Earlier this morning I saw a Tweet from AARP with a link to their Social Security Calculator so I clicked on to see where it said we stand.
If I take my benefit at 67 the AARP calculator says I will get $2600 in today’s dollars and my wife will get $1300 when she turns 67 a few years after me. If I wait until 70 years old my benefit wold be $3200 and my wife’s benefit (based on how the AARP calculator reads) would be the same $1300 regardless of when she takes it.
The AARP calculator didn’t say so but any of these I have ever looked at gives results in today’s dollars and the numbers are close enough to results I’ve gotten in that past that I believe AARP is also today’s dollars.
Our all in for everything including razors, virus software, Tater’s seizure medicine, everything except vacations is $4760 per month. We have a 15 year mortgage on our house that we are paying extra on that should be paid off in nine years when I will be 56. That would take our all in number down to $3060 in today’s dollars.
Obviously we would prefer to be able to take trips now and then but we don’t have to but there is something missing from the above all in which is one-off expenses like new tires or unforeseen vet bills. These things can’t be budgeted for and while there is an element of luck as to how often these things come up, when they do occur they have to be taken care of. A long time ago a reader suggested including $1000 in the monthly budget for one offs and I like that idea. If anything is left over, maybe that could go toward some sort of trip?
At $4500 we would appear to be in good shape if $4060 ($3060 in budgeted expenses plus $1000 for one offs) turns out to be reliable. Of course some things like health insurance will go up a lot but there is no way to know what health insurance will cost in the future.
Based on the numbers we can stop saving and spend what we’ve already put away, woo hoo!
Before getting to the elephant, the reason the numbers work in our favor (our benefit, versus our need) is that we live well below our means which is something I’ve been writing about since the start of the site. If we had a $10,000 lifestyle to replace then the portfolio would have to produce $5500 per month which assuming a 4% withdrawal rate would require a $1.375,000 portfolio. Maybe we’ll accumulate that much but I would prefer to not have to accumulate that much.