Market Major Correction Coming

[outside shooter]

I'm 59 and hope to retire at 67. But even so, it's not the case that the retirement money will all be cashed out in 8 years. I hope that I'm around long enough that much of it is invested for 30-35 more years. So it's still going into the market, as that is the longer term play.

I was lucky to use about 14% returns over 2 decades to get kids through college, but that can't last forever. Past downturns have rebounded rather nicely to get most long-term stock investors into a 7 to 10% return range, so we seem to be regressing a bit to more reasonable returns in the long term, historically-speaking.

 

[Sope Creek]

I'm 59 and hope to retire at 67. But even so, it's not the case that the retirement money will all be cashed out in 8 years. I hope that I'm around long enough that much of it is invested for 30-35 more years. So it's still going into the market, as that is the longer term play.

I was lucky to use about 14% returns over 2 decades to get kids through college, but that can't last forever. Past downturns have rebounded rather nicely to get most long-term stock investors into a 7 to 10% return range, so we seem to be regressing a bit to more reasonable returns in the long term, historically-speaking.

You mean regressing to the mean?

Yes, I'm mean.

 

[Sope Creek]

I'm 59 and hope to retire at 67. But even so, it's not the case that the retirement money will all be cashed out in 8 years. I hope that I'm around long enough that much of it is invested for 30-35 more years. So it's still going into the market, as that is the longer term play.

I was lucky to use about 14% returns over 2 decades to get kids through college, but that can't last forever. Past downturns have rebounded rather nicely to get most long-term stock investors into a 7 to 10% return range, so we seem to be regressing a bit to more reasonable returns in the long term, historically-speaking.

You might want to start thinking about your social security strategy for when you claim benefits. Any reduction in benefits because of not enough in the fund will come out of your then-existing benefits, so maximizing that amount by waiting until 70 to claim may make sense.

 

[BCCHoosier]

You might want to start thinking about your social security strategy for when you claim benefits. Any reduction in benefits because of not enough in the fund will come out of your then-existing benefits, so maximizing that amount by waiting until 70 to claim may make sense.

These scenarios are interesting to think about, especially since none of us have a crystal ball in life expectancy.

I've seen too many folks die much earlier than planned. I'm leaning on taking it at the first date possible and simply investing it. My wife and I have pensions which obviously helps, plus retirement accounts. My other thought is my 60s will be my heavy travel years. So social security may allow for a few splurges I otherwise might not do when traveling.

 

[Sope Creek]

These scenarios are interesting to think about, especially since none of us have a crystal ball in life expectancy.

I've seen too many folks die much earlier than planned. I'm leaning on taking it at the first date possible and simply investing it. My wife and I have pensions which obviously helps, plus retirement accounts. My other thought is my 60s will be my heavy travel years. So social security may allow for a few splurges I otherwise might not do when traveling.

My dad died at near 90. My mother is still alive at nearly 98 . . . my maternal grandparents lived until they were in their early 90s. All took social security as early as possible to relieve themselves of the burden of working. My dad did all the calculations, and in none of them did he imagine he'd live as long as he did. He took social security at the first opportunity and almost outlived the income stream's ability to pay his bills . . . and that's with a pension and some savings.

My mother craves her independence, and even after selling her house and living cheaply, she's staring at running out of money . . . which will require me to step in. That's the scenario that one has to plan for. Living to 100 and beyond is not only possible, it's right now.

 

[outside shooter]

You might want to start thinking about your social security strategy for when you claim benefits. Any reduction in benefits because of not enough in the fund will come out of your then-existing benefits, so maximizing that amount by waiting until 70 to claim may make sense.

Yeah, I don't think much about social security since it's been in the back of my mind to try to not need it. But every year when I get the email from the SSA to check their projections I take a peek. My sister took hers ASAP. Others I know held off for a bigger amount, which makes more sense to me.

 

[Sope Creek]

Yeah, I don't think much about social security since it's been in the back of my mind to try to not need it. But every year when I get the email from the SSA to check their projections I take a peek. My sister took hers ASAP. Others I know held off for a bigger amount, which makes more sense to me.

Name me any place else you can get a guaranteed 8% return on your money . . .

. . . social security benefits increase by 8% every year after your full retirement date. That alone persuaded me. Then factor in the increase in spousal benefits - especially considering the reduction of spousal benefits due to any governmental pension the spouse gets - and the potential reduction of benefits because of social security running out of money . . . 77% of $2000 is more than 77% of $1500, for example . . . and the argument in favor of waiting is pretty compelling. The only thing that gives me pause is the notion that the country might do away with social security altogether. 🤷‍♂️

 

[Univee2]

Name me any place else you can get a guaranteed 8% return on your money . . .

. . . social security benefits increase by 8% every year after your full retirement date. That alone persuaded me. Then factor in the increase in spousal benefits - especially considering the reduction of spousal benefits due to any governmental pension the spouse gets - and the potential reduction of benefits because of social security running out of money . . . 77% of $2000 is more than 77% of $1500, for example . . . and the argument in favor of waiting is pretty compelling. The only thing that gives me pause is the notion that the country might do away with social security altogether. 🤷‍♂️

“. . . do away with social security altogether.”

For everybody or for those just entering the workforce? I don’t see anybody eliminating SS for those who paid into it for years. You want a revolution?

 

[outside shooter]

One oddity on the SSA projections is that the increase in monthly payout, at least for me, isn't steady. If I look at the number for age 67, for example, it goes up a bit at 67 and 4 months, then it stays flat at the exact same number until age 69 and 4 months. If that holds true in future projections, it would make sense to time it right when it bumps up and before such a long-ish flat spot.

 

[JamieDimonsBalls]

Troubling signs

 

[Sope Creek]

“. . . do away with social security altogether.”

For everybody or for those just entering the workforce? I don’t see anybody eliminating SS for those who paid into it for years. You want a revolution?

There are ways to soften that blow. One might be to give a tax credit for what would have been the full amount of the accrued benefit. Another might be giving a tax credit for the amounts paid in by the employer and the employee. And then the tax credits would continue for as long as the person is alive . . . a form of tax credit that amounts to the same thing as a pension.

I don't think that's likely . . . but I have childrens who talk about it occasionally. When I ask who I'd move in with, I get no raised hands . . . .

 

[BCCHoosier]

My dad died at near 90. My mother is still alive at nearly 98 . . . my maternal grandparents lived until they were in their early 90s. All took social security as early as possible to relieve themselves of the burden of working. My dad did all the calculations, and in none of them did he imagine he'd live as long as he did. He took social security at the first opportunity and almost outlived the income stream's ability to pay his bills . . . and that's with a pension and some savings.

My mother craves her independence, and even after selling her house and living cheaply, she's staring at running out of money . . . which will require me to step in. That's the scenario that one has to plan for. Living to 100 and beyond is not only possible, it's right now.

Definitely makes sense given your probable life expectancy. My mother-in-law died the very first month she was to collect (62) and had a friend die after only a few months.

 

[UncleMark]

Yeah, I don't think much about social security since it's been in the back of my mind to try to not need it. But every year when I get the email from the SSA to check their projections I take a peek. My sister took hers ASAP. Others I know held off for a bigger amount, which makes more sense to me.

I took mine at 66 when that was declared to be "full benefits". For me it was time, all the number crunching aside. That was when I ran out of gas.

So far my take home pay cash flow with our SS and my delivery income is actually slightly better than my take home pay was in my last years working. Medicare was a big factor, and I am no longer contributing to a 401K.