When we officially stopped working for a regular paycheck, it would still be 30 years before I could start to collect full Social Security benefits at Age 67, and 35 years before Winnie could receive the spousal benefit.
With Social Security so far in the future, many early retirees don’t even consider SS as a factor. Who knows, maybe the program won’t even be in place in 30 years. Best case it might be an insurance policy, a final layer of protection for worst-case outcomes.
But time marches on. It is now only 18 years before I am eligible for reduced early benefits at Age 62.
Which got me thinking… should I start to include Social Security in our overall portfolio value? And if so, can we spend that future Social Security income now?
2018 was our 6th full year of early retirement and world travel. It is nice, I highly recommend it.
It was also a year of many firsts – first visit to the Baltic countries, first time to pay rent in 2 places at once, first time traveling around a school calendar, and… the first year without expense tracking.
This week, a fairly common question from the inbox:
Hey Jeremy, thanks for the great blog! I’ve read all of your stuff. Like you, I’ve put a lot of our retirement portfolio into VTI / VTSAX. VTI pays about 2% which is only half of what the 4% rule allows us to spend. How can I live off just dividends? What about the other 2%?
The answer is simple: don’t live off just dividends.
There are a lot of great comments on this site and on the forum. Here is one of them that deserves a longer response:
“Hey GCC, thanks for sharing your tax returns each year. How do you decide in a given year whether to do a Roth IRA conversion, harvest capital gains, or both? How do you prioritize?’
It is all a function of other income, long-term tax minimization progress, and short term spending needs.
Over the past several years, I’ve made minor annual adjustments to our investment portfolio – harvesting capital gains, rebalancing, and adding fresh capital.
This is what our portfolio looks like as of early 2019.
