Counting on No Social Security Benefits

by TTMK on September 2, 2013 · 7 comments

I know that social security is an important part of the finances of many a retiree.  When older, it can help to have all the cash flow you can muster up.

It’s quite a long way ahead for me, and retirement isn’t going to be coming anytime soon.  I’m nowhere near the age of being eligible for any social security benefits, and that’s fine with me! Sorry, I hope that doesn’t sound crass in any way, but every day I get older I truly appreciate each one as special.

So while it’s far away, it’s not too early to be thinking about retirement.  After all, we should be saving for retirement from when we start working.  It makes sense to think about what our sources of income will be, especially since we won’t be working then.  In the spirit of multiple streams of income, social security can certainly fit that objective quite well.

The thing is, while I know it’s something that’s a critical element of cash flow for many people, I don’t want to count on it in the future.  It’s one of those things that simply isn’t directly under our control.  What if there are some unforeseen, extenuating macroeconomic or political circumstances in the future that result in benefits being curtailed? Or, simply eliminated?

Just like with any other planning, there is a time and place for optimism.  There is also a time and place for conservatism in making assumptions.  I’d rather make any and all plans based on no social security benefits forthcoming.  If anything does come my way, it will be considered a great bonus.

If you’re closer to retirement age, then there’s probably more reason to be comfortable counting on the income.  But the longer the time horizon, might as well just pretend social security doesn’t exist.  Don’t worry about what’s being deducted from your paycheck 🙂

My Questions for You

No matter what your time horizon is until retirement, do you factor in social security?  Why or why not?

What do you think social security might look like years down the line?

{ 7 comments… read them below or add one }

Michelle September 2, 2013 at 9:50 am

We are not going to factor in social security into our retirement budget. We won’t reach 65 until more than 40 years from now, so I’m not sure if it will be around. I would rather focus on something that I have control of.

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TTMK September 3, 2013 at 9:45 pm

Michelle – very wise words, focus on what you can control. I like that approach.

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Edward Antrobus September 2, 2013 at 1:21 pm

I’m part of the generation that just doesn’t assume that social security will still be there when I’m ready to retire, which hopefully won’t be until I have one foot in the grave already.

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TTMK September 3, 2013 at 9:44 pm

Edward – I’m with you on not assuming that Social Security will be there upon retirement. Seems wise, right? As far as the retirement date goes though, I hope you get to enjoy at least some time!

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Kevin @ Credit Bureau Insider September 4, 2013 at 6:19 pm

Social Security sends me an annual update of my projected benefit levels. It’s a neat report showing my reported income over the years. It’s fun to look at how my income grew, and not a fun to see the valleys.

It breaks down the expected monthly benefit based upon what age I stop working: 70, 66, and 62. If my wife and I work to age 70 we would see almost $4,000 per month. So yes, that is a significant factor in our retirement planning.

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Bryce @ Save and Conquer September 5, 2013 at 11:03 pm

Social Security (SS) will be around for a long time to come. The populace will not let the polititians get rid of it. That being said, some sort of means test with reduced benefits will probably be implemented at some time. We do not count on SS benefits in our retirement calculations. Not because we don’t think it will be available to us, but as incentive to save more. I figure SS benefit payments will then be gravy that we can spend on travel and perhaps helping our kid.

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TTMK September 9, 2013 at 11:38 pm

That’s a sound way to approach it, I think. Would be a nice bonus for things like what you mention.

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