“Some of us on FR argue that it’s best to financially plan like SS doesn’t exist (retire using your own budgeting, saving, and investing).”
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Agree with that. And SS could well be subject to some type of means testing down the road, thereby limiting how much you can get.
True that. And in the world of SS vs investing, there are ways for investments to grow tax free (i.e. Roth accounts) but income taxes are paid on SS. So any decision to delay taking SS should at least consider the increased taxes from it.
With my wife retired and 60, and me quasi-retired in my 50's, and with the Trump tax cuts, combined with our low cost of living area in Alabama (able to live comfortably for a relatively lower income and, therefore, we're in the 12% tax bracket), we'll probably start collecting my wife's SS two years from now when she turns 62. Even with that extra taxable income (in her case 85% of her SS will be treated as taxable income) and even though we'll both be too young for the new Age 65 standard deduction bonus, we'll still be in the 12% tax bracket. Therefore, I'll still contribute to our Roth IRA's (because I'm still somewhat working and therefore able to contribute to our Roth IRAs) and not get a tax break now (already in a low tax bracket) instead of investing into traditional IRA's. And when I fully retire we'll convert my tax deferred investments into my Roth IRA in chunks across years (each chunk small enough to keep us in the 12% tax bracket, since Roth conversions are taxable events).
The end result is all of our investments will be in our Roth IRA's growing tax free (won't pay taxes on living on the withdrawals from our investments). Both of us will collect SS at the earliest age (62) and I may do only 2% or 3% annual withdrawals from investments for the first few years because the SS checks will be helpful to live off of. That'll allow our investments to grow more than if we did the common 4% withdrawal strategy, which we'll eventually do in future years when the SS checks are low (because they won't rise enough to keep up with inflation). Or I may do 4% withdrawals from day 1 of me being fully retired so we can enjoy it more while we're young, with the understanding that our lifestyle will eventually slow some (because the SS portion of our income won't rise enough to keep up with inflation, even if the Roth IRA portion does).