Social Security

There are somethings that I believe should stay private.  Issues of money and what happens behind bedroom doors.

Today I am going to violate one of those rules.  I am going to talk about money.  Specifically, I am going to talk about Social Security.

Conventional Wisdom

The conventional wisdom contends that, provided you are in good health, you should delay receiving  benefits as long as possible.  The actuarial tables have a break-even age where you will receive more lifetime benefits provided you outlive that age.

I completely accepted that premise.  I never studied it too hard.  I never asked what kind of discounting rate (if any) was used to incorporate the "Time Value of Money".

Mrs ERJ retired

Mrs ERJ retired in August 2014.  We kept careful track of our money outflows.  We were aggressive in our budget cutting.  We parked a car when it needed repairs.  We re-shopped for various kinds of insurance.  We ate out much, much less.

It was still not enough.

Mrs ERJ and Belladonna need good tires.  It costs money to drive to watch Bella play basketball.  Kubota finds joy in bowling.  Deer hunting licenses set us back $150.  I believe we could continue to economize and get within our footprint.  But we had another option.

Mrs ERJ turned on her Social Security benefits.

Type of Beneficiary	Number of beneficiaries	Average monthly benefit
Retired Workers	38,800,000	$1300
Spouses	2,300,000	$660
Children of retired workers	630,000	$635

Something that had completely eluded me was the Children of retired workers.  One reason it is rarely discussed in the media is because of the relatively small numbers.  There are sixty-five retired workers for every child in the system.  If you qualify for that benefit, it has a massive impact on the break-even age.  It pushes it way, way back.

Kubota is a freshman in high school and Belladonna is a senior so we are looking at three and a half years of benefits for Kubota and a half year of benefits for Belladonna.  They qualify for benefits even though we never put in an extra dime for that benefit.  Mrs ERJ and I actually had a serious discussion about not applying for the Children of retired workers benefit.  It was a short discussion.  Their assorted medical bills will take an immense bite out of that benefit.

On the positive side, our family tradition is to have our graduating senior skip the school, senior class trip.  Rather, our family goes on a one week vacation, planned by the graduate, anyplace in the continental USA.  The only stipulation is that the itinerary must be in alignment with our family values.  Belladonna wants to go to Seattle and help recovering caffeine addicts.  It looks like the entire family will be able to go!

Our plan is to continue to hone our budget.  My expectation is that we are in for a bout of stiff inflation, inflation that will be under-reported for a myriad of reasons.  The team plays on game day the way it practiced the week before.  I take practice very, very seriously.