Inexpensive College Credits, Social Security and One More Year Syndrome, IRL Meetups

Inexpensive College Credit Options

Social Security and One More Year Syndrome

In a recent YouTube video, Sean Mullaney discusses a back-of-the-envelope way to think about the impact of an early retirement on Social Security benefits that I thought would be really useful for you to consider.

I also asked Sean to summarize his findings and here’s what he said:

"Oftentimes, a reduction in annual Social Security benefits should not be a driver for putting off retirement for one more year (One More Year Syndrome).

For most Americans under age 60 with fewer than 35 years in the workforce, additional annual earrings increase annual Social Security benefits (expressed in 2023 dollars) at full retirement age based on the following formula:

Additional Annual Earnings (up to the FICA cap) divided by 35 multiplied by either 15% or 32% (depending on the person's historic adjusted career Social Security earnings).

In the video, I show an example where retiring a year early and declining a $100,000 annual salary only reduces annual Social Security benefits by $914 at full retirement age (expressed in 2023 dollars).

Of course, Social Security has additional nuances, such as future inflation adjustments, potentially taking benefits early or deferring, and the potential impact on spousal benefits.

But it is fair to say that if one is otherwise emotionally and financially prepared for retirement, Social Security is probably not a reason to succumb to One More Year Syndrome."

The Value of In Real Life Meetups

I recently got back from the EconoMe Conference and to say I was blown away is a massive understatement.  Diania Merriam put on an amazing weekend of what amounts to the largest FI gathering in the world.

I was also deeply humbled by the impact ChooseFI continues to have on members of the FI Community – it was amazing to meet literally hundreds of people who have been positively impacted by our work here.

I can’t recommend the conference highly enough, so be sure to consider it in 2024.

In the meantime, similar, but much more intimate weekends are happening across the US in 2023 at the six different Camp FI events Stephen Baughier is hosting through the end of the year.

ChooseFI Community Taking Action This Week

• Patrick said, "My 1% is that I finally used my F/U money and quit my job as a government litigation attorney because I was no longer allowed to telework. The division required lawyers to come back to the office two days a week starting in April 2022, but I was allowed to stay on until December (teleworking the whole time) to resolve a few specific cases I had been working on for the past two years that saved the federal government a few million dollars. I am now in private practice offering tax, financial, and legal services, including assisting other FI-minded folks with tax issues! Since I had a few months to prepare before leaving the job, my partner built me a fantastic website while I prepared to officially become a full-time entrepreneur. The FI mindset is empowering and provided me with the financial confidence to start this exciting new adventure."

• Anna said, "My 1% better is that I started a new position a few months ago, and one of its benefits is a complimentary gym membership. I took the money that I would have spent on a gym pass, and now spend it on a personal trainer. The trainer is more expensive than the membership, but it's worth every penny. After years of plateauing in my fitness goals, I'm now making huge gains. Today I squatted 120 lb!"

• Tyler said, "My MORE than 1% better was signing an offer letter for a Salesforce Support Specialist role, after not having any Salesforce experience prior to February of 2022. Within 9 months I studied to get certified and made a complete career pivot. Annual Salary + expected bonuses will = about a 35% increase in income."

• Jessica said, "My 1% is paying off 7 debts totaling $3517. We will see a decrease of $544 a month in our monthly expenses. We also re-saved $1K in a high yield savings account that earns about $2 a month in interest. Small but cool. I hope we can keep this momentum going. It's my desire to pay off our last 3 credit cards, travel hack, and then refinance and pay off our car."

• Sarah said, "My 1% this week was buying a new battery for my 11 year old laptop and installing it myself instead of buying a brand new computer. My old battery couldn't hold a charge and I had been shopping for a new laptop/tablet but instead of spending $1,500 on a brand new computer I paid $50 for a battery that should last me a few more years."

• Adam said, "Here's my 1% better this week: My apartment building is part of the Bilt Alliance so I decided to sign up for the Bilt credit card, which allows me to earn points when I pay rent (my biggest monthly expense). Last month, the credit card was running a promo that allowed you to get 3 months of United Premier Gold Access for free. Lucky for me, I had an upcoming flight on United. The status not only allowed me to get a free checked bag but the morning before the flight, I learned I was upgraded to first class (my first time ever flying first class!). While it was just a shorter domestic flight, it was cool to experience that and for free, thanks to my credit card. This was a good reminder to keep an eye out for all your credit card benefits!"

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