About 10 years in the past, I attempted logging onto SSA.gov to verify my Social Safety advantages. You’d suppose after a long time of paying FICA taxes (6.2% for SS, 1.45% for Medicare), the federal government would possibly make it straightforward to see what you’re entitled to. Nope. As a substitute, the system demanded to bodily mail me a PIN. I attempted thrice over 12 months. Nothing ever arrived, so I gave up.
Then I attempted once more throughout COVID. Similar factor. Good! After 20+ years of working, paying into the system, and saving diligently, I nonetheless couldn’t get into my very own account. I by no means counted on Social Safety anyway, so I chalked it as much as one other instance of my tax {dollars} going… someplace.
Fortunately, the federal government ultimately consolidated login info by Login.gov. I reset my password fully on-line, uploaded my driver’s license and a selfie, and – miracle of miracles – lastly accessed my Social Safety dashboard by SSA.gov.
In the event you haven’t established your login but, do it. As a private finance nerd, it feels extremely satisfying to poke round. When you perceive your Social Safety progress, you may higher plan in your retirement.
In reality, it’s possible you’ll be saving $1 million extra or working 5+ years greater than that you must!
My Projected Social Safety Advantages
Beneath are my estimated month-to-month advantages if I begin at 62, wait till full retirement age (67), or delay till 70:
- 62: $2,641
- 67: $3,751
- 70: $4,651
Since I’m feeling comparatively wholesome immediately at age 48, essentially the most logical choice is to wait till 67, my full retirement age. My purpose is to not solely attain 67, however keep wholesome sufficient to benefit from the payout for many years after. In spite of everything, residing longer and having fun with life is the largest return on funding of all.
Advantages are based mostly in your lifetime earnings. Social Safety “indexes” your previous wages for inflation, then averages your highest 35 years to find out your month-to-month profit quantity. For 2025, the 6.2% Social Safety tax applies to revenue as much as $176,100 for workers. In case you are self-employed, you need to pay double.
To qualify for retirement advantages, you want 40 whole work credit. You may earn as much as 4 work credit per yr, and in 2025, one credit score is earned for each $1,730 of revenue. So in case you earn at the least $6,920 in a given yr, you’ll obtain the utmost 4 credit for that yr.
These years do not must be consecutive. When you’ve earned your 40 credit (takes 10 years), you’re thought of absolutely insured for Social Safety retirement advantages for all times, even in case you by no means work one other day.
The extra constantly you labored and the extra you earned, the upper your profit will likely be (inside SSA limits). I’ve technically been paying FICA taxes since 1994, after I labored at McDonald’s in highschool for 2 years, so I crossed the 40-credit threshold way back.
Can I Reside Off $3,751 a Month in Retirement?
Surprisingly… I believe the reply is sure.
The profit quantities proven on SSA.gov are expressed in immediately’s {dollars}. They don’t embrace future COLA (inflation) changes. However as we noticed throughout COVID, Social Safety is prepared to maintain up with inflation. 2023 noticed a formidable 8.3% COLA improve. That was an eye-popping bump and gave me hope the system gained’t let retirees fall too far behind.
If we assume ~3% annual inflation, my profit in nominal phrases will roughly be:
- ~$4,000/month at 62
- ~$6,500/month at 67
- ~$8,800/month at 70
Constructing a Finances to Reside Solely on Social Safety
If I begin at 67, I’ll obtain $3,751/month, or $45,012/yr in immediately’s {dollars}. Right now, my household of 4 can’t reside on that quantity. However in 19 years? It’s extremely attainable assuming a number of key issues occur:
1. Each Youngsters Grow to be Financially Impartial
By 2044, after I’m 67, my children will likely be 27 and 24. In the event that they’ve launched efficiently, they shouldn’t need assistance from the Financial institution of Mother & Dad. I estimate a 40% likelihood of this taking place, given how dwelling costs have outpaced wage progress. Younger adults face a tricky highway to independence, particularly with increased housing prices.
That stated, I’ve deliberately bought a rental property every time one in all my kids was born. The plan is to carry these properties by their school years to assist cowl the price of elevating them. And in the event that they determine they need to reside in San Francisco as adults, I’ll lease the properties to them at 30% of their gross revenue, which feels each honest and financially sustainable. In the event that they don’t find yourself needing the housing, I’ll merely proceed utilizing the rental properties to assist fund our retirement.
2. We’re 100% Debt-Free
That is extraordinarily possible. I solely have one rental property mortgage left, which I’m on observe to repay by 2030. I might pay it off now with my Treasury bond holdings, however since Treasuries yield ~2% greater than my mortgage fee, I’d reasonably hold the unfold and earn free cash.
3. We Relocate to Honolulu To Save Cash
Even and not using a mortgage on our San Francisco dwelling, property taxes and upkeep exceed my Social Safety profit. The answer is to maneuver into my mother and father’ property in Honolulu. The place is paid off, the land has a number of properties, we spent $40,000 updating the in-law unit, and I’d be splitting property taxes and upkeep prices two or 3 ways. Hawaii’s property tax fee is the bottom in America.
If these three issues occur, I’m 90% assured I might reside off $3,751 a month gross. Here is a sensible funds per 30 days:
- Core residing bills: $1,500
- Meals: $1,000
- Transportation: $300
- Leisure: $300
- Medical: $500
- Complete: $3,600 (vs. $3,751 month-to-month gross SS profit)
My Spouse Will get Social Safety Too
Assuming my spouse and I are each nonetheless round and collectively at 67, she’ll have a comparable profit. Abruptly, we’re not speaking about $3,751/month, we’re speaking $7,000–$8,900/month, relying on when she begins taking Social Safety. If she takes Social Safety at 64 after I’m 67, then our mixed Social Safety advantages will likely be roughly $7,100/month.
With two individuals residing collectively, housing and utilities don’t double, so the spending effectivity is large. After core residing bills, we could have $5,000+ a month left. Lots for meals, journey, and hobbies.
Positive, we’d not cruise Europe with a balcony room twice a yr, however one good trip yearly or two? Simply doable.
Hawaii affords so many free or cheap actions, similar to seaside days, tennis, pickleball, and mountain climbing, {that a} high-rolling retirement isn’t mandatory.
Even spending $100/day on meals ($3,000/month) nonetheless leaves $2,000+ for every little thing else. With out debt and childcare bills, life will get a lot simpler to afford. On this situation, I am 98% sure we are able to reside off each our Social Safety advantages.
Add On Tax-Advantaged Retirement Accounts, Rental Properties, and Brokerage Accounts
Till immediately, I by no means significantly thought of the concept Social Safety might cowl 100% of our retirement bills. As a substitute, my complete focus has all the time been on maxing out my 401(okay), constructing a rental property portfolio, rising our taxable brokerage account, and investing in enterprise capital to fund our conventional retirement years.
However after working the numbers, it’s apparent I’ve saved manner greater than mandatory. And unusually, although I retired early at age 34, it’d nonetheless not have been early sufficient!
Due to a roaring bull market in each shares and actual property since 2012, after I left finance, my investments have compounded sooner than my spending and revenue. Add in supplemental revenue from aspect hustles (e.g., Uber driving) and this website, and I’ve been grinding for no motive.
And now, with Invoice Bengen elevating the protected withdrawal fee from 4% to 5%, it reinforces the concept we might all loosen up and loosen up extra. In case you are an everyday Monetary Samurai reader, I am fairly certain most of you’re accumulating extra wealth than you want as properly.
Social Safety Millionaires In The Making
My estimated $45,012 in annual Social Safety advantages beginning at age 67 (in immediately’s {dollars}) is equal to having $1,125,300 in capital, assuming a 4% withdrawal fee. I assume a lot of you’ll possible have Social Safety advantages on this identical vary.
In different phrases: we’d all be Social Safety millionaires. With roughly 65% of Individuals proudly owning properties, and the overwhelming majority of house owners over age 62 being mortgage-free, the narrative of an impending “retirement disaster” could also be overstated.
Most Individuals even have financial savings and taxable funding accounts to complement Social Safety. Some even have priceless lifetime pensions too. When taken collectively, the retirement image for many individuals is probably going a lot more healthy than the headlines recommend.
In the event you’re burned out from work and have already run the numbers in your Social Safety and retirement financial savings, think about negotiating a severance and breaking free sooner. I really imagine many people are working longer than mandatory. And in case you safe a severance package deal, you’ll have a cushty monetary runway to assist you as you enter the subsequent chapter of your life.
Listed below are the opposite advantages of Social Safety price noting.
Understanding Social Safety Survivor Advantages
In the event you move away, survivor advantages could go to your:
- Partner
- Minor or disabled kids
- Dependent mother and father
Survivors sometimes obtain 75%–100% of your full profit relying on their relationship and age.
For single-earner households, this safety is large. However these advantages alone often aren’t sufficient to totally substitute earnings, which is why time period life insurance coverage stays important for younger households.
What If You’re in a Lengthy-Time period Relationship however Not Married?
In the event you and your accomplice aren’t legally married, survivor advantages grow to be tough. The SSA usually is not going to deal with a home accomplice as a partner until your state acknowledges the connection and you may show it with documentation.
Even then, it’s not assured.
If you’d like your accomplice to obtain survivor advantages, the most secure choice is to get legally married a yr earlier than you suppose you will move. Nonetheless, given that may be tough to determine, maybe shoot to get married earlier than 62.
My Survivor Profit Quantities
If I die this yr, my household would possibly obtain:
- Minor youngster: $3,024
- Partner caring for youngster beneath 16 or a disabled youngster: $3,024
- Partner at full retirement age: $4,033
- Complete max household profit: $7,058
- One-time demise profit: $255
Understanding Social Safety Incapacity Advantages (SSDI)
SSDI is revenue safety in case you grow to be unable to work attributable to a situation anticipated to final at the least 12 months or end in demise.
To qualify, you need to:
- Have a extreme medical situation that stops you from doing earlier work and every other appropriate work.
- Have sufficient work credit (often 5 of the final 10 years; youthful staff want fewer).
Most SSDI recipients obtain $1,000–$2,000/month, although advantages fluctuate.
My SSDI estimate is $4,033/month.
Chances are you’ll need to complement SSDI with non-public incapacity insurance coverage if in case you have dependents.
Social Safety Medical Advantages: Medicare
Medicare is the principle healthcare security web for retirees and sure disabled people. You qualify by:
- Turning 65, or
- Receiving SSDI for twenty-four months
Medicare has 4 components: A (hospital), B (medical), C (Medicare Benefit), and D (prescriptions). It covers lots however not every little thing, particularly long-term care, dental, imaginative and prescient, and listening to.
Retirees usually complement with Medigap or Medicare Benefit.
Medical prices can destroy even robust retirement plans, so Medicare gives a vital baseline.
Social Safety Isn’t Wonderful, However It’s Far Higher Than Nothing
Each private finance fanatic has run the mathematics: in case you invested your FICA taxes in an S&P 500 index fund over a profession, you’d possible retire with a number of occasions the worth of your Social Safety profit.
However right here’s the fact: Most individuals would by no means constantly save and make investments that cash on their very own.
The compelled financial savings facet helps forestall aged poverty. Homeownership works equally: by forcing individuals to pay down principal, they accumulate wealth they won’t in any other case construct.
For many of my profession, I handled Social Safety as irrelevant in my retirement planning. However now, at 48, really taking a look at my dashboard, I’m warming as much as the system.
My uncle retired from the federal authorities this yr and commenced taking Social Safety at 70. It makes a large distinction in his life-style. He was the one who advised me in regards to the new Login.gov system too whereas I used to be in Honolulu.
As I get nearer to eligibility, I’m extra appreciative of what this profit can do. Taxes are nonetheless disagreeable, however at the least with FICA, we do get one thing significant in return.
Readers, might you reside off your Social Safety advantages? If not, what gaps do that you must shut earlier than you get there? When was the final time you checked your Social Safety dashboard?
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