
Isn’t it true that any income over a certain amount doesn’t have to contribute to social security? So “those people” have actually paid less to way less % of their income into social security, right? Ugh… very frustrating. But I do agree something has to be done.
(This isn’t just to Sherpa, but he posted the article so I responded to him)
I asked AI who gets a better return, lower or higher income workers.
The Social Security Administration (SSA) calculates your monthly benefit (the Primary Insurance Amount or PIA) by taking your Average Indexed Monthly Earnings (AIME) and applying three different percentages to different portions of that income.
As of 2026, the replacement formula works roughly like this for a worker reaching age 62:
• 90% of the first portion of your average monthly earnings (up to a certain “bend point”).
• 32% of the next portion.
• 15% of everything above the second bend point.
Because the system replaces 90% of a low earner’s income but only 15% of a high earner’s top-tier income, the “return on investment” (ROI) in terms of percentage is much higher for the low-income worker.
Our SS contributions won’t entitle us to $100k/yr but our concern is that at some point in the future taxable income and retirement savings will be used to justify reducing or eliminating SS payments altogether.
Yes, and this concern is what makes it difficult to know when to take it.
If I wait until 67 (5 years from now) and dh waits until 70 (7 years from now) will we receive zilch? Right now we are planning on waiting so as to optimize total amounts received on the assumption that I will live longer. But, it’s going to stink if that results in our receiving zero when we could start taking it now. Well, I could. Dh is still working full-time
Just finished a class on retirement financial planning (it was like drinking from a firehose) but today he did comment that its often wise for the lower wage-earner to take their SS at FRA and let the higher wage-earner’s grow at 8%.
I just had a discussion on this issue with my AI (I use Gemini) and it appears that if we’re concerned about means testing we should take SS at full retirement age rather than waiting until 70.
this year, the income cap is $184k. Salaries up to that level are taxed the same FICA rates as everyone else. But salaries above that amount are not taxed for SS.
Back in the day, the income cap was set such that everyone would get something back net over what they paid in. A typical proposal today is to eliminate the income cap so the higher earners will pay more into the system. However, at that actuarial level, their SS benefits will not exceed what they paid in thru payroll taxes. (but that’s a political question for the politics thread)
My current “plan” it to take SS at my full retirement age, but I may decide to wait until 70. My mom and 3 siblings dies @70, so I’m inclined to take it a littler earlier than that. I figure full retirement age is kind of splitting the difference (between 62 and 70).
We have seriously debated NOT getting Medicare part B, and just going with our federal employee health benefits, which are subsidized “forever” IF things don’t change. BUT, we are worried about things changing, so my husband took Medicare part B and I will likely also.