creating a debt free life

Posts tagged ‘retirement’

Social security, when should you take it ?

I have been reading more and more about social security lately and the debates on when to take it get very heated. Many people argue that their parents died young so they want to take it the minute they can and not risk losing out on retirement time.

I have done a lot of research about social security and as people in the mid fifties , like my husband and I, make thier decisions, they have more than that to consider.

For one, just because a parent or parents died young, does not mean you will. Health care gets better every year and we are learning more and more how to eat and  live for longevity as well as the fact that your attitude toward aging can  have some impact on how you age, but that is not what this post is about .

I am concerned that people are not keeping up with  social security and what is going on with it. The fact is, in 2033, if nothing changes, benefits will be 25 perecent less per month for everyone. So, if you are planning to retire around that time, or will be collecting social security after that date, for any length of time, you need to seriously consider when you plan to retire.

The funds that the government is using to pay the full benefits will run out by 2033. Keep in mind they have already changed the date once or twice before, staring with 2042 ten years ago,   and then our statement said 2037 back in 2010,  so it could happen sooner. But by that date for sure , the only money they will have to pay social security is what they collect each month from the working people checks, which is estimated to be around 75 percent of benefits owed. At that point, everyone will have thier benefits cut by 25 percent even if they have collected full benefits for ten years or more, it does not matter, that is how much they will pay everyone, 75 percent of what is owed.

So, when considering the age to retire, consider that if you are scheduled to have full retirement at 67, that money will be cut by 25 percent in 2033. For us, my husband can retire at 67 in 2028, which means he has five years after that  and his benefits are  cut 25 percent. HOWEVER, if he works just three additional years, he will earn 8 percent more each year, bringing him up to 24 percent more for those two years he can collect the full amount until the decrease happens in 2033 , and at that point, we only lose 1 percent from what we would have gotten at 67. Which means my husband has to work until 70 to get aprox what he would have gotten at 67 if they were not cutting benefits. That is a big difference. 24 percent is a lot. If he lost 24 percent of his social security at 67, that is a huge amount less then we will lose at 70. He will have earned enough those extra three years to basicly cover the loss he has two years later when he is 72 years old.

We will continute to work hard to stay healthy and we tell our kids we plan to live until 110. Will we, maybe, maybe not, but we believe it is very possible to live a very long and healthy life . We are planning a very extended trip to Europe in our early 70s. We are not concerned about all the elaborate break even debates if you take it early and work, and all the agruements out there about why we should not wait to take it. We look at it as simple math. We get to keep more per month  if he works three years longer, and for him 62 is not an option, he would get so much less money it is not even worth the conversation. That is only 8 years from now. He will be 54 this month. So, he will work until 70, maybe even 71, we are not sure, just to save a bit extra as he can work and collect that year. And you no longer pay in after 70 which is nice too . It is not like he does not get vacation and days off, he just still goes to work for a few years longer to give us a better retirement. To us, that is worth it. You can retire at 67 if you have other means of support and just not collect social security until 70 , that is an option as well if you have other streams of income , like a working spouse, and a pension.

Now, if someone has severe health issues and the possibility of them living to 70 or beyond is in question, that is a different conversation altogether. But healthy people should really consider the long term ramifications of retiring as early as possible, when we are not really sure how it will go. How much will they cut it, and when will that actually be ? It is very possible the time line could get moved again to an even sooner time. My husband and I  might never see the full amount for even those two years, but at least we have some control over how much we lose by him working those extra three  years.

I get really crazy when people want to retire at their retirement age of 66,again, healthy people that have no reason to believe they will not be around a while. They get an extra year of growth, and an extra  year of 8 percent, 32 percent more, and they just give that away !! My husband works with a lot of guys that plan to retire between 62 and 66, and it is a lot of money to just give away.

So, just research it all. Consider that you could live longer than you think you will and having more money as you get older is never a bad thing. If you can physically do your job until 70, you should at least do the math and consider it. You can check your own statements at the Social Security website and find out what you will make at the differant ages depending on when you retire . Also figure out what 25 percent less will be if you will be collecting after 2033, which is 18 years from now. Anyone in thier mid fifties, this is really important to your future to make the right decision. If you have enough pensions and retirement savings, you might be able to take that loss and not miss it, but many of us, we will feel it if we lose too much so I just want people to consider everything. For us, those three extra years are crucial to having enough income for retirement.

Thanks for stopping by and I would love to hear what you think. I am not trying to provoke, not by any means. I am honestly concerned about people that do not understand what will happen, that might not have heard about the benefits being cut. I support people making the decision that is best for thier lives,as each person has to make thier own decision based on how they feel , and where they are,   but I just want them to have all the information so they can make the right decision and have no regrets !!




What does wealth mean to me /you ?



Another blogger posed the question, what does wealth look like, or mean to  you. I did not have to think long. She suggested some things, among them nice cars or house, but to us, that is not what we are going for.




Wealth to us, my husband and I means security. Freedom. When you owe money, you are in many  ways, working for the  company you owe. You work for them, not yourself. You have to plan your life around work you have to do to pay those debts every day. Now, I know there is money you make that does not go to them. But  if you have substantial debt, you have a lot of hands held out each month and often times, when you include your mortage, they get a lot more  of your check than you do. Period the end.

We have dreams of course. We want to pay off our house and we want to buy a building downtown to start a business. With no mortgage, that is possible. With a mortgage, possible but stressful and not probable.

Retirement for us  has never meant to stop working and just play golf and sit around be lazy. Quite the opposite. We want a business to run, something we love to do when he retires from where he works now,  so we keep active and busy . We want reasons to get up every morning. A purpose. We want to be part of the community and get involved with community events and enjoy being out in the world.

David will never retire from working. He is very vocal about that. He saw his own father retire and sit in a recliner and die. He refuses to own a recliner. They are not allowed in the house. He will retire from the company he works for between 70 and 75 years old.. What age depends on where we are on this plan. How much is saved, do we have our building already, how much security do we have in place.  We have just over 18 years until he is 70. We cannot waste any time. We have  to get our debt and house paid off asap so we can make the  decisions that affect the quality of our golden years. Now a days  you can expect to live into your nineties and maybe even 100 and that is our goal, we joke we want to live until at least 110 , and we will try to do that , but we want to live until the day we die, not  be in a  nursing home or sick, so we are working on our health as well.

Some things are out of our hands, but we are grabbing  what we can control. We are working to get thinner and healthier. Can we prevent anything from happening, no, no one can, but we are thinking positive and planning for a long full life. We CAN pay off all our debt. We CAN save up a huge nest egg both for emergency and retirement. We CAN walk and eat right. So, we CAN do a lot. We also CAN plan and plot and come up with a great retirement business that will keep us alive and happy and excited to get up every morning.  Something we can do together.

So, this is step one, which is very critical. Pay off our debt.  Every single dime, including the house. Then save. Save money like squirrels save acorns.


Once we have an 8 month emergency fund and have enough money going into the 401k, then we start saving again for our business. There is nothing romantic about our plans. Nothing edgy. It is just staying the course and making sure we do what we need to do to make things happen the way we want them to happen.

We recently read a quote that said something to the effect of , dreams without plans are wishes. I have no clue who to give the credit to, but it is so true. If you dream, but never make a plan for that dream, it really is just a wish. It will probably never come true.

Things happen and that is okay. As long as we have our emergency fund, it is all good. Occasionally our savings will be  redirected to emergency to rebuild if something like a blown water heater, or air condiioner malfunction happen, but then we just rebuild what we had to spend and, once done, back to where we were at. Simple. Easy to follow.

Lets face it. Budgets and diets are both alike in many ways and people resist them for the same reason. It is more fun to not do them. Eating and spending what you want sounds like fun, but is it really ? At the end of the day you are fat and/ or broke and that is certainly not fun.

We had  50 grand in the bank once. Years ago.  An inheritance. What an amazing feeling that was. But getting laid off and being out of work for months before he had the job he has now,  and having to do major overhauls on two baths that were close to unusable, and some foundation repair and put up fences, and and loaning to our grown kids who were in need at the time, who did pay back every cent within a few years, just kind of ate it up. Very sad.

I want that feeling again. It was so fun to walk into a store and KNOW y ou could buy anything you wanted cash, but are choosing not to. It was fun to know we could pay cash for a car, but did not !! We loved that feeling and cannot wait to have it again.

So, we know how it feels, so we are working toward that feeling  of security that money gave us at the time.  Wealth to us is many things, but not fancy cars and houses. If we have those one day great, but they are not high on our list no matter how wonderful they are !!

So, what does wealth mean to you ? How do you define it ? It can be a very defining question !!!!

Hope you enjoyed my scrabble piece and chain  play and my modge podged acorns, I love playing and making things to put on my blog !!!

Thanks so much for taking the time to come by, it  means a lot to me !!!