When I was 19, I purchased raw land and also purchased a very used travel trailer to live in on my land rather than paying rent to someone. After working construction building custom homes from the ground up for my boss, I designed and built my home debt free all by myself. When I finished building it, I sold it and did the same thing again. After I had sold my second home, I quit my job and continued doing the same thing but keeping them as rental properties. I retired after my tenth rental when I was 31.
@@flinch622 Yes, I managed to just get out of the rat race where I could afford to think clearly and plan how to manage that cash flow so that it worked for me rather than me working for it.
When my mother hit 65, she pushed her retirement to 67. At 66, she was diagnosed with ovarian cancer. She only benefited 6 months from her SS after she retired, and she passed away. RIP Mama.❤ Hopefully, this will be a reflection and lesson for us.
Sorry to hear, but I'm sure there are plenty of stories of people who took it early only to live well into their 90s and really needing the extra money.
So sorry, such a sad outcome. Same thing happened to my mother. Retired at 62, sick at 63, and dead at 66. She only enjoyed one year of life not being a wage slave. My advisor keeps pushing me towards an investing model where I live to 94, per the actuarial tables given my age (apparently). I have no faith I'll live to that age. My goal is to have a solid decade of enjoyable non-working years. If I run out of money, I'll do it when I can't do anything anyway. Even at that, I feel I'm solidly conservative with my strategy planning on an age of death somewhere around the mid 80s. But, I'm not risking working too long. As far as I know, we only have this one life and I refuse to waste it making others rich.
My wife and I both retired at 55, about 10 years ago. Every point you brought up is valid and something we had to deal with but we were able to make it work. What saved is was ACA for health insurance, 72T withdrawals from our IRA's to fund 7 years of living, and then claiming Social security at 62. Low bills and no car payments or credit card debt helped a lot! Thanks for a great video Erin!
We're doing the same thing next year, utilizing the rule of 55. Healthcare-wise, we're going with Farm Bureau Insurance and choosing their $1500 deductible plan that includes all preventative medicine, dental and vision. Right now, it looks like we'll be paying roughly $930/month for the both of us.
I've had type 1 diabetes since age 11. I'll be lucky to even live to 62. Retirement by 55 has been my goal since I was a teenager. The best thing my parents taught me young was putting money aside for when I'm old. I'm 42 now. And self funding my retirement through Roth IRA s, my workplace 401k, etc .. over the past 20+ years will enable me to reach my retirement at 55 goals. If I make it to 62, Social Security will be a nice little bonus, but I'll be damned if I'm going to sit here and rot in a work chair a few more years for what will be an insignificant couple grand a year from social security. Life's too short, especially for me.
I know how you feel. My dad died of cancer at 57. We both suffer from the same affliction that caused it (acid reflux - esophageal cancer), so I'm definitely not waiting until I'm 62 to retire.
I have known of a number of diabetics who came down with diabetes in childhood and lived to be old. Neil Young the Canadian folk singer is one of them. He had onset in early childhood and is now 78 years old. A farmer I know is in his late 70s and he came down with diabetes about age 13. My own son had onset of type 1 Diabetes at age 7 months and he controlled his diabetes very well with a pump and frequent checking. But unfortunately he died in his sleep from unknown causes last year at age 42. He had an engineering degree and wonderful career going.
My mom got type 1 diabetes at 12:00 and she lived to be 79 age is just a number stay healthy and your number will be much larger than you think it will be today😊
@@Maryland_Kulaknot exactly accurate. They have a reduced pension for doing 20 years and the TSP. This extra is matched and if they don’t retire, they walk away with something portable. Even if they only accumulate 5 years. I am a beneficiary of that pension and the TSP. They both provide 2 buckets of income.
You have been living solely off your 21 year pension for the past 10 years? Or are you like most military retirees and working full time in another career or job?
@@Dave-sw2dm happy holidays..I get disability and my retirement. I was under the old rule. I retired as an E8. I receive 50 percent of my base pay and military disability. I also stay in El Paso Texas. I am from Virginia but the cost of living is significantly lower
I’ll be retiring at age 55. What’s not talked about is the quality of life retiring as early as possible. I want to enjoy life while I still have my health versus 62+. You can alway make more money but you can’t make more time. My personal philosophy, that’s why I financially plan for my retirement early.
Looks like I might retire at 56. I agree 100% with what you are saying. Where there is a will there is a way, everyday spent working is one less day living life to its fullest. There's no guarantee that you can travel and do some of the things you want to do at 62, 65 or 67. I'd rather live life for the next 10 years and then if need be go back and do some little job for some extra income in my late 60s knowing that I've lived life, then make more money not knowing if I will be able to live life.
The average American lives to be 76.33 years. The average American male only lives 74.8 years. That doesn’t tell you when people start having health issues and a reduced quality of life. If you start receiving social security at 70 you will need to live until you’re 78 to collect the same money as you would have if you retired at 62. If you retire at 67 you’d have to live until you’re 76-77 for benefits to even out. If you know for a fact that you’ll be healthy and live well into your 80s or 90s then waiting is the smart move. Unfortunately, most of us don’t know that.
Yes, I jumped off the back of a utility truck for 30 years not sitting at a desk somewhere, the body can’t do that forever so I saved and invested retired at 53 1/2.
We are claiming early at 62. No one know how long they will live and we want to spend while we are healthy and let the investments grow with fewer withdrawals
I think it's worth a video on the tradeoff of taking it early vs. keeping your money invested. There has to be a certain rate of return where it would make sense to take SS early. It's going to be a complex table once you factor in how long you live.
@@MrPizzaman09 Hi, I agree that such a video would be generally worthwhile. In my specific situation, I don't care if my investment returns beat social security growth or not. We have enough and my goal is not to maximize my estate, it is to live now.
@@johnfitbyfaithnet And as Gen X we have to consider those funds are going to run out. Right now I don't see the political will to fix this. I have a bad feeling it won't get fixed and the benefits will just go down by around 30%.
I only have 24 years of SS income but retired at 52, not a moment too soon. I plan on taking SS at 70 as I considered it more like "longevity insurance". I have done well enough with my investments that I won't need the money. Working longer would just be a waste of the precious time I have left to live. I am now focusing on extending my life with a healthy lifestyle and just enjoying doing whatever I want to do. I love owning my time.
Just make sure you understand that it’ll take a long time to recoup lost SS income, especially had you invested that SSnduring the eight years you didn’t collect. The average American loses physical freedom before 70 so quality of life should be factored in as well.
@@greghelton4668 Exactly. The money left on the table while waiting to collect at 70 takes almost to 80 to recoup without investment earnings. THEN you start to come out ahead. It really does not make sense, but to each his own.
i will just wait until 70 unless for some reason i can't..but with my plans i hopefully won't need it until then or at all. an insurance policy i can take anytime after 62
When I was 25, I met with my first financial advisor who went over social security with me. He did the calculations based on my salary at that time and asked me if I could live on that amount of money. It was very eye-opening and motivated me to save/invest at least 10% of my income starting at that age. I just hit 50, and I actually don't include Social Security in my retirement income planning. I'm on track to retire at 58; Social Security will just be icing on the cake.
I retired from SSA after 20 years 1/2 of which I spent at the National 800 number. I watched thinking there’d be a lot to criticize. Nope. That is one of the best explanations of the impact of early retirement I’ve seen anywhere (including the explanation we were given). I was so wrong. Beautiful, exceptional job. SSA could incorporate this straight into their training program. Well done.
Love the bloopers. Your videos are always very well thought out. As someone that retired at 52 (self funded) it’s always nice to see your POVs. You present real information and not over the top sensationalism that many vlogs do. My wife and I had looked at all the zeros we were getting but decided it was okay. But it is important if you are going to be living off SS. Always look forward to your videos
I retired at 45, now 55. I worked in finance for over 2 decades and the stress of that environment and the large corporate culture is poisonous. I have friends that have had heart attacks in their early 50's and have major health problems that still are in that rat race. Your life and health isn't worth it for what? A few million more dollars that you aren't likely to enjoy in your old age. I earned enough to live comfortably off my investments for the rest of my life and that was enough for me. I'm glad I made that decision and I enjoy every day now.
@@LibertarianRF I own 6,000 shares of SMCI I just bought on Friday @ $40 per share. It popped 15% yesterday alone. My price target on it is $130 per share. It has had a lot of bad news and is a risky stock (which gives you a great opportunity to make a lot of money if things don't turn out as bad as the news appears to be). I also own about 34,000 shares of PDI that I've been drip investing for the past few years with an average price of $17.50 per share. PDI pays a $0.2205 per share dividend every month. It is hitting record highs right now because the Fed is dropping interest rates. It goes ex-dividend on Friday. PDI is a no brainer investment at this point. I'll probably add another 10,000 shares+ in the coming year.
I also retired at 45 from business. I purchased a few office buildings and hired a mgmt company. So far it's been a great passive income to go with my dividend stocks. I agree, why swim in the poison pool for money that isn't likely going to change anything.
@@LibertarianRFif your poor then invest in a business and grow it. 100% that money because you work it. When you have the money invest in VOO, BTC, Real astate. 15% that money... it's easy after that.
Start SS at 62 ... I've seen multiple family members hold out for the full benefit and die shortly after, missing out on so much money that could have been used to pay off mortgages and leave the estate in a much better place.
There's also those that retired at 62 and ran out of money because they lived longer than they thought they would. The 401k ran out at 80 years old in 1 example.
Retirement is personal decision and it’s different for each of us. For me, I had initially planned to retire at my FRA of 66 and 10 months. However at 65, I hit the wall and it caused me to reevaluate my situation. After crunching the numbers I came to the conclusion that whatever the financial gain of working an extra 18 months wasn’t worth it and retired right after I turned 65. A decision I’ve never regretted.
I’m three months in, so far so good! I spent 35 years in healthcare work at the same hospital. It was hard to let go. That drive home on the last day was emotional. However, the next day I was fine. It was surprising how easily the transition was….
@thomasmoshier3920, Well really it is not! That is why hard numbers like 59.5/62/65/67 have meaning as well as RMD. Sorry , but all of us will have to fit into 1 of those hard numbers. The exception is: One has a few million put back and then they do not care about SS or age
Actually I do have 2 million in my 403b. I also have a significant pension. I chose to retire at 65. Having financial security gives you options. Drawing SS early limits your options unless you have a large 401k balance. Most that retire at 62 do not. They use the excuse to draw at 62 because they convince themselves they’ll die early or SS will go broke. Weak arguments.
@@thomasmoshier3920 The argument is people did not save enough and linger around too long in the work force preventing younger workers from taking their place all because of their piss poor planning. They always think, if I can just make it till....X date, I will have enough. Sadly that day usually never comes.
A couple of my thoughts. I stopped having fun at work after about 37 years. 1.nAfter gritting my teeth for another year, I found that replacing low earning years with high earning years was increasing monthly payout by $15/month. 2. Studies of satisfaction vs income show plateauing after $70,000/year (without attention to renting vs mortgage, vs paid off). 3. My mom's fatal heart attack at 55 and dad's early onset Alzheimer's needed consideration. 4. Retirement is wonderful.
lol, i did the same calculation and if i kept working a few more years i could make an extra $60 a month. A job that gives me more stress than i can deal with is not worth a cheap dinner eating out. I so need to retire by 54.
Great video, Erin. This old dog learned something new. Didn't know about the 35 year average. I'm 54 and considering pulling the plug between 55 and 58. Part of my decision will be based on indulging in a big purchase that is strictly a want. Knocking off my 3 lowest earnings years in the process is tipping the scales towards 58.
Retired at 54. When I turned 30 I started to make this goal a reality. Purchased stocks and added to saving to get us financially stable to 62. Cashed in 401K without penalty. House paid for and no credit card debt. Now 69 and have purchased 2 new vehicles during this time. Wife and I have Travel to Europe 3 times and camped in all 50 states. The more you make the more you spend, the key is living within your needs.
My dad retired at 55 becuz he was a school teacher so he got nice pension n full bennies plus then his SS kicked in at 65 He had investments also but his monthly base was pension & SS Pretty sweet He bought a house and pd it off in 10yrs all on that monthly income. Never carried debt beyond his houses and at first, his cars. Then he switched to used late models n pd cash, in the late 80s or so. Glad he quit at 55, by 65, his dementia was active and by early 70s he couldn’t live alone. So he got to enjoy that decade that usual-age retirees have before decline in old age to die in their late 80s. Cruises, winters playing golf near the beach, lotsa golf…
I actually did retire at 55 in 2011. I was able to receive a work pension at 55 and I remained in my work health benefits system. I started receiving my Social Security benefits at 62. I’m guessing I had between 30-35 years of Social Security contributions. As for monetary opportunity costs, you should consider the value in quality of life for retiring when you are younger and healthy. Experiences can be more valuable than money. In my case I am getting a generous pension from a 30 engineering career. That work pension gets annual cost of living increases. Social Security is 25% of my total income. I am living in Thailand where my cost of living is lower. I also declined paying for Medicare Part B which saves me about $170/mo. Thirteen years later I have no regrets about these choices.
@@kablah777 The major destinations are Thailand and the Philippines. There are many TH-cam videos comparing the two countries for expats. Whatever country you are considering you want to visit there first. The country with the most expats is Mexico. Central America and Eastern Europe are other retirement hot spots and locations with a lower cost of living.
Super curious what someone in your profession with that many years gets in pension. If you don't want to share, I get it. Also, curious what your SS is as well. Mine is $2200 at 62.
@@dawndarling2277 Yeah . . . I won’t share but I was a mid level engineering manager at the University of California in 2011. So after 30 years my salary was the average of our region. Retiring early at 55 I got a good fraction of that.
@@martypoll I work for the state so my salary/dept/position has been online for all of my state career. It's probably different depending on where you retire but my pension is $5546 a month. Trying to determine whether I should get SS now or wait.
I retired at….you guessed it, 55. I am so happy we did. Barring some tragedy my early retirement has without a doubt added years to my life. We bought a small farm and working outside keeping the farm going has done wonders for my mental and physical health. I will begin looking at SS around age 67 but if things remain as they are today I will be waiting until 70 as the former primary wage earner. My wife began her SS this year at age 62 with much joy. Thanks for the video.
Thank you for posting this! I'm 52, but my company is reducing staff and I highly doubt retirement going to be on my terms. So it's good information to have.
I retired at 54. I considered working longer, but found that working longer for the purpose of increasing your social security benefits has very diminishing returns when your average indexed monthly earnings is already higher than the 2nd bend point. The higher you are, the less impact working longer will have.
Yeah this is where I'm at. I've maxed SS for many years but I also have some zeroes in my social security calculation. But if I work longer to erase those zeroes all those dollars are beyond the second bend point.
@@semosancus5506 Exactly 15%. So if you made $100,000 and that years income replaced a zero then your monthly benefit would be 100,000 / 35 / 12 * 15% or $36 a month higher. If it's replacing something other than zero then replace the 100,000 with the difference.
I retire at 55 and are among the top 1% earners when i retire. A few years before my retirement, I figured out social security is NOT pension(i won't call it scam like a lot of financial TH-camrs do). It is supplemental income. Its main goal is to provide minimum level of income for middle class especially low income earners at the retirement age. If you have maximum earnings in the last 25 to 30years, working another 10 years is not going to change much on your full retirement benefit. The last 10 years contribution goes to the pool. You won't see much of the contribution coming back to you. The average life span of american is about 78 years. If you retire at 67 or older, you do not have time to enjoy life. Try to be debt free before 45 and financial independent before 55. I paid for my own college and have zero student loan. Try to live frugally when you are young and avoid expensive hobby and vacation.
I retired at 53. I did the math and working the full 35 years, another 3 years of max earnings rather than 0, would have added $20/month - about 0.5%. I suggest doing the actual math, as the example of losing 11% by retiring 5 years early can be quite misleading.
@@rdspam I don't know when you retired.. each year of zero earnings you are missing SS calc currently would be -> ( max contributable earning/420) *(0.15).. if you assume max contributable earning is 160K.. that would be 57$ per month
Most people don’t decide to retire at 55 when it’s related to SS. Most continue to work despite not really earning much more from SS due to the cost of medical insurance. And it’s not just for them but spouse and even kids. Some parents have kids in their late 30’s and the male can be well over 40. Imagine having a 15 year old at the age of 55. That’s what quite a few face. The working world has changed and many have no issues working beyond 55. Better to be a productive member of society than a leach.
Great information and nicely done. I retired at 58. Fortunately I have a pension and had good guidance along the way to save. I did have some questions about how retiring at 58 was going to affect my Social Security. This video answered all of the questions that I had. Thank you! I also think it is great that you have the confidence to be able to laugh at yourself with the outtakes at the end. Funny!
Great details in your video... One thing to remember though, it often makes no sense to work longer once you already have your 35 years in. Although you may be making more in your current (older) years than you were in your younger years, the difference has to be SIGNIFICANT not only because of the indexing, but also the bend points that Social Security uses. If you have zeros, by all means, try to keep working and fill those in. Zeros are BAD. But if you have a modest $20,000 per year salary from your first few years of employment, and now you are "replacing" those years with $100,000 years, the difference of what looks to be $80,000, over the course of 35 years, indexed, and then using bend points, only make a FEW DOLLARS difference on your Social Security checks. For some people, Time is much more valuable than money. Learn to do your precise calculations before you make your decisions to continue to work just to try to increase your social security check.
As she mentioned, the multipliers used on the a Averaged Indexed Monthly Earnings play a huge role as well. There are three tiers. The first portion is multiplied by 90%, then it goes to 32%, then to 15%. Once you've made enough money so that you are in the 15% multiplier then it becomes difficult to make a significant increase in your social security benefit.
Social security benefits for seniors are an essential safety net for many, but it's also crucial to plan ahead and invest wisely for your retirement. Diversifying your investments across can help build wealth over time. It's never too early to start saving and investing for a comfortable retirement. I’m 63 and my husband 65 we are both retired with over $3 million in net worth and no debts. Currently living smart and frugal with our money. Saving and investing lifestyle made it possible for us this early even till now we earn monthly through passive income.
Alright phyllis, speaking in general terms, investing requires a good amount of knowledge. That's why it's essential to have a solid support system like a financial counselor, especially when picking out assets. I've been working with Laura Grace Abels , who is an investment advisor at a registered wealth management company. I can't recommend her enough; my financial journey has been fantastic thanks to her. She's quite well-known for her services, and she helped me achieve financial stability through investments. Now, I benefit from her passive income strategies every month. So, I'd strongly suggest finding a reliable investment advisor for yourself ..
Laura Grace Abels is based in the United States and can work with anybody wherever they stay. If you would like more information about her, you can conduct a search online.
Personally, I'm blessed and realizing I'm not the only one working with Laura Grace Abels . I will consider myself lucky. I've been able to feed and make a living through her service and great work. For such a person as Laura, I owe her gratitude, support and endless prayers as it is not easy to gain access to such a competent and reliable adviser. Who isn't just wise but has all it takes to handle an investment and is good at what she does..
Thanks buddy.I have had the intentions of starting investing. But I always thought it was late and I think I need to stop procrastinating. I will definitely
I was worried until you got to the wage indexing part, but somehow you covered everything in 11 minutes. The SS calculation is actually fairly straightforward (albeit with many steps) and you can make an excel spreadsheet to calculate what you might receive. Of course since the taxable maximum and indexing factor/multiplying factors for previous years change every year, and you don't know your exact future earnings, it's more of an estimate than an exact projection.
Great video! My target is around 58 🙌🏼🙌🏼. 13 years to go! Been maxing my HSA every year with a goal of having $100k in there for health insurance by 58!
I retired at 58. I was in a line of work my whole life that demanded ridiculous hours and it was difficult to actually use vacation time. So I wanted out to go catch up on living before I was dead. What helped that choice was that I already had 34 years over the max income that SSA uses in the benefit calculation. My 35th highest year was close enough to max to not change the calculation enough to make getting one more year over max worth the wait. I share my example just to encourage others to do the math on your own situation. I had several colleagues who were making their decisions based on hearsay and general recommendations by “experts”. DO THE MATH FOR YOUR SPECIFIC DATA.
Everything you said rings true. In 2019 @ 55.5 yrs old, I was laid off in a large wave of continuous layoffs after 32 yrs, so I have a couple of zero years. However, I was always a super saver. Initialy i was thinking of working again, but it ended up not happening. It seems difficult finding a 'career' type job in your 50's, over time it just wasnt appealing to me anymore either. I was labeled a 'retiree' so have subsidized health care until age 65. In 2023 I turned 59.5 and started IRA withdrawals. I'm doing okay and things should be fine delaying SocSec possibly til age 70 but at least 67.
Yeah some people are forced into retirement in their 50's. High paying companies are more likely to jettison older employees for less expensive new grads.
Erin, my b/f's father retired at 48. He had lifetime heath insurance as well as a pension. Combined that with his investments and SS, he was making more than he did while working! Some people hit the jackpot.
To be truthful, didnt watch any of the video but the title caught my eye. I retired at 56 comming up on nine years ago and if you retire at 55 you got your act together, your not in need of social security. I know at some point I'll collect but i never banked on needing it. Work hard, plan ahead, and retire early.
On a secondary note after watching the bloopers: your hair looks great! That thought crossed my mind during the video, but it felt necessary to share after watching the end…😂
Well done! Your mention of opportunity cost is spot on. It's not just about the extra years of work, but also about the potential cost of delaying Social Security benefits. Most estimates suggest that the breakeven point for maximizing lifetime benefits is in the late 70s. However, this calculation often overlooks the opportunity cost of delaying. If one were to pass away before reaching that breakeven point, the return on waiting would be zero. Even living to 85 would yield a meager 5% return on the decision to delay. While living to 100 could result in a higher return (potentially in the high 8% range), it's important to consider long-term investment returns. A well-diversified investment portfolio can easily outperform this rate over a 45-year retirement. Therefore, my perspective is to claim Social Security as soon as possible so that you can keep more of your own money invested. If the SS program remains solvent, potential gains from delaying disappear if your own investment returns exceed 5%-8.75% depending upon life expectancy (85 vs 100). Even if you assume conservative returns of 5%, the potential gains do not significantly outweight longevity risk and cost of spending your own money for 8 years from 62-70 by delaying.
I retired at 55. I was fortunate to be in a high paying job for many years, but with high income usually you have high stress. And stress kills. By 48 I was on ALL the stress meds. High blood pressure, cholesterol, you name it. At 49 I decided to take a year off and quit that job. I spent the time exercising and pursuing hobbies and was off the stress meds within the year. So I went back to work doing the same thing at another high paying, high stress job. At 54 I had to make the decision to go back on stress meds or call it a career. I decided to call it a career. Again, I was very fortunate that I was in a financial position to take a year off work and to retire early. But don't neglect the health risks of working longer. They are very real. If I continued working, there was a very real possibility that I wouldn't be here today.
I HIGHLY RECOMMEND “GRADUAL RETIREMENT”‼️ Or “incremental retirement”. I “retired” from my 35-year IT career in 2023 at age 57. I had gradually built a TH-cam channel to supplement my income and eventually it far surpassed my full-time job. Now I’m self-employed and working part time. I’m not FULLY retired, but it gives me a good 15 hours of work a week and builds my top earning years for SS until I decide to claim it. Being your own boss is so awesome, and I’m super blessed to have this opportunity. 👌🏼
Thank you for this super informational video. It was very well explained. I never really knew how the SS calculations work until now. Aside from your great content on SS, I must say my absolute favorite part of your video hands down was the last few seconds of out takes. Love it. Thank you!
Great explanation on the effect of SS benefits on early retirees. One major factor that was missed from this video are SS bending points. The short version of it is that at $150k income the effect of working longer (35 years vs 30) is much smaller than at $50k(used in the video) Do the math and you will see that 35 vs 30 makes little difference for someone making $150k
@@adabamasThe second bend point is around $7,000 Say you work and your AIME goes from around $7,000 to $7,400 you only get 15% or $60 a month more in your check.
Retired last year at 55. I will claim Social Security at 62, it would take 17 years to break even if I wait until 67. The Social Security website has a calculator where you can enter the years with zero as your reported earnings to figure out how it changes your benefit. Retire as soon as you can, best year of my life, busy doing what I want to do.
Yep - ad when you funnel the numbers around it may add a few bucks to the end .. not worth the stress of another ear to get $5 bucks ! I play with that tool a lot each year .. Keep saving!
Am 58 retiring next year but the thought of retirement gives me weakness. My apologies to everyone who have retired and filing social security during this time after putting in all those years of work just to lose everything to a problem you never imagined to happen. It’s so difficult for people who are retired and have no savings or loved ones to fall back on.
@@slicksmith856 I was a Federal Agent for 30 years and retired early. I’m currently 58 and will draw at 62. SS Administration tells me that I will receive $2,500 a month at 62 and $3,500 a month if I wait until 67. I put a pencil to it and I come out ahead in the life expectancy column if I draw at 62. My goal now is to live to 62. Enjoy retirement my friend.
Nice video - It prompted me to go login and look at my earnings record. Definitely some good information that will help with my future retirement planning.
I retired at 33 years old I am 37 years old now. My full retirement on SSI is 70 years old. Retired as soon as possible there is no guarantee people going to live until 65 years old.
My wife and I plan to retire using the rule of 55 and were curious how this would affect our future social security benefit. This video was super helpful. It's also helpful to go to SSA.GOV, log in to your account, and play with the calculator. We did and were able to determine the estimated social security benefits if we stoped working at 55 and began drawing social security when we became eligible at age 62 all the way up to age 70.
Hi Erin, great video! Very informative! And btw, you’re looking gorgeous this morning. Love how you went into detail about social security. And love your outtakes! 😊 Hope you have a blessed weekend 😊
Excellent video. It would have saved me quite a bit of research if I had seen it two or three years ago when I first started researching this. I took six years out of the workforce when I retired from the US Air Force at age 43. I have worked both part and full-time over the past 8 1/2 years and I believe 2024 will be the 35th year on my Social Security earnings record, but four of those years have almost no income, so I’m planning to work until age 62 so in four more years from today I will have knocked out the four years of very low income with four years of reasonable income. I also enjoy it greatly what I do so that’s probably the main reason to be honest. However, since it’s quite physical, I figure age 62 is a good time to probably do something different. With my Air Force pension, some rental property, some other investments, plus Social Security at age 62, I have no worries. If my body gives up on work before age 62, so be it. 😊
i retired at 55 3 yrs ago. being an immigrant, i only have 25 yrs contributing to SS. apart from the first year 1997 where i was short of the max by about 3K, everything else maxed the SS limit. at least the missing years are the newer years rather than first yrs of the 35 yr period. amazingly it is still a good amount if taken at FRA. the biggest fixed cost , of course, is private health insurance. i have hdhp and fully contributing to a family HSA/$9300, and paying medical costs out of pocket so i am still saving in retirement. i am living off my taxable brokerage as i leave my retirement plans untouched for now. my marginal rates are filled by roth conversions and my living expenses( from the taxable brokerage) are taxed at 15-18.8%. I'll start tapping my tax deferred at 63 or so (stopping roth conversions then or markedly reducing it) at the lower brackets and then let the taxable take up the slack. a healthy taxable brokerage is key for my situation.
Very clear explanation of how SS. 35 years of your highest earning years is one of the most important points. And I learned about taking ss at 62 and how it's calculated. Thanks for the info!!
I've done nothing smart and always accepted people not paying me what I'm worth I squandered money and now I have 3 years to 55 but no way to retire ever. If you're young and reading this and nobody told you the importance of what to do, start saving today. You don't want to face this level of uncertainty
We are the same age, and in the same boat. Sounds like you had a lot of fun and good experiences, and that is not worthless. I don't think I could ever retire from working, and if you turn the facet around a little bit, that's a good thing. Let's just stay healthy, that is the best asset for a lot of people.
I’ve been working since 14. I didn’t work during age 15, but worked every single year from 16 to now. Next year I plan to retire at 55 and nothing or no one’s gonna stop me.
From the time I was 18 I planned on retiring at 55 but instead I retired at 54, I’m 61 now and looking forward to getting a raise next year when I start drawing my SS. Am I rich? No. Did I slave away over 60 hours a week most of my life? Yes, but I’m so happy now.😊
Thank you for this very clear explanation. I can’t retire until I’m 70 due to me not starting a retirement fund until it was too late. However my son wants to retire early. I’ve sent this video to him so he could consider the questions you ask after explaining the logic behind the numbers. Thank you for this!
Yep, I don't plan on waiting, all the male members of my family average about 75-76 years before dying. They had vices such a smoking and I have never smoked and try to stay healthy. The HVAC industry exposes me to some not quite healthy things so I figure that's my "vice" My goal is retire at 55 and enjoy more retirement than all my predecessors.
A very timely video. I’m 31, but was doing research on this exact topic today! It was super hilarious to open TH-cam and see your video topic matched up with my research!
It’s actually more complicated than what’s presented in the video because of social security bendpoints. Once you reach the third bendpoint, you receive back so little compared to your earnings that working extra time just for extra social security is not worth it.
Correct me if I am wrong but isn't the first bendpoint between 90% and 32% and the second bendpoint between 32% and 15%. I don't think there is a "third" bendpoint.
@@mikebarnes2294 Yes… 90, 32, 15 so I meant 15% as the “third” bendpoint. My point is that once you reach 15%, it really doesn’t matter if you have zeros in remaining years in your 35 year calculation. Any additional earnings you have beyond that are going to “earn” benefits at such a low rate that you might as well not worry about it if the trade off is enjoying an earlier retirement. This is a crucial point that wasn’t really covered in the video.
@@mikebarnes2294 I was referring to 15% as the “third” bend point. Once you get to that point you are “earning” so little on your contributions that it doesn’t really matter if you end up with some zero-earning years in the 35 year computation regardless of age.
Financially, the benefit of working more would be to keep from spending down your retirement portfolio too early. You'll have to run the numbers to see the effects of when you quit work on your portfolio
@@FIRED13 obviously, the longer you delay spending down your savings/investments, the more of them you’ll have for later. This video however was specifically about social sec and the effects of having no wages for any of the 35 years in the calculation. My point is that if you are already past the 15% bendpoint, working any longer will only increase your benefit by a tiny bit, regardless of how many years of zero earnings you have.
I don't think you should assume that, since the U.S. life expectancy is around 75, that you should expect to die at around age 75. If it's an average, there are a lot of people who die in their 20s, 30s, 40s, etc. from car crashes, drug overdoses, accidents, etc. that bring down the average. Also, some subpopulations in the U.S. die earlier because of less-than-ideal lifestyle factors, like poor diet in the South. Since you are a person sophisticated enough to contemplate the topic of this video, you will probably also contemplate how diet and physical activity level choices will affect your lifespan. Eat healthy, take a brisk walk every day, monitor your blood pressure, and see a doctor every year to check your blood glucose and cholesterol, and you'll probably live way past 75.
If you make it to 70, your life expectancy is much greater than 75. If you make it to 62, your life expectancy is now 81. If you make it to 70, your life expectancy is now 84 (because, think about it-- we are excluding everyone who died before 70 when making the calculation). Just look up an actuarial table. And 81 is about the age where you break even from delaying. Any longer than that and you win big from having delayed.
I’ve been watching retirement savings videos for a year, and this is one I’ve been missing. Excellent research and detail about social security. Thank you!
I'd retiring or working less in 8 years, and considering this financial recession, Im deciding to begin taking up skilled trades. I'm curious to know best how people split their pay, how much of it goes into savings, spendings or investments, I earn around $120K per year but nothing to show for it yet.
You should contribute to your retirement diligently, or better still look into financial planning don't come to youtube for advise, consult a Local or trusted online broker/ planner
Very true, I find myself lucky enough exposed to money management at an early age. Worked full time when I was 19, purchased first home at 28 fast forward time I'm 57 now not laid off
This is huge! would love to grow my reserve regardless of the economy situation, my 407k has lost everything accrued since early 2019, at this point, i'm in need of guidance, can you point me?
GREGORY LEO CATTEL is the licensed FA I work with, I can't speak much about him you should make a search with his name, you'd find the necessary details to schedule an appointment.
Consider drawing early while your quality of life is higher. The time value of money = value of a dollar now is worth more than the value of a dollar 5-8 years from now. Average life span is mid-70s so why not draw for 13 years vs 5-8 years. You need less money the older you get so who cares about as much monthly income after 70?
Recently retired and couldn’t be happier. The job was mentally taking a toll on my heath . Management’s these days are becoming toxic which is making jobs places mentally and physically difficult. I am Grateful that I live under my means and have an amazing pension for life . Now social security I pray if I see 62 🙏🏻. Best advice save save save and live under your means and be debt free . Take care of your self-care because nothing in life is guaranteed. 🙏🏻🥰
Retirees need to do the math to decide when to start taking social security. I looked at what my monthly benefit would be at 62 vs 67. Yes, the benefit increases when you wait, but you also have several years of receiving that lower benefit by not waiting. I tracked total amount received for each one, starting at 62 vs 67, and compared the data on a graph. The two lines didn't cross until age 82, by which time I figured my expenses would be lower. Several ftiends did it too and found pretty much the same thing. That's what made me decide to start drawing at 62. The benefit is indexed to inflatiom, so my purchasing power (technically, anyway) stays the same.
You have to factor in survivor benefits if you have a spouse. The longer you can wait the better. SS is also subject to COLA ‘s. The larger the benefit the larger the annual increase. No one can live off SS benefits at 62. More importantly drawing early limits what you can earn annually until you reach your FRA. Which for many now is 67. Serious health issues are really the only reason to take SS early. If you want to retire at 60, fund retirement with your own resources and wait on SS.
My dad had a favorite uncle who came out west to see a large piece of property my dad and mom had agreed to purchase recently. My dads uncle had just retired at 65 and went back home after his visit. He died 6 months later from cancer. At the point my dad decided he would retire at 55. He and my mom retired at age 56 in 1999 and so far so good. My dad told me this when I was very young and I took it to heart. I am 4 months short of my 56 birthday and anticipate retiring within the next year +/-.
@shawnbrennan7526 I didn't make any inflation assumptions. I simply took the amount SSA said I would get at 62 vs the amount they said I would get at 67 and plotted it our. Came out to just about age 82. Even if it was 78 my statement still holds. My expenses would be lower at 78 than at 62 so it made sense to start drawing at 62.
The amount you get at 62 is 70% of what you’d get at your FRA of 67. (Your FRA is 67, right?) Therefore, the point at which total payments to-date are equal is 77 years 8 months. (200 months at 70% = 140 months at 100%).
Apparently, Google was eavesdropping on my conversations...but this time I don't mind. I have been looking for this information...in this type of format. Thank you. New Sub.
Friendly reminders re: social security: 1) That's your money 2) They did not ask permission to take your money 3) Any asset manager who offered you the returns offered by social security would be immediately fired. Out of a cannon into the sun. Social security takes 12% of your income. In exchange, they give you a bare fraction of what you could do with that money on your own. In my example, (granted I'm pretty young so we just have to estimate), SSA estimates that they'd give me $2,400 per month. For someone living under the 4% rule in retirement, that is about a $720,000 nest egg. If, instead, I took that 12% and managed it myself, it'd likely be closer to $3,000,000. For you 4% rulers out there, that's $10,000 per month. OVER FOUR TIMES what Social Security is going to give me. And since it's *my* money, I can take it out early if I have enough and don't friggin' wanna work anymore. Down with the SSA. Let us manage our own retirements again!
@@martywilliard Yeah. He is a dreamer. You just have to look at the situation when SS was brought into being. The elderly couldn't retire or retired to a harsh life of little to no income. Hopefully with a family member. Far too often it was out on the street selling apples. It was never expected to be a total replacement of your working income but was expected to keep the elderly off the streets. If the trillions that is in the SS trust fund were suddenly invested in the stock market I wonder what the affect would be. I honestly am not sure if it would go through the roof and be incredibly over valued or if the prices would crash. But I seriously doubt that the returns would continue as it has.
Many of us thought the same thing when we were young. Best to think of SS as “life insurance”: it provides some income to live on if you go beyond the average life expectancy. BTW, unless you are self-employed, it’s 6.2% from you and 6.2% from your employer. Let’s not pretend your boss would increase your salary if they didn’t have to pay into it.
@@shawnbrennan7526 Exactly. It is the somewhat inflation adjusted annuity that we "know" is going to be there. That is why they can only invest the trust fund in federal backed bonds. It was considered the safest investment vehicle for guaranteed investments. It is critical to avoid risk and not lose money on something that is guaranteed.
Excellent information! I dread trudging through the government’s websites for what I need to know, but you made it easy and enjoyable to listen to .. Thank you!
Great video Erin. People should try to figure out how to retire early. I’m glad you’re putting out videos that are not of the norm. I wish I had thought the way you do about finances when I was young. Keep up the great work.
I went with buying rental property starting in my late 20's then added several more with the real estate collapse. My work is unrelated to real estate. I work because I enjoy what I do and the interactions I have with my customers. I've been working 10-20 hours a week since my 40s. At 10 hours, it'll exceed anything I may or may not get from SS. Social Security and retirement accounts never factored into my planning, as my income will never really stop.
I never thought about retirement. I just quit working at age 33. Married a retiree at age 35, and he became my retirement. That was a happy marriage and lasted 38 years until he died. Always another way to retire.
@@justinofboulder I added those words to make the quote grammatically correct as an act of charity for the original comment. The change has no effect on the meaning of the phrase. Professional writers would put such changes in brackets to signify a minor modification of phrasing that has no effect on the original author's intention, but I skipped that step because this is a youtube comment and not a Master's thesis. As for the rest of your comment, which has nothing to do with the subject at hand and seems to be more of a poorly placed attempt at self-aggrandizement, I'll pose only one question: If you are so proud of your financial independence, why are you defending someone promoting the exact opposite? The original comment is a perfect example of someone who's financial situation is entirely dependent on someone else.
Wow what a great informative video, easy to understand and I am an early retired CPA. Never knew this as I never expected to get any in the first place😂.
Just turned 50 this year and have always planned on retiring at 55. I have one more year to pay off all of my debt and then 4 years to save for the 7 to 12 years before SSB kick in. I have a pension I'm already collecting on and a 401k just waiting to be drawn from. After watching your video I feel like I'm on the right track to put myself in a good position to achieve my goal. Keep telling myself just 5 more years.
Good video! I recommend considering/discussing the issue of why retiring at 55. A Lot of people die in their 60's, we need to enjoy life while young and healthy. You'll understand as you age, if not already, that death is around the corner and healthy days to enjoy life decline.
Also, want to add that by the time you are in your 70's/80's some people may need care and it may be better financial strategy to enjoy life/spend assets earlier while healthier, then get on Medicaid for final years where you are not able to move around/do much/need to be in managed care situation.
When I was 25, I met with my first financial advisor who went over social security with me. He did the calculations based on my salary at that time and asked me if I could live on that amount of money. It was very eye-opening and motivated me to save/invest at least 10% of my income starting at that age. I just hit 50, and I actually don't include Social Security in my retirement income planning. I'm on track to retire at 58; Social Security will just be icing on the cake.
I plan to retire at the end of 2025 at 62 after 36 years in Telecom as a sales engineer. My wife will retire in May 2026 and she's loving life! But walking away from a good income stream and building the nest egg to living from the nest egg is a scary proposition couple with the alarming recession and CPI report
I feel your pain mate, as a fellow retiree, I'd suggest you look into passive index fund investing and learn some more. For me, I had my share of ups and downs when I first started looking for a consistent passive income so I hired an expert advisor for aid, and following her advice, I poured $90k in value stocks and digital assets, Up to 200k so far and pretty sure I'm ready for whatever comes.
Annette Christine Conte is the licensed advisor I use and i'm just putting this out here because you asked. You can Just search the name. You’d find necessary details to work with to set up an appointment.
Thanks for sharing. I curiously searched for her full name and her website popped up immediately. I looked through her credentials and did my due diligence before contacting her.
When I was 19, I purchased raw land and also purchased a very used travel trailer to live in on my land rather than paying rent to someone. After working construction building custom homes from the ground up for my boss, I designed and built my home debt free all by myself. When I finished building it, I sold it and did the same thing again. After I had sold my second home, I quit my job and continued doing the same thing but keeping them as rental properties. I retired after my tenth rental when I was 31.
That is amazing. Keeping busy with your rentals will keep your mind occupied.
No, you didn't retire: you changed from working for money to now having money work for you. Congratulations..
@@flinch622 Yes, I managed to just get out of the rat race where I could afford to think clearly and plan how to manage that cash flow so that it worked for me rather than me working for it.
Who tf cares
@@jamesphillips9911 😂
I retired at 52, now 56 I'm loving it. Plan, plan, plan ahead for retirement.
52? Too old. I retired at 38. 🤣
I never worked😂
@@nuclearchris832 Hey, you will still get something. lol
@@nuclearchris832 you screwed the government LOL
are you receiving SSN at 52?
When my mother hit 65, she pushed her retirement to 67. At 66, she was diagnosed with ovarian cancer. She only benefited 6 months from her SS after she retired, and she passed away. RIP Mama.❤ Hopefully, this will be a reflection and lesson for us.
Sorry for your loss.
Sorry to hear, but I'm sure there are plenty of stories of people who took it early only to live well into their 90s and really needing the extra money.
So sorry, such a sad outcome. Same thing happened to my mother. Retired at 62, sick at 63, and dead at 66. She only enjoyed one year of life not being a wage slave. My advisor keeps pushing me towards an investing model where I live to 94, per the actuarial tables given my age (apparently). I have no faith I'll live to that age. My goal is to have a solid decade of enjoyable non-working years. If I run out of money, I'll do it when I can't do anything anyway. Even at that, I feel I'm solidly conservative with my strategy planning on an age of death somewhere around the mid 80s. But, I'm not risking working too long. As far as I know, we only have this one life and I refuse to waste it making others rich.
Sorry to hear that, my mother was in a similar situation, she had breast cancer so she had to retire and received 1 check from SS before she passed.
You can’t retire with ss at age 55 - waisted words and time
Done! Retired at 55.
Nice!
Very lucky good for you
Congrats!
Ok, I’ll retire at 53
Retired at 45 but it’s boring. So I’m working again
My wife and I both retired at 55, about 10 years ago. Every point you brought up is valid and something we had to deal with but we were able to make it work. What saved is was ACA for health insurance, 72T withdrawals from our IRA's to fund 7 years of living, and then claiming Social security at 62. Low bills and no car payments or credit card debt helped a lot! Thanks for a great video Erin!
🙏🙏🤘🤘
Congrats!
YOU should make a video on that! 👍🏽
Especially the ACA / healthcare part; that’s one of my major mental hurdles to finally walking away.
We're doing the same thing next year, utilizing the rule of 55. Healthcare-wise, we're going with Farm Bureau Insurance and choosing their $1500 deductible plan that includes all preventative medicine, dental and vision. Right now, it looks like we'll be paying roughly $930/month for the both of us.
But at 55. U retired because. U had money correct ? Because the social security won’t give u nothing at that age ?
I've had type 1 diabetes since age 11. I'll be lucky to even live to 62. Retirement by 55 has been my goal since I was a teenager. The best thing my parents taught me young was putting money aside for when I'm old. I'm 42 now. And self funding my retirement through Roth IRA s, my workplace 401k, etc .. over the past 20+ years will enable me to reach my retirement at 55 goals. If I make it to 62, Social Security will be a nice little bonus, but I'll be damned if I'm going to sit here and rot in a work chair a few more years for what will be an insignificant couple grand a year from social security. Life's too short, especially for me.
My brother-in-law is Type 1 since age 10, and he is still going strong at 62 now. You should plan on being around more than ya think...
I know how you feel. My dad died of cancer at 57. We both suffer from the same affliction that caused it (acid reflux - esophageal cancer), so I'm definitely not waiting until I'm 62 to retire.
I have known of a number of diabetics who came down with diabetes in childhood and lived to be old. Neil Young the Canadian folk singer is one of them. He had onset in early childhood and is now 78 years old. A farmer I know is in his late 70s and he came down with diabetes about age 13. My own son had onset of type 1 Diabetes at age 7 months and he controlled his diabetes very well with a pump and frequent checking. But unfortunately he died in his sleep from unknown causes last year at age 42. He had an engineering degree and wonderful career going.
My mom got type 1 diabetes at 12:00 and she lived to be 79 age is just a number stay healthy and your number will be much larger than you think it will be today😊
@@prairiemark4084 I'm sorry your son died at age 42. I'm 47 with health problems myself. I'm trying to hold on as long as I can to get SS at age 62
Retired at 38. 21.years in the Army. Been retired for about 10 years now. Enlisting was one of the best moves I have made in my lifetime. Be blessed
I also retired from the Army. Sadly, 20 year retirement is no longer available to Soldiers enlisting now. They have some crappy Thrift Savings Plan.
@@Maryland_Kulaknot exactly accurate. They have a reduced pension for doing 20 years and the TSP. This extra is matched and if they don’t retire, they walk away with something portable. Even if they only accumulate 5 years. I am a beneficiary of that pension and the TSP. They both provide 2 buckets of income.
You have been living solely off your 21 year pension for the past 10 years? Or are you like most military retirees and working full time in another career or job?
@@Dave-sw2dm happy holidays..I get disability and my retirement. I was under the old rule. I retired as an E8. I receive 50 percent of my base pay and military disability. I also stay in El Paso Texas. I am from Virginia but the cost of living is significantly lower
@@rdoswell I am under the old rules. I receive 50 percent of my base pay (E8) and to be honest I receive military disability
I’ll be retiring at age 55. What’s not talked about is the quality of life retiring as early as possible. I want to enjoy life while I still have my health versus 62+. You can alway make more money but you can’t make more time. My personal philosophy, that’s why I financially plan for my retirement early.
Health Span vs Health Span (thank you Azul Wells, TH-camr, for this very important concept)
Yup, my dad passed at 59 and my mom had dementia at 63.
Looks like I might retire at 56. I agree 100% with what you are saying. Where there is a will there is a way, everyday spent working is one less day living life to its fullest. There's no guarantee that you can travel and do some of the things you want to do at 62, 65 or 67. I'd rather live life for the next 10 years and then if need be go back and do some little job for some extra income in my late 60s knowing that I've lived life, then make more money not knowing if I will be able to live life.
The average American lives to be 76.33 years. The average American male only lives 74.8 years. That doesn’t tell you when people start having health issues and a reduced quality of life. If you start receiving social security at 70 you will need to live until you’re 78 to collect the same money as you would have if you retired at 62. If you retire at 67 you’d have to live until you’re 76-77 for benefits to even out. If you know for a fact that you’ll be healthy and live well into your 80s or 90s then waiting is the smart move. Unfortunately, most of us don’t know that.
Yes, I jumped off the back of a utility truck for 30 years not sitting at a desk somewhere, the body can’t do that forever so I saved and invested retired at 53 1/2.
Wife retired at 53, 2 months before her 54th birthday and I was able to retire at 57.
9 months down for me and not looking back.
What kind insurance u have
@@MrDonny27 expensive... I bet
Insurance isn't bad. Certainly less than your mortgage if you can finish up around the same time as you pick up healthcare.
@@PeteQuad good point..
We are claiming early at 62. No one know how long they will live and we want to spend while we are healthy and let the investments grow with fewer withdrawals
I hope you both have a long and healthy retirement
I think it's worth a video on the tradeoff of taking it early vs. keeping your money invested. There has to be a certain rate of return where it would make sense to take SS early. It's going to be a complex table once you factor in how long you live.
@@MrPizzaman09 Hi, I agree that such a video would be generally worthwhile. In my specific situation, I don't care if my investment returns beat social security growth or not. We have enough and my goal is not to maximize my estate, it is to live now.
Who in thier right mind trusts the govt with money?
@@johnfitbyfaithnet And as Gen X we have to consider those funds are going to run out. Right now I don't see the political will to fix this. I have a bad feeling it won't get fixed and the benefits will just go down by around 30%.
I only have 24 years of SS income but retired at 52, not a moment too soon. I plan on taking SS at 70 as I considered it more like "longevity insurance". I have done well enough with my investments that I won't need the money. Working longer would just be a waste of the precious time I have left to live. I am now focusing on extending my life with a healthy lifestyle and just enjoying doing whatever I want to do. I love owning my time.
Longevity insurance....I like this way of thinking.
Just make sure you understand that it’ll take a long time to recoup lost SS income, especially had you invested that SSnduring the eight years you didn’t collect. The average American loses physical freedom before 70 so quality of life should be factored in as well.
@@greghelton4668 Exactly. The money left on the table while waiting to collect at 70 takes almost to 80 to recoup without investment earnings. THEN you start to come out ahead. It really does not make sense, but to each his own.
@@greghelton4668- bird in yand for us
i will just wait until 70 unless for some reason i can't..but with my plans i hopefully won't need it until then or at all. an insurance policy i can take anytime after 62
As an investment advisor that’s been specializing in Social Security planning for more than a decade. You did a great job covering the topic!
Of all the SS videos I have watched this was the one that made it simple to understand. Well done Erin.
Yes! That makes me so happy to hear! 😊
I completely agree with you.
When I was 25, I met with my first financial advisor who went over social security with me. He did the calculations based on my salary at that time and asked me if I could live on that amount of money. It was very eye-opening and motivated me to save/invest at least 10% of my income starting at that age. I just hit 50, and I actually don't include Social Security in my retirement income planning. I'm on track to retire at 58; Social Security will just be icing on the cake.
That’s exactly what I did, we are unicorns
I retired from SSA after 20 years 1/2 of which I spent at the National 800 number. I watched thinking there’d be a lot to criticize. Nope. That is one of the best explanations of the impact of early retirement I’ve seen anywhere (including the explanation we were given). I was so wrong. Beautiful, exceptional job. SSA could incorporate this straight into their training program. Well done.
Do you go looking for videos to criticize when you wake up? That’s just sad .
@@jayp8955 what did you just do?
@@jayp8955 and look what you just did. Pot calls the kettle black.
@@jayp8955 Do you go looking for comments to criticize? How sad! You can’t seem to infer the op’s intent. Also SAD!
@@jillmiller9268 i guess that makes both of us sad human beings. Enjoy your retirement.
Love the bloopers. Your videos are always very well thought out. As someone that retired at 52 (self funded) it’s always nice to see your POVs. You present real information and not over the top sensationalism that many vlogs do. My wife and I had looked at all the zeros we were getting but decided it was okay. But it is important if you are going to be living off SS. Always look forward to your videos
Thank you so much! Congrats to both you and your wife on your early retirement! I hope you are having a wonderful time together
This is seriously the best, most informative explanation of how SS works that I have ever experienced anywhere on any media. Well done Erin!
I retired at 45, now 55. I worked in finance for over 2 decades and the stress of that environment and the large corporate culture is poisonous. I have friends that have had heart attacks in their early 50's and have major health problems that still are in that rat race. Your life and health isn't worth it for what? A few million more dollars that you aren't likely to enjoy in your old age. I earned enough to live comfortably off my investments for the rest of my life and that was enough for me. I'm glad I made that decision and I enjoy every day now.
Thats awesome ..can you offer an idea of what kind of investments?
@@LibertarianRF I own 6,000 shares of SMCI I just bought on Friday @ $40 per share. It popped 15% yesterday alone. My price target on it is $130 per share. It has had a lot of bad news and is a risky stock (which gives you a great opportunity to make a lot of money if things don't turn out as bad as the news appears to be). I also own about 34,000 shares of PDI that I've been drip investing for the past few years with an average price of $17.50 per share. PDI pays a $0.2205 per share dividend every month. It is hitting record highs right now because the Fed is dropping interest rates. It goes ex-dividend on Friday. PDI is a no brainer investment at this point. I'll probably add another 10,000 shares+ in the coming year.
I also retired at 45 from business. I purchased a few office buildings and hired a mgmt company. So far it's been a great passive income to go with my dividend stocks. I agree, why swim in the poison pool for money that isn't likely going to change anything.
@@LibertarianRFif your poor then invest in a business and grow it. 100% that money because you work it. When you have the money invest in VOO, BTC, Real astate. 15% that money... it's easy after that.
Start SS at 62 ... I've seen multiple family members hold out for the full benefit and die shortly after, missing out on so much money that could have been used to pay off mortgages and leave the estate in a much better place.
There's also those that retired at 62 and ran out of money because they lived longer than they thought they would. The 401k ran out at 80 years old in 1 example.
If your genetics and lifestyle don't favor a long life, agree.
Retirement is personal decision and it’s different for each of us. For me, I had initially planned to retire at my FRA of 66 and 10 months. However at 65, I hit the wall and it caused me to reevaluate my situation. After crunching the numbers I came to the conclusion that whatever the financial gain of working an extra 18 months wasn’t worth it and retired right after I turned 65. A decision I’ve never regretted.
I hope you’re having a wonderful retirement!
I’m three months in, so far so good! I spent 35 years in healthcare work at the same hospital. It was hard to let go. That drive home on the last day was emotional. However, the next day I was fine. It was surprising how easily the transition was….
@thomasmoshier3920, Well really it is not! That is why hard numbers like 59.5/62/65/67 have meaning as well as RMD. Sorry , but all of us will have to fit into 1 of those hard numbers. The exception is: One has a few million put back and then they do not care about SS or age
Actually I do have 2 million in my 403b. I also have a significant pension. I chose to retire at 65. Having financial security gives you options. Drawing SS early limits your options unless you have a large 401k balance. Most that retire at 62 do not. They use the excuse to draw at 62 because they convince themselves they’ll die early or SS will go broke. Weak arguments.
@@thomasmoshier3920 The argument is people did not save enough and linger around too long in the work force preventing younger workers from taking their place all because of their piss poor planning. They always think, if I can just make it till....X date, I will have enough. Sadly that day usually never comes.
A couple of my thoughts. I stopped having fun at work after about 37 years.
1.nAfter gritting my teeth for another year, I found that replacing low earning years with high earning years was increasing monthly payout by $15/month.
2. Studies of satisfaction vs income show plateauing after $70,000/year (without attention to renting vs mortgage, vs paid off).
3. My mom's fatal heart attack at 55 and dad's early onset Alzheimer's needed consideration.
4. Retirement is wonderful.
lol, i did the same calculation and if i kept working a few more years i could make an extra $60 a month. A job that gives me more stress than i can deal with is not worth a cheap dinner eating out. I so need to retire by 54.
Great video, Erin. This old dog learned something new. Didn't know about the 35 year average. I'm 54 and considering pulling the plug between 55 and 58. Part of my decision will be based on indulging in a big purchase that is strictly a want. Knocking off my 3 lowest earnings years in the process is tipping the scales towards 58.
Glad it was helpful!
Retired at 54. When I turned 30 I started to make this goal a reality. Purchased stocks and added to saving to get us financially stable to 62. Cashed in 401K without penalty. House paid for and no credit card debt. Now 69 and have purchased 2 new vehicles during this time. Wife and I have Travel to Europe 3 times and camped in all 50 states. The more you make the more you spend, the key is living within your needs.
My dad retired at 55 becuz he was a school teacher so he got nice pension n full bennies plus then his SS kicked in at 65
He had investments also but his monthly base was pension & SS
Pretty sweet
He bought a house and pd it off in 10yrs all on that monthly income. Never carried debt beyond his houses and at first, his cars. Then he switched to used late models n pd cash, in the late 80s or so.
Glad he quit at 55, by 65, his dementia was active and by early 70s he couldn’t live alone. So he got to enjoy that decade that usual-age retirees have before decline in old age to die in their late 80s. Cruises, winters playing golf near the beach, lotsa golf…
I actually did retire at 55 in 2011. I was able to receive a work pension at 55 and I remained in my work health benefits system. I started receiving my Social Security benefits at 62. I’m guessing I had between 30-35 years of Social Security contributions. As for monetary opportunity costs, you should consider the value in quality of life for retiring when you are younger and healthy. Experiences can be more valuable than money.
In my case I am getting a generous pension from a 30 engineering career. That work pension gets annual cost of living increases. Social Security is 25% of my total income. I am living in Thailand where my cost of living is lower. I also declined paying for Medicare Part B which saves me about $170/mo. Thirteen years later I have no regrets about these choices.
How is your Thailand experience? I am learning more and more Americans retire in Asian countries.
@@kablah777 The major destinations are Thailand and the Philippines. There are many TH-cam videos comparing the two countries for expats. Whatever country you are considering you want to visit there first.
The country with the most expats is Mexico. Central America and Eastern Europe are other retirement hot spots and locations with a lower cost of living.
Super curious what someone in your profession with that many years gets in pension. If you don't want to share, I get it. Also, curious what your SS is as well. Mine is $2200 at 62.
@@dawndarling2277 Yeah . . . I won’t share but I was a mid level engineering manager at the University of California in 2011. So after 30 years my salary was the average of our region. Retiring early at 55 I got a good fraction of that.
@@martypoll I work for the state so my salary/dept/position has been online for all of my state career. It's probably different depending on where you retire but my pension is $5546 a month. Trying to determine whether I should get SS now or wait.
I retired at….you guessed it, 55. I am so happy we did. Barring some tragedy my early retirement has without a doubt added years to my life. We bought a small farm and working outside keeping the farm going has done wonders for my mental and physical health. I will begin looking at SS around age 67 but if things remain as they are today I will be waiting until 70 as the former primary wage earner. My wife began her SS this year at age 62 with much joy.
Thanks for the video.
Thank you for posting this! I'm 52, but my company is reducing staff and I highly doubt retirement going to be on my terms. So it's good information to have.
Glad it was helpful!
I retired at 40. I made sure I did not have to depend on social security. Time is your most valuable asset.
I retired at 49. The only thing I regret is not retiring at 39!
I retired at 54. I considered working longer, but found that working longer for the purpose of increasing your social security benefits has very diminishing returns when your average indexed monthly earnings is already higher than the 2nd bend point. The higher you are, the less impact working longer will have.
Yeah this is where I'm at. I've maxed SS for many years but I also have some zeroes in my social security calculation. But if I work longer to erase those zeroes all those dollars are beyond the second bend point.
That 2nd bend point is one of the best demotivational tools ever invented 😊
@@mikespangler98 Yeah what is it 15 cents on the dollar?
@@semosancus5506 Exactly 15%. So if you made $100,000 and that years income replaced a zero then your monthly benefit would be 100,000 / 35 / 12 * 15% or $36 a month higher. If it's replacing something other than zero then replace the 100,000 with the difference.
Thanks for the comment. It helps in my decision process.
Wife and I retired in 2021 at 52 and have been loving every minute of it!
I retire at 55 and are among the top 1% earners when i retire. A few years before my retirement, I figured out social security is NOT pension(i won't call it scam like a lot of financial TH-camrs do). It is supplemental income. Its main goal is to provide minimum level of income for middle class especially low income earners at the retirement age.
If you have maximum earnings in the last 25 to 30years, working another 10 years is not going to change much on your full retirement benefit. The last 10 years contribution goes to the pool. You won't see much of the contribution coming back to you.
The average life span of american is about 78 years. If you retire at 67 or older, you do not have time to enjoy life. Try to be debt free before 45 and financial independent before 55. I paid for my own college and have zero student loan. Try to live frugally when you are young and avoid expensive hobby and vacation.
@@EYUK1 You didn't mention a residence that is paid in full before you quit working. Not having rent, or a mortgage, is key to a decent retirement.
I retired at 53. I did the math and working the full 35 years, another 3 years of max earnings rather than 0, would have added $20/month - about 0.5%. I suggest doing the actual math, as the example of losing 11% by retiring 5 years early can be quite misleading.
@@rdspam I don't know when you retired.. each year of zero earnings you are missing SS calc currently would be -> ( max contributable earning/420) *(0.15).. if you assume max contributable earning is 160K.. that would be 57$ per month
Most people don’t decide to retire at 55 when it’s related to SS.
Most continue to work despite not really earning much more from SS due to the cost of medical insurance. And it’s not just for them but spouse and even kids.
Some parents have kids in their late 30’s and the male can be well over 40. Imagine having a 15 year old at the age of 55. That’s what quite a few face.
The working world has changed and many have no issues working beyond 55. Better to be a productive member of society than a leach.
Living till old is overrated.
Great information and nicely done. I retired at 58. Fortunately I have a pension and had good guidance along the way to save. I did have some questions about how retiring at 58 was going to affect my Social Security. This video answered all of the questions that I had. Thank you! I also think it is great that you have the confidence to be able to laugh at yourself with the outtakes at the end. Funny!
Great job clarifying a difficult subject! It truly is an individual decision as to when to begin collecting SS.
Thanks so much for watching!
Great details in your video... One thing to remember though, it often makes no sense to work longer once you already have your 35 years in. Although you may be making more in your current (older) years than you were in your younger years, the difference has to be SIGNIFICANT not only because of the indexing, but also the bend points that Social Security uses. If you have zeros, by all means, try to keep working and fill those in. Zeros are BAD. But if you have a modest $20,000 per year salary from your first few years of employment, and now you are "replacing" those years with $100,000 years, the difference of what looks to be $80,000, over the course of 35 years, indexed, and then using bend points, only make a FEW DOLLARS difference on your Social Security checks.
For some people, Time is much more valuable than money. Learn to do your precise calculations before you make your decisions to continue to work just to try to increase your social security check.
As she mentioned, the multipliers used on the a Averaged Indexed Monthly Earnings play a huge role as well. There are three tiers. The first portion is multiplied by 90%, then it goes to 32%, then to 15%. Once you've made enough money so that you are in the 15% multiplier then it becomes difficult to make a significant increase in your social security benefit.
This is really, really helpful. My wife and I are considering when to retire starting at 55 and did not consider this aspect.
Thank you!
Glad it was helpful!
Social security benefits for seniors are an essential safety net for many, but it's also crucial to plan ahead and invest wisely for your retirement. Diversifying your investments across can help build wealth over time. It's never too early to start saving and investing for a comfortable retirement. I’m 63 and my husband 65 we are both retired with over $3 million in net worth and no debts. Currently living smart and frugal with our money. Saving and investing lifestyle made it possible for us this early even till now we earn monthly through passive income.
Alright phyllis, speaking in general terms, investing requires a good amount of knowledge. That's why it's essential to have a solid support system like a financial counselor, especially when picking out assets. I've been working with Laura Grace Abels , who is an investment advisor at a registered wealth management company. I can't recommend her enough; my financial journey has been fantastic thanks to her. She's quite well-known for her services, and she helped me achieve financial stability through investments. Now, I benefit from her passive income strategies every month. So, I'd strongly suggest finding a reliable investment advisor for yourself ..
Laura Grace Abels is based in the United States and can work with anybody wherever they stay. If you would like more information about her, you can conduct a search online.
Personally, I'm blessed and realizing I'm not the only one working with Laura Grace Abels . I will consider myself lucky. I've been able to feed and make a living through her service and great work. For such a person as Laura, I owe her gratitude, support and endless prayers as it is not easy to gain access to such a competent and reliable adviser. Who isn't just wise but has all it takes to handle an investment and is good at what she does..
Thanks buddy.I have had the intentions of starting investing. But I always thought it was late and I think I need to stop procrastinating. I will definitely
I was worried until you got to the wage indexing part, but somehow you covered everything in 11 minutes. The SS calculation is actually fairly straightforward (albeit with many steps) and you can make an excel spreadsheet to calculate what you might receive. Of course since the taxable maximum and indexing factor/multiplying factors for previous years change every year, and you don't know your exact future earnings, it's more of an estimate than an exact projection.
Great video! My target is around 58 🙌🏼🙌🏼. 13 years to go! Been maxing my HSA every year with a goal of having $100k in there for health insurance by 58!
I retired at 58. I was in a line of work my whole life that demanded ridiculous hours and it was difficult to actually use vacation time. So I wanted out to go catch up on living before I was dead. What helped that choice was that I already had 34 years over the max income that SSA uses in the benefit calculation. My 35th highest year was close enough to max to not change the calculation enough to make getting one more year over max worth the wait.
I share my example just to encourage others to do the math on your own situation. I had several colleagues who were making their decisions based on hearsay and general recommendations by “experts”. DO THE MATH FOR YOUR SPECIFIC DATA.
Everything you said rings true. In 2019 @ 55.5 yrs old, I was laid off in a large wave of continuous layoffs after 32 yrs, so I have a couple of zero years. However, I was always a super saver. Initialy i was thinking of working again, but it ended up not happening. It seems difficult finding a 'career' type job in your 50's, over time it just wasnt appealing to me anymore either. I was labeled a 'retiree' so have subsidized health care until age 65. In 2023 I turned 59.5 and started IRA withdrawals. I'm doing okay and things should be fine delaying SocSec possibly til age 70 but at least 67.
Yeah some people are forced into retirement in their 50's. High paying companies are more likely to jettison older employees for less expensive new grads.
Erin, my b/f's father retired at 48. He had lifetime heath insurance as well as a pension. Combined that with his investments and SS, he was making more than he did while working! Some people hit the jackpot.
To be truthful, didnt watch any of the video but the title caught my eye. I retired at 56 comming up on nine years ago and if you retire at 55 you got your act together, your not in need of social security. I know at some point I'll collect but i never banked on needing it. Work hard, plan ahead, and retire early.
On a secondary note after watching the bloopers: your hair looks great! That thought crossed my mind during the video, but it felt necessary to share after watching the end…😂
😂😂😂
I had to come and say the same. I know this is a finance channel so looks are not the focus, but the hair was really working today!
Build credibility in a variety of ways. The hair looks like success and credibility. Keep it up.
Well done! Your mention of opportunity cost is spot on. It's not just about the extra years of work, but also about the potential cost of delaying Social Security benefits.
Most estimates suggest that the breakeven point for maximizing lifetime benefits is in the late 70s. However, this calculation often overlooks the opportunity cost of delaying. If one were to pass away before reaching that breakeven point, the return on waiting would be zero. Even living to 85 would yield a meager 5% return on the decision to delay.
While living to 100 could result in a higher return (potentially in the high 8% range), it's important to consider long-term investment returns. A well-diversified investment portfolio can easily outperform this rate over a 45-year retirement.
Therefore, my perspective is to claim Social Security as soon as possible so that you can keep more of your own money invested. If the SS program remains solvent, potential gains from delaying disappear if your own investment returns exceed 5%-8.75% depending upon life expectancy (85 vs 100). Even if you assume conservative returns of 5%, the potential gains do not significantly outweight longevity risk and cost of spending your own money for 8 years from 62-70 by delaying.
I retired at 55. I was fortunate to be in a high paying job for many years, but with high income usually you have high stress. And stress kills. By 48 I was on ALL the stress meds. High blood pressure, cholesterol, you name it. At 49 I decided to take a year off and quit that job. I spent the time exercising and pursuing hobbies and was off the stress meds within the year. So I went back to work doing the same thing at another high paying, high stress job. At 54 I had to make the decision to go back on stress meds or call it a career. I decided to call it a career. Again, I was very fortunate that I was in a financial position to take a year off work and to retire early. But don't neglect the health risks of working longer. They are very real. If I continued working, there was a very real possibility that I wouldn't be here today.
I HIGHLY RECOMMEND “GRADUAL RETIREMENT”‼️ Or “incremental retirement”. I “retired” from my 35-year IT career in 2023 at age 57. I had gradually built a TH-cam channel to supplement my income and eventually it far surpassed my full-time job. Now I’m self-employed and working part time. I’m not FULLY retired, but it gives me a good 15 hours of work a week and builds my top earning years for SS until I decide to claim it. Being your own boss is so awesome, and I’m super blessed to have this opportunity. 👌🏼
I’ve been planning my retirement since I was 23, I am retiring at 55 next year. 32 years at my career has been loooong enough… see ya all in Arizona
I retired at 55 and love it, currently in AZ and loving it.
Thank you for this super informational video. It was very well explained. I never really knew how the SS calculations work until now. Aside from your great content on SS, I must say my absolute favorite part of your video hands down was the last few seconds of out takes. Love it. Thank you!
Great explanation on the effect of SS benefits on early retirees.
One major factor that was missed from this video are SS bending points.
The short version of it is that at $150k income the effect of working longer (35 years vs 30) is much smaller than at $50k(used in the video)
Do the math and you will see that 35 vs 30 makes little difference for someone making $150k
Interesting. I'd like to hear more about this.
It's incidental, I am happy to go to 60... it works well for me.
I don't know how to do the math, can you provide an example for this scenario?
@@adabamasThe second bend point is around $7,000 Say you work and your AIME goes from around $7,000 to $7,400 you only get 15% or $60 a month more in your check.
You’ve convinced me to retire at 55. Thank you. I have a lot more Hope now.
Retired last year at 55. I will claim Social Security at 62, it would take 17 years to break even if I wait until 67. The Social Security website has a calculator where you can enter the years with zero as your reported earnings to figure out how it changes your benefit. Retire as soon as you can, best year of my life, busy doing what I want to do.
Yep - ad when you funnel the numbers around it may add a few bucks to the end .. not worth the stress of another ear to get $5 bucks ! I play with that tool a lot each year .. Keep saving!
Am 58 retiring next year but the thought of retirement gives me weakness. My apologies to everyone who have retired and filing social security during this time after putting in all those years of work just to lose everything to a problem you never imagined to happen. It’s so difficult for people who are retired and have no savings or loved ones to fall back on.
I retired at 51 after a 30 year career with a pension and healthy TSP. Part of my pension is supplemental social security. I’m having a blast!
@@slicksmith856 yes but then Social Security kicks in if I elect to take it at that age and I will.
@@slicksmith856 I was a Federal Agent for 30 years and retired early. I’m currently 58 and will draw at 62. SS Administration tells me that I will receive $2,500 a month at 62 and $3,500 a month if I wait until 67. I put a pencil to it and I come out ahead in the life expectancy column if I draw at 62. My goal now is to live to 62. Enjoy retirement my friend.
No way! I bet you were a Rural Carrier with the USPS lol (yeah I read the rural forum)
@@markbd9775 Border Patrol.
Love your so clear accent and beautiful pronunciation.
The end bloopers are great!
Nice video - It prompted me to go login and look at my earnings record. Definitely some good information that will help with my future retirement planning.
I’m so glad! That’s awesome!
I retired at 33 years old I am 37 years old now. My full retirement on SSI is 70 years old. Retired as soon as possible there is no guarantee people going to live until 65 years old.
SSI is a federal welfare program for the aged, blind, and disabled. It has nothing to do with social security.
My wife and I plan to retire using the rule of 55 and were curious how this would affect our future social security benefit. This video was super helpful. It's also helpful to go to SSA.GOV, log in to your account, and play with the calculator. We did and were able to determine the estimated social security benefits if we stoped working at 55 and began drawing social security when we became eligible at age 62 all the way up to age 70.
Hi Erin, great video! Very informative! And btw, you’re looking gorgeous this morning. Love how you went into detail about social security. And love your outtakes! 😊 Hope you have a blessed weekend 😊
Thanks Mark! I hope you have a wonderful weekend! 😊
Excellent video. It would have saved me quite a bit of research if I had seen it two or three years ago when I first started researching this. I took six years out of the workforce when I retired from the US Air Force at age 43. I have worked both part and full-time over the past 8 1/2 years and I believe 2024 will be the 35th year on my Social Security earnings record, but four of those years have almost no income, so I’m planning to work until age 62 so in four more years from today I will have knocked out the four years of very low income with four years of reasonable income. I also enjoy it greatly what I do so that’s probably the main reason to be honest. However, since it’s quite physical, I figure age 62 is a good time to probably do something different. With my Air Force pension, some rental property, some other investments, plus Social Security at age 62, I have no worries. If my body gives up on work before age 62, so be it. 😊
i retired at 55 3 yrs ago. being an immigrant, i only have 25 yrs contributing to SS. apart from the first year 1997 where i was short of the max by about 3K, everything else maxed the SS limit. at least the missing years are the newer years rather than first yrs of the 35 yr period. amazingly it is still a good amount if taken at FRA.
the biggest fixed cost , of course, is private health insurance. i have hdhp and fully contributing to a family HSA/$9300, and paying medical costs out of pocket so i am still saving in retirement.
i am living off my taxable brokerage as i leave my retirement plans untouched for now. my marginal rates are filled by roth conversions and my living expenses( from the taxable brokerage) are taxed at 15-18.8%.
I'll start tapping my tax deferred at 63 or so (stopping roth conversions then or markedly reducing it) at the lower brackets and then let the taxable take up the slack.
a healthy taxable brokerage is key for my situation.
Thank you so much for sharing your lived experiences!
Very clear explanation of how SS. 35 years of your highest earning years is one of the most important points. And I learned about taking ss at 62 and how it's calculated. Thanks for the info!!
I've done nothing smart and always accepted people not paying me what I'm worth I squandered money and now I have 3 years to 55 but no way to retire ever.
If you're young and reading this and nobody told you the importance of what to do, start saving today.
You don't want to face this level of uncertainty
We are the same age, and in the same boat. Sounds like you had a lot of fun and good experiences, and that is not worthless. I don't think I could ever retire from working, and if you turn the facet around a little bit, that's a good thing.
Let's just stay healthy, that is the best asset for a lot of people.
@@SongSydney very inspiring and thoughtful reply, thank you.
@@MindsEyeVisualGuitarMethods Water fast regularly, and break your fast with a juice fast. You will never have any disease and have lots of energy.
You are THE best in explaining retirement.
I’ve been working since 14. I didn’t work during age 15, but worked every single year from 16 to now. Next year I plan to retire at 55 and nothing or no one’s gonna stop me.
Hell yea.
Stay healthy and enjoy!
This is a very nice overview of Social Security and how it works. Thanks.
Glad it was helpful!
From the time I was 18 I planned on retiring at 55 but instead I retired at 54, I’m 61 now and looking forward to getting a raise next year when I start drawing my SS. Am I rich? No. Did I slave away over 60 hours a week most of my life? Yes, but I’m so happy now.😊
Sorry your plan didn't work out! 😂
Thank you for this very clear explanation. I can’t retire until I’m 70 due to me not starting a retirement fund until it was too late.
However my son wants to retire early. I’ve sent this video to him so he could consider the questions you ask after explaining the logic behind the numbers. Thank you for this!
Thank you so much!! 😊
Im 48 and I want to retire tomorrow.
I love the bloopers … shows we are human. Great content.
They count on you dying before full retirement age. No benefit to wait in my opinion
That’s why I’m hoping to disappoint them! 😂😂😂 Stay healthy and collect at 70!
Yep, I don't plan on waiting, all the male members of my family average about 75-76 years before dying. They had vices such a smoking and I have never smoked and try to stay healthy. The HVAC industry exposes me to some not quite healthy things so I figure that's my "vice" My goal is retire at 55 and enjoy more retirement than all my predecessors.
A very timely video. I’m 31, but was doing research on this exact topic today! It was super hilarious to open TH-cam and see your video topic matched up with my research!
That’s so awesome!
Google knows all!
Work hard, invest and over time you will not regret it!
Most people that retire at 55, Don't really worry about social security at all, social security is just going to be extra money
This was a great video to explain how Social Security benefits are calculated. The best I’ve ever seen. Thank you making this.
Thank you so much! 🙏
Great content and well produced video.
Thanks for watching
Great video. Excellent explanation! You made very clear and concise. Thank you!
It’s actually more complicated than what’s presented in the video because of social security bendpoints. Once you reach the third bendpoint, you receive back so little compared to your earnings that working extra time just for extra social security is not worth it.
Correct me if I am wrong but isn't the first bendpoint between 90% and 32% and the second bendpoint between 32% and 15%. I don't think there is a "third" bendpoint.
@@mikebarnes2294 Yes… 90, 32, 15 so I meant 15% as the “third” bendpoint. My point is that once you reach 15%, it really doesn’t matter if you have zeros in remaining years in your 35 year calculation. Any additional earnings you have beyond that are going to “earn” benefits at such a low rate that you might as well not worry about it if the trade off is enjoying an earlier retirement. This is a crucial point that wasn’t really covered in the video.
@@mikebarnes2294 I was referring to 15% as the “third” bend point. Once you get to that point you are “earning” so little on your contributions that it doesn’t really matter if you end up with some zero-earning years in the 35 year computation regardless of age.
Financially, the benefit of working more would be to keep from spending down your retirement portfolio too early. You'll have to run the numbers to see the effects of when you quit work on your portfolio
@@FIRED13 obviously, the longer you delay spending down your savings/investments, the more of them you’ll have for later. This video however was specifically about social sec and the effects of having no wages for any of the 35 years in the calculation. My point is that if you are already past the 15% bendpoint, working any longer will only increase your benefit by a tiny bit, regardless of how many years of zero earnings you have.
Yep that's my game plan retired at 55 and enjoy my family and grandkids🙏
I still have no idea why someone would wait until 70 to retire when your life expectancy in the US is around 75
I don't think you should assume that, since the U.S. life expectancy is around 75, that you should expect to die at around age 75. If it's an average, there are a lot of people who die in their 20s, 30s, 40s, etc. from car crashes, drug overdoses, accidents, etc. that bring down the average. Also, some subpopulations in the U.S. die earlier because of less-than-ideal lifestyle factors, like poor diet in the South. Since you are a person sophisticated enough to contemplate the topic of this video, you will probably also contemplate how diet and physical activity level choices will affect your lifespan. Eat healthy, take a brisk walk every day, monitor your blood pressure, and see a doctor every year to check your blood glucose and cholesterol, and you'll probably live way past 75.
@@mikeg9b “Probably” is the key word.
Possibly Survivors benefits
If you make it to 70, your life expectancy is much greater than 75. If you make it to 62, your life expectancy is now 81. If you make it to 70, your life expectancy is now 84 (because, think about it-- we are excluding everyone who died before 70 when making the calculation). Just look up an actuarial table. And 81 is about the age where you break even from delaying. Any longer than that and you win big from having delayed.
@@lpslpslpslpslpslps once again “If”. So give up 8 good years of your prime to “possibly” live past 70 and “have a good chance” of living much longer.
I’ve been watching retirement savings videos for a year, and this is one I’ve been missing. Excellent research and detail about social security. Thank you!
Glad you enjoyed it! 😊
I'd retiring or working less in 8 years, and considering this financial recession, Im deciding to begin taking up skilled trades. I'm curious to know best how people split their pay, how much of it goes into savings, spendings or investments, I earn around $120K per year but nothing to show for it yet.
You should contribute to your retirement diligently, or better still look into financial planning don't come to youtube for advise, consult a Local or trusted online broker/ planner
Very true, I find myself lucky enough exposed to money management at an early age. Worked full time when I was 19, purchased first home at 28 fast forward time I'm 57 now not laid off
This is huge! would love to grow my reserve regardless of the economy situation, my 407k has lost everything accrued since early 2019, at this point, i'm in need of guidance, can you point me?
GREGORY LEO CATTEL is the licensed FA I work with, I can't speak much about him you should make a search with his name, you'd find the necessary details to schedule an appointment.
I just Googled his name and his website came up right away. It looks interesting so far. I sent him an email and i hope he responds soon.
this was very easy to follow along. Great explanation. Loved the bloopers at the end.
Consider drawing early while your quality of life is higher. The time value of money = value of a dollar now is worth more than the value of a dollar 5-8 years from now. Average life span is mid-70s so why not draw for 13 years vs 5-8 years. You need less money the older you get so who cares about as much monthly income after 70?
Recently retired and couldn’t be happier. The job was mentally taking a toll on my heath . Management’s these days are becoming toxic which is making jobs places mentally and physically difficult. I am Grateful that I live under my means and have an amazing pension for life . Now social security I pray if I see 62 🙏🏻. Best advice save save save and live under your means and be debt free . Take care of your self-care because nothing in life is guaranteed. 🙏🏻🥰
Retirees need to do the math to decide when to start taking social security. I looked at what my monthly benefit would be at 62 vs 67. Yes, the benefit increases when you wait, but you also have several years of receiving that lower benefit by not waiting. I tracked total amount received for each one, starting at 62 vs 67, and compared the data on a graph. The two lines didn't cross until age 82, by which time I figured my expenses would be lower. Several ftiends did it too and found pretty much the same thing. That's what made me decide to start drawing at 62. The benefit is indexed to inflatiom, so my purchasing power (technically, anyway) stays the same.
Most calculators find the crossover point is closer to 78. 82 seems like you’ve done something odd in your inflation assumptions.
You have to factor in survivor benefits if you have a spouse. The longer you can wait the better. SS is also subject to COLA ‘s. The larger the benefit the larger the annual increase. No one can live off SS benefits at 62. More importantly drawing early limits what you can earn annually until you reach your FRA. Which for many now is 67. Serious health issues are really the only reason to take SS early. If you want to retire at 60, fund retirement with your own resources and wait on SS.
My dad had a favorite uncle who came out west to see a large piece of property my dad and mom had agreed to purchase recently. My dads uncle had just retired at 65 and went back home after his visit. He died 6 months later from cancer. At the point my dad decided he would retire at 55. He and my mom retired at age 56 in 1999 and so far so good. My dad told me this when I was very young and I took it to heart. I am 4 months short of my 56 birthday and anticipate retiring within the next year +/-.
@shawnbrennan7526 I didn't make any inflation assumptions. I simply took the amount SSA said I would get at 62 vs the amount they said I would get at 67 and plotted it our. Came out to just about age 82. Even if it was 78 my statement still holds. My expenses would be lower at 78 than at 62 so it made sense to start drawing at 62.
The amount you get at 62 is 70% of what you’d get at your FRA of 67. (Your FRA is 67, right?) Therefore, the point at which total payments to-date are equal is 77 years 8 months.
(200 months at 70% = 140 months at 100%).
Apparently, Google was eavesdropping on my conversations...but this time I don't mind. I have been looking for this information...in this type of format. Thank you. New Sub.
Welcome to the channel!! 😊
Friendly reminders re: social security:
1) That's your money
2) They did not ask permission to take your money
3) Any asset manager who offered you the returns offered by social security would be immediately fired. Out of a cannon into the sun.
Social security takes 12% of your income. In exchange, they give you a bare fraction of what you could do with that money on your own.
In my example, (granted I'm pretty young so we just have to estimate), SSA estimates that they'd give me $2,400 per month. For someone living under the 4% rule in retirement, that is about a $720,000 nest egg. If, instead, I took that 12% and managed it myself, it'd likely be closer to $3,000,000. For you 4% rulers out there, that's $10,000 per month. OVER FOUR TIMES what Social Security is going to give me.
And since it's *my* money, I can take it out early if I have enough and don't friggin' wanna work anymore.
Down with the SSA. Let us manage our own retirements again!
95% couldn’t manage that. Most people cannot come up with $1k in cash …. I get it. But majority would not make it
@@martywilliard Yeah. He is a dreamer. You just have to look at the situation when SS was brought into being. The elderly couldn't retire or retired to a harsh life of little to no income. Hopefully with a family member. Far too often it was out on the street selling apples. It was never expected to be a total replacement of your working income but was expected to keep the elderly off the streets.
If the trillions that is in the SS trust fund were suddenly invested in the stock market I wonder what the affect would be. I honestly am not sure if it would go through the roof and be incredibly over valued or if the prices would crash. But I seriously doubt that the returns would continue as it has.
Many of us thought the same thing when we were young. Best to think of SS as “life insurance”: it provides some income to live on if you go beyond the average life expectancy.
BTW, unless you are self-employed, it’s 6.2% from you and 6.2% from your employer. Let’s not pretend your boss would increase your salary if they didn’t have to pay into it.
@@shawnbrennan7526 Exactly. It is the somewhat inflation adjusted annuity that we "know" is going to be there. That is why they can only invest the trust fund in federal backed bonds. It was considered the safest investment vehicle for guaranteed investments.
It is critical to avoid risk and not lose money on something that is guaranteed.
its a ponzi scheme and the house of cards needs to fall.
Excellent information! I dread trudging through the government’s websites for what I need to know, but you made it easy and enjoyable to listen to .. Thank you!
Retire at 67. Dead at 68.
Great video Erin. People should try to figure out how to retire early. I’m glad you’re putting out videos that are not of the norm. I wish I had thought the way you do about finances when I was young. Keep up the great work.
I retired at 55. Who says it’s early. The corrupt government? I will be collecting SS in January at 62. Have two pensions.
I went with buying rental property starting in my late 20's then added several more with the real estate collapse.
My work is unrelated to real estate. I work because I enjoy what I do and the interactions I have with my customers.
I've been working 10-20 hours a week since my 40s. At 10 hours, it'll exceed anything I may or may not get from SS.
Social Security and retirement accounts never factored into my planning, as my income will never really stop.
I never thought about retirement. I just quit working at age 33.
Married a retiree at age 35, and he became my retirement. That was a happy marriage and lasted 38 years until he died. Always another way to retire.
This is bad advice for most normal people.
@@TheRestrictedgamer I know right? lol. Just quit working and hope to find a pensioner who takes a liking to you. 😂.
@@justinofboulder Using the phrase "There is always another way to retire" presents it as advice.
Sounds like a pay to play arrangement
@@justinofboulder I added those words to make the quote grammatically correct as an act of charity for the original comment. The change has no effect on the meaning of the phrase. Professional writers would put such changes in brackets to signify a minor modification of phrasing that has no effect on the original author's intention, but I skipped that step because this is a youtube comment and not a Master's thesis.
As for the rest of your comment, which has nothing to do with the subject at hand and seems to be more of a poorly placed attempt at self-aggrandizement, I'll pose only one question: If you are so proud of your financial independence, why are you defending someone promoting the exact opposite? The original comment is a perfect example of someone who's financial situation is entirely dependent on someone else.
Wow what a great informative video, easy to understand and I am an early retired CPA. Never knew this as I never expected to get any in the first place😂.
After 4 years of Biden, I wonder if we'll even have a Country in 4 years when I reach 62.
After 4 years of Trump putting us in debt by $7.8 trillion. He is the one responsible for 25% of our total debt.
Trump will take over Greenland and you can live there. 😂
Just turned 50 this year and have always planned on retiring at 55. I have one more year to pay off all of my debt and then 4 years to save for the 7 to 12 years before SSB kick in. I have a pension I'm already collecting on and a 401k just waiting to be drawn from. After watching your video I feel like I'm on the right track to put myself in a good position to achieve my goal. Keep telling myself just 5 more years.
Thanks for the examples/ comparisons. They were very informative.
Good video! I recommend considering/discussing the issue of why retiring at 55. A Lot of people die in their 60's, we need to enjoy life while young and healthy. You'll understand as you age, if not already, that death is around the corner and healthy days to enjoy life decline.
Also, want to add that by the time you are in your 70's/80's some people may need care and it may be better financial strategy to enjoy life/spend assets earlier while healthier, then get on Medicaid for final years where you are not able to move around/do much/need to be in managed care situation.
Probably the most comprehensive SS vid I’ve seen. Thanks!
When I was 25, I met with my first financial advisor who went over social security with me. He did the calculations based on my salary at that time and asked me if I could live on that amount of money. It was very eye-opening and motivated me to save/invest at least 10% of my income starting at that age. I just hit 50, and I actually don't include Social Security in my retirement income planning. I'm on track to retire at 58; Social Security will just be icing on the cake.
I plan to retire at the end of 2025 at 62 after 36 years in Telecom as a sales engineer. My wife will retire in May 2026 and she's loving life! But walking away from a good income stream and building the nest egg to living from the nest egg is a scary proposition couple with the alarming recession and CPI report
I feel your pain mate, as a fellow retiree, I'd suggest you look into passive index fund investing and learn some more. For me, I had my share of ups and downs when I first started looking for a consistent passive income so I hired an expert advisor for aid, and following her advice, I poured $90k in value stocks and digital assets, Up to 200k so far and pretty sure I'm ready for whatever comes.
@@jeffDwyer1 How can I reach this adviser of yours? because I'm seeking for a more effective investment approach on my savings
Annette Christine Conte is the licensed advisor I use and i'm just putting this out here because you asked. You can Just search the name. You’d find necessary details to work with to set up an appointment.
Thanks for sharing. I curiously searched for her full name and her website popped up immediately. I looked through her credentials and did my due diligence before contacting her.
Excellent explanation. I knew most of it except the indexing of the early years.