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How do you max out your Social Security contribution?
Isn't it simply taken out of your paycheck?
One pursues a salaried job where the earnings are at or above the annual SS cap for that tax-year, and aims to maintain that job for as long as possible. Also, one makes sure to have 35 creditable years, where one has SS contributions... ideally with a salary exceeding the respective SS cap every year.
This is unfortunately contrary to the very core of FIRE philosophy. It is the antithesis of saving aggressively and taking a maximally early exit from the rat-race. Alternative perceptions abound.
One pursues a salaried job where the earnings are at or above the annual SS cap for that tax-year, and aims to maintain that job for as long as possible. Also, one makes sure to have 35 creditable years, where one has SS contributions... ideally with a salary exceeding the respective SS cap every year.
This is unfortunately contrary to the very core of FIRE philosophy. It is the antithesis of saving aggressively and taking a maximally early exit from the rat-race. Alternative perceptions abound.
Why would I have lived like a pauper my whole adult life to create a huge pile of money now? I did things in my 20s, 30s, and 40s that I’m physically not capable of now as I’m about to turn 61. It’s not like I’m ever going to be poor. I know I have a $45k COLA-protected and largely tax free Social Security check coming at age 70 and plenty of money to bridge 9 years.
Why would I have lived like a pauper my whole adult life to create a huge pile of money now? I did things in my 20s, 30s, and 40s that I’m physically not capable of now as I’m about to turn 61. It’s not like I’m ever going to be poor. I know I have a $45k COLA-protected and largely tax free Social Security check coming at age 70 and plenty of money to bridge 9 years.
This is one of life's main tradeoffs. Living in a relatively affluent and stable society, we have the luxury of making such a trade.
One thing that shocks me in this whole FIRE debate, is how many of its most voluble proponents had jobs of considerable intellectual satisfaction and prestige. I refer in particular to Mr. Money Mustache, who was some sort of software-developer... not, evidently, a help-desk stooge, or a system-administrator, or an alpha-tester, or the leader of some "tiger team" appointed to squash the latest spate of bugs... but a developer. Another fellow, whose online persona escapes me, was an investment-banker. These are not coalminers or Chinese-food delivery drivers. These are not DMV clerks or English majors stuck in a call-center fielding irate customers' desires for refunds. These are professionals with considerable autonomy and room for creative self-expression. Nevertheless, they're eager to quit, to assert themselves as private and autonomous individuals.
There is no optimum or comprehensive plan. It isn't my point here to advance one option above others. But I do wish to say, that success with aggressive savings and investing, even if it DOES result in a tidy sum fairly early in life, presents its own challenges. The modern world just isn't set up for able-bodied people to retire at 45. Sure, it can be done - and many do it admirably well. They enjoy life, and find ample rewards beyond the orbit of conventional salaried employment. They travel or volunteer or write fancy epistles on forums. But there's an opportunity-cost. There are pressures and annoyances incurred, totally alien to the blubbering unimaginative worker-bee who stays in the hive through age 65. Things like self-employment taxes, healthcare premiums, lost SS earnings, lost 401K matches and so forth. They add up.
Then there's stoicism vs. hedonism. The other day, I pulled into our gym parking-lot, and soon after there arrived a fancy new Dodge Challenger, with decorative emblems that - unless fakes - promised a brutally powerful machine. After some lazy idling of the engine, out jumps a fellow maybe in his late 20s, or younger. How does such a squirt afford a $70K machine, let alone its insurance and fuel and other costs of ownership? Daddy? Maybe, but it's not that kind of community. Somehow he makes it work. Is he a fool? Is he hopelessly in debt, with that fancy chariot just a month away from repossession by an angry coachman? Maybe. I'd not make such a purchase. It seems... extravagant, especially that early in life. And yet, part of me is seething in envy and self-pity. I'm a car-guy, by affinity if not by practice. I lust for such mechanical power, even more than I lust for you-know-what. Few pleasures are more intense, than a snarling beast on wheels, lapping up the quarter-mile. But I had to give that up... for early retirement etc. And that young man, that fellow just a few years out of college (assuming that he even went to college!) is already living my dream! Who's the fool now?
There is a famous fable - whose author or provenance I can't recall - about a starving donkey. The donkey is placed exactly equidistant between two piles of delicious food. He looks to the right, desirous of the food pile on the right, but realizes that were he to proceed in that direction, he'd forego the equally desirable food on the left; and vice versa. Consequently, he stays put, starving to death.
This is crucially important and good advice. I'm shocked that so many go to prodigious effort to do something more clever, which ultimately pays less, and requires more work.
Aside from the issues of personal health, of which nobody is immune (pun intended), it's hard to overestimate the utility of steady, well-paying employment. My own evolving belief, is that it is better to be profligate and rubbish at money-management (so long as one doesn't incur debt!), but to have a stably high salary, than to be thrifty and a wise investor, but low-income.
The first reason is that accumulating a substantial "stash" (as some luminaries in the FIRE community term it) is a pleasant sensation, but it hurts and irritates one to start spending it. The "stash" becomes more a badge of inner honor, than a source of income. If Magic Qwan attains his three million or whatever, at age 42 or whatever, that's knee-slapping fantastic... but thereupon, how would he feel about spending it?
Second is Geoff's point, or my rendition of it, about the potentially ditzy employee who spends all of his money on sports-cars and posh vacations, having nothing to show for it... except for a fat Social Security earning stream good for perpetuity (barring some nasty change in the law, of course).
In other words, earn well, stay healthy and retire late. That [perhaps] is a better strategy than the millionaire-treadmill... or at least an alternative worthy of consideration... if only the health-part stays reliable.
True.
Well, no saying I couldn’t do both.
I’m not really educational leadership material since I’m not pushy enough and am generally percieved as a bit odd, but since I have summers off now, I could return to creative work again. My book I published never made much money and my older manuscripts for other books make me cringe, but animation has always interested me. I had a “gifted and talented” art teacher who introduced me to some animation, but he died not long into teaching me and I never found another good teacher, so I’d need to teach myself, but that might be an interesting hobby...hopefully it pays, though.
One of my problems (besides low-grade chronic depression that doesn’t respond to anything I do to try to treat it) is I’ve always preferred leisure to work, and though I’m doing much better for myself lately, my daydreams still revolve around basically being a beach bum with enough passive income to deal with any issue that comes up (like food, shelter, and health emergencies).
I come from a very short-lived unhealthy line of people, too, so with my luck, by the time I get enough saved for a 30 year retirement, I’ll be dead.
[quote=Magic Qwan;54893830]...I’ve always preferred leisure to work, and though I’m doing much better for myself lately, my daydreams still revolve around basically being a beach bum with enough passive income to deal with any issue that comes up (like food, shelter, and health emergencies).
Besides a visit to Lubberland, the suggestion is to strategically accept a lower material quality of life... and non-material besides. Don't marry. Don't have children. Avoid owning a car. Don't dine-out. Don't drink. Use the public library for internet-access. Live with roommates in a ramshackle part of town.
Quote:
Originally Posted by Magic Qwan
I come from a very short-lived unhealthy line of people, too, so with my luck, by the time I get enough saved for a 30 year retirement, I’ll be dead.
May we all be so lucky. Unfortunately, it is precisely the health-promoting measures, such as weight loss and exercise, that saddle us with tendency towards longevity, where our bodies outlive our brains, let alone our souls.
One thing that shocks me in this whole FIRE debate, is how many of its most voluble proponents had jobs of considerable intellectual satisfaction and prestige. I refer in particular to Mr. Money Mustache, who was some sort of software-developer... not, evidently, a help-desk stooge, or a system-administrator, or an alpha-tester, or the leader of some "tiger team" appointed to squash the latest spate of bugs... but a developer. Another fellow, whose online persona escapes me, was an investment-banker. These are not coalminers or Chinese-food delivery drivers. These are not DMV clerks or English majors stuck in a call-center fielding irate customers' desires for refunds. These are professionals with considerable autonomy and room for creative self-expression. Nevertheless, they're eager to quit, to assert themselves as private and autonomous individuals.
A lot of these jobs are not nearly so creative and autonomous as you’re imagining. I’ve been a circuit designer for most of my career, which I’d guess is a similar work environment to a SW developer. I do understand MMM’s objection to the work. It can involve long hours, lots of schedule pressure, managers who want your work done in a certain way and who want to know the status of your work on a daily basis, late night meetings with co-workers on the other side of the planet, etc.
With that said, there is a fair amount of variability among employers and managers. So I’d advise anyone who is burned out by their work to try another company or two before throwing away their career.
so many of my buddies left great paying jobs because of what they called "stress" ...
they had good pay , good benefits and after so many years were really off the radar as far as their work and being scrutinized ...
so they took their buy outs or early pensions and now have lower end jobs , with crappy pay , crappy benefits , the worst shifts , no seniority and ARE UNDER THE MICROSCOPE OF A GRUNT SUPERVISOR WATCHING THEIR EVERY MOVE
so many of my buddies left great paying jobs because of what they called "stress" ...
they had good pay , good benefits and after so many years were really off the radar as far as their work and being scrutinized ...
so they took their buy outs or early pensions and now have lower end jobs , with crappy pay , crappy benefits , the worst shifts , no seniority and ARE UNDER THE MICROSCOPE OF A GRUNT SUPERVISOR WATCHING THEIR EVERY MOVE
I cannot imagine anyone right out of high school choosing to pursue FIRE. Seems like an incredible waste of time and effort... getting a college degree and then using it for only a short time, all for the purpose of living on a poverty-level income. I expect it's mostly people who did not realize what they were getting themselves into, and then instead of switching careers they choose FIRE.
i thought you had to work at a career to retire from one ...silly me
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