Question: Should I retire now if Social Security will be my major support?

Answer: I don't know how old you are, but the answer depends on that as well as many other factors including survival benefits, the amount and kind of a pension you may get, your expectations for a fulfilling life after retirement compared to how you feel about your current job, the health of you and your wife, whether you think you will need to help some other family member financially, etc.

I can comment on Social Security (SS) and economic prospects that may affect your decision.

I don't think that SS benefits for those now in their mid fifties or over will be changed much because they will be grandfathered, just as they were when the full-retirement-age was changed from 65 to 67 for younger people. I think that they may well extend the full-retirement-age to 70 for younger people, and I believe they will have to increase the payroll tax.

One of the great things about SS is the survival benefit--especially for a surviving spouse. Unless the higher wage earner dies very young, the surviving spouse gets 100% of whatever the deceased spouse was getting. SS is the least expensive longevity insurance a person can buy, which is why so many people that started SS at 62 are now trying to repay their SS and start again at an older age, some even 70. More and more advisors are telling clients to delay SS till as close to 70 as possible even if they retire early unless they don't have the savings to support them in the mean time or unless the chance of neither spouse living past 80 is very high.

Medicare is in a terrible state. I think we are going to need a very large personal savings reserve for medical care and will most likely underestimate the cost we will see late in our lives. It's already hard to find doctors who will take Medicare patients, and that can only get worse. Look to reduced benefit coverage, higher payroll tax (The current 1.45% is ludicrously low considering the benefits.), and a tough time finding a general practitioner.

The states will get a lot of pressure to take on more of the financial responsibility for Medicaid--which has to grow exponentially. That means we will see increasing state taxes in some form. It will be in increased sales taxes, business and property taxes and state income tax. That affect all of us, no matter what income level.

I think we are in for some very hard times, particularly for those with little SS, fixed pensions and low savings. That said, there often is more to retirement than financial considerations. Family, health, low-cost recreation, a fulfilling avocation, etc., all may be much more important.

The things above are the kind of things that I would consider if I were making the decision to retire again. Hope this helps a bit.

Bud