Financial Independence Update
The key to our financial independence update and overall plan has always been our disciplined savings rate for investing.
If you (or I) are spending 100% of our available income, we’ll never get to where we want to be financially.
Read on about our path to semi-retirement in this latest and refreshed financial independence update!
Asset Accumulation vs. Asset Decumulation
The path to wealth-building can take many roads for many people.
Some investors enjoy wealth-building via real estate.
Others are into private equity.
Still others are entrepreneurs and enjoy building and growing a business.
There is no one right path.
When it comes to our financial independence plans, I/we have chosen to invest in common stocks that deliver growing dividend income and low-cost Exchange Traded Funds (ETFs) that deliver primarily capital gains.
We have landed on this approach largely because it aligns with our long-term financial goals and lifestyle choices. For example, we don’t want to engage in the risks that come with owning multiple properties. We’ve been a landlord and really didn’t like it. Private equity seemed like too much of a risk. Instead, we have chosen maybe a more traditional path: buy and pay off our home/condo and call it “home base”. We want the flexibility to travel while keeping a small environmental footprint. To fund our lifestyle, we do however want some passive income from our investments to reduce the burden or need to work full-time.
At the time of this post, we’ve been on this financial path for over 15 years.
Because of this long-term path, our semi-retirement dreams are very close to reality.
Why Asset Accumulation is Easy Street
Our path to asset accumulation has been rather easy to explain and follow, an approach most Canadians can likely replicate should they choose:
- We save early and often. We strive to max out contributions to our TFSAs and RRSPs every year.
- We keep our investing costs low. We don’t own any high priced funds (and haven’t for almost 15 years). High-price funds and products pad the pockets of the people that sell these products.
- We diversify our equity investments. We own many dividend growth stocks from Canada and the U.S. We’ve decided to own some low-cost ETFs for extra diversification.
- We stay invested. Markets rise and fall. So, we stay invested. If anything, we tend to buy more stocks and/or ETFs tank in price.
That’s essentially it.
You can read about how I built my dividend income portfolio here/below:
Why Asset Decumulation is a Tougher Road
While the process of asset accumulation has served us well, I have been seriously thinking about asset decumulation in recent years. This means, how the portfolio we’ve constructed will help us fulfill those semi-retirement dreams we had years ago.
Asset decumulation objectives and having a plan are very important.
You don’t have to take my word for it!
“Drawing down one’s savings in retirement is something very few retirees do well, even with the help of professional advisors.” – Fred Vettese, author: Retirement Income for Life; retirement expert.
The asset decumulation puzzle can be complex for some:
|Asset Accumulation Principles||Asset Decumulation Questions|
|1. Save early, save often||1. When should I take my workplace pension?|
|2. Keep your investing costs low||2. If I have no pension, how do I know I have saved enough money?|
|3. Consider asset diversification to reduce losses||3. How much money should I have to retire?|
|4. Stay invested||4. How do I avoiding outliving my money?
5. What do I do if my investments drop and I’m no longer working to recover?
6. How much cash should I have or keep during retirement?
7. How do I fight inflation in retirement?
8. When should I take my government benefits like Canada Pension Plan (CPP) and Old Age Security (OAS)?
9. What mix of stocks and bonds should I keep in retirement, will that asset mix be enough?
10. Should I keep an emergency fund in retirement?
11. How can I generate income from my retirement portfolio?
12. What accounts should I draw on first?
13. And more and more and more!!
The good news is for you dear reader, we’ve been working towards answers to all these asset decumulation questions and much more.
Today’s post will provide updated answers to many of these questions below and what you might want to consider.
Financial Independence Update Q&A
Q1. When should I take my workplace pension (or our workplace pensions)?
I’m very grateful I have a defined benefit (DB) pension from work. I can receive pension benefits as early as age 55, but with penalties in the form of reductions. I’ve been contributing to this plan with the following formula:
1.6% x your Best Average Earnings x years of pensionable service.
Here are my pension terms, word-for-word:
My pension is reduced by 0.4% per month prior to age 60 or reduced by 4.8% per year.
My pension is also reduced by 0.3% per month between ages 60-65 or reduced by 3.6% per year.
I thought years ago about keeping my assets invested within the plan until age 65. I am seriously considering commuting my pension.
I will make a final decision in the coming year or so on that given the other assets we own – including when my pension administrator will run the financial math for me (they won’t do it yet despite asking multiple times, it’s only a function they do when the employee is leaving the organization). All this to say, commuting my pension is an option for me and that might apply to you as well.
My wife is very fortunate to have a defined contribution (DC) pension from work. With 20 years and change invested in this plan, she’s accumulated some good savings. Based on my knowledge of low-cost indexed funds over the last decade-plus, we continue to keep her portfolio in this approximate allocation:
- 30% Canadian bond index fund.
- 35% Canadian equity fund (lowest cost one I could find).
- 35% BlackRock U.S. equity index fund.
Like my DB plan, my current thinking is we take my wife’s pension assets before age 55 in the form of a LIRA (Locked-In Retirement Account) without any reductions. Her assets are vested.
You can read up about a LIRA including how I invest in my own LIRA here.
We’ll unlock her LIRA to a LIF at age 55 and start taking the minimum income stream from that account then. This is likely when any part-time work will stop.
Q3. How much money should I have to retire?
To answer this question, you need to know where you are starting from.
You need know what you intend to spend for your “enough” number.
Here are some very quick (and FREE) ways to find your financial independence number.
I’ve/we’ve calculated ours.
We figure we’ll spend an average of about $75,000 per year. Our base spending, money needed to cover the basics of food, shelter and transportation expenses is about $50,000 per year.
I’ll come back to how we’re going to fund this, and in what order as part of a drawdown strategy later in this post.
Q6. How much cash should I have or keep in retirement?
I believe there is no one right answer.
I do believe it should be a risk-based decision.
Our plan calls for keeping ~ 1-years’ worth of cash at the time of semi-retirement – to cover all basics. So, that’s about $50k in cash. Keeping such cash means effectively we could live for an entire year, on cash, without touching portfolio income, pension income, or needing to work at all. It’s a sleep-at-night factor that’s very hard to quantify and ignore.
One reason to keep cash on hand, beyond near-term spending plans or to cover an emergency, is to help manage market volatility at any age and this is especially important to us since we’ll have a bias to owning mostly equities in retirement. Your mileage may vary.
Q8. When should I take my government benefits like Canada Pension Plan (CPP) and Old Age Security (OAS)?
I know my answer now for now.
Our plan is to take OAS at age 65 but likely defer CPP benefits at age 70.
These are our key reasons:
- OAS does not offer survivorship benefits. CPP does. Unlike the CPP, OAS payments do not transfer over to a surviving spouse. If the surviving spouse is also receiving OAS, that continues; however, the payments being made to the deceased spouse stop.
- CPP incentivizes retirees who delay their payments past age 65 by 0.7% each month or 8.4% per year. This translates to a 42% income boost in CPP payments at the age of 70 compared to age 65 (and for life!). Where else are you going to find inflation-protected, fixed income, rising by 8.4% per year for doing nothing?
- When we hit age 65, we’ll already have other income streams: taxable dividend income, LIRA turned to LIF income, RRSP/RRIF withdrawls, and potentially, still, some small hobby or part-time work. Delaying CPP to age 70 will allow us to “smooth out taxes” where possible while getting the most from our CPP government benefits.
Q11. How can I generate income from my retirement portfolio?
Via dividends of course!
Kidding, only a bit.
But look at this chart? It’s a thing of beauty!
While dividends are great, there are just part of our total return. Meaning for retirement, we will of course sell assets and drawdown our portfolio over time.
Assuming all goes well in the coming years, we hope to start this drawdown order while working part-time.
“NRT” = Non-Registered (N) then RRSPs (R) then TFSAs (T).
What does that mean?
N – Regarding non-registered accounts
- We intend to work part-time in our 50s and “live off dividends” to some degree from this account.
R – Regarding RRSPs/RRIFs
- In our 50s and 60s, we’re going to do something unconventional – we’ll start withdrawing assets, slowly, from our RRSPs. This will help smooth out taxes over a period of decades given other assets we hold. Based on account values now, our RRSP assets should last into our early 70s.
T – Regarding TFSAs
- We don’t intend to touch our TFSA assets in any early retirement.
- We will let our TFSA assets compound over time.
- By our early 70s, with part-time work done, with taxable assets likely sold, and most of our RRSP/RRIF assets likely depleted as well, our plan is to live off income from mainly any government benefits (CPP and OAS) and TFSA income/withdrawals. The latter will be tax-free!
This is a great time to remind you I run a very Helpful Site called Cashflows & Portfolios that can help answer retirement income planning and cashflow management questions.
Subscribe for free and hit me up with a comment on one of our case studies!
Financial Independence Update Summary
As subscribers to this site may know for well over a decade now, we invest this way:
1. We invest in many Canadian and U.S. dividend paying stocks for ever growing dividend income.
2. We also invest in low-cost ETFs for extra diversification.
We’re confident that if we keep investing this way (something I coined our “hybrid investing” approach over a decade ago), we should be able to realize our semi-retirement financial independence dreams.
To realize semi-retirement and work on own terms in the coming years we’ll do the following in the coming 18-24 months from the date of this post:
- Max out TFSAs every year (including 2023 and 2024 contribution room).
- Max out RRSPs every year (same years as above).
- Build our cash wedge/emergency fund to cover 1-years’ worth of expenses.
I prefer Financial Independence Work On Own Terms (FIWOOT) versus FIRE
I look forward to keeping you updated as semi-retirement draws very, very close.
Related Financial Independence Reading
Can you retire early on a lower income? Yes. Read on in this case study about what this reader can do.
This newcomer to Canada wants to achieve financial independence with his family by age 50. Is he on track? What will it take based on his desired spending?
Do they have enough for FIRE at age 52? With $800k invested and a workplace pension? Find out.
Here’s when you should consider taking your Canada Pension Plan (CPP).
Although I have a number of tools available to me to run some financial projections here is a link to them here and all of them are FREE!
Thanks for reading.
Hi Mark: I like all your points. Not having wheels until I was 34 made it easy to save money. I remember once we were down at my brother’s, and I was down in the den playing with his kids and dad was up in the living room talking to my brother and dad said that the stock market was pretty good and that I was doing well by it. He said “Ya, but he isn’t doing that well”. Dad said that I had $232,000.00. This made my brother sit up and take notice. This was in 1982. Also, I think you will find that you don’t need as much money when you retire if you work it right. I had almost $400,000.00 on the nose when I was laid off in Jan. of ’92. ($400,560.00). By the second week of Sept.1997 I had gone over the one million mark. I had to laugh when I saw Norman Rothery’s Monster Dividend portfolio. It took off like a rocket but started at 1990 and I found that part rather flat. As you can see above, I found the ’90s very rewarding. I say this because in the summer I used to golf twice a week and, in the winter, I would bowl twice a week and curl once a week plus bonspiels. Also, we would travel to the Caribbean in the late fall or winter for a week to ten days. Once we went to Hawaii in the spring for two weeks. We also did river cruises in Europe. The good thing about being retired is you can do what you want when you want. I remember once I got out of the GE early to go over to get my license plate sticker but when I got to the door it was locked as it appears they quit at 4:30PM also. Now I can do it any time I want. If you keep investing, I’m sure you will have enough to live on and if you need something to do, I’m sure your wife will have a to do list for you.
I’m sure I’ll have and maintain a long list of things to do as I get older – want to stay busy 🙂
Thanks for your comment and background!
Why wouldn’t you withdraw your money out of the TFSA first rather than your RRSP? It’s all non-taxable and you can replenish it every January using the funds from RRIF (if you are 71+). I’m leaning strongly in that direction but haven’t made a final decision.
That is something I have considered Greg, but I’m also concerned about taxation long-term as I age. Keeping pension income alive, and CPP income, with OAS income, and RRSP/RRIF income is all taxed highly vs. TFSA not-taxed at all as I age. So, I prefer to have less taxation as I get older for my wife and I since I don’t see taxation coming down. The math proves for me that keeping the TFSA “near the end” works.
You might also want to read about this:
For me, it’s actually quite simple: If you need CPP/OAS, take it. If you don’t, delay it.
In my case, CPP/OAS are the only fixed income “investments” I have, so want to make sure there is a decent cushion on top of other investments that rise and fall. So I will delay!
Very simple, very wise advice 🙂 – which I am doing myself.
Great info not on this article but I find most articles informative and somewhat Applicable to our situation thank you. One thing you should research and be prepared for is our generation will not get OAS at 65 it’s been moved to 67 starting in I think 2029. Have a look.
Thanks Stu. No, OAS is at age 65 now, but to your point – eligibility for the OAS pension and the GIS benefit will, over a six-year period, gradually increase from the age of 65 to 67, and be fully implemented by January 2029. This change affects people born on April 1, 1958 or later. The government will do what the government will do!
That OAS change was proposed by the Harper Conservatives in a 2012 budget and scrapped by the Trudeau Liberals in 2016. At this point we are back to age 65 for everyone but who knows what future governments will do. I am one of those born in 1962 so have followed this closely.
Yes, true. Watch this space right??
Hope all is well.
I am one of the few who aren’t DIY investors. I have my investments run by Betterment, Personal Capital and Vanguard. They do the rebalancing, tax loss harvesting, etc. Betterment and Vanguard use Index ETF’s. Personal Capital uses individual stocks evenly weighted across a whole bunch of sectors. They are higher fee than the others at 0.79% for million dollar plus accounts. But I like having some diversity in investment approach. Betterment is like 0.14% and Vanguard is around 0.3%. I’m too lazy and don’t want to make a costly careless mistake so I’m willing to pay some fees. Plus I have surplus of invested assets compared to what we need. Social Security uses the 35 highest paid years of work in their benefit calcs. I started my first year at the maximum contribution and exceeded the amount that is taxable every year for 38 years. So that results in the maximum benefit. My wife worked fewer years at lower pay so while she is taking hers now she will switch to half of mine when I start taking my benefit. (Not half of what I’ll get at 70 but half of what I would have gotten at FRA) I did have a pretty highly paid job as a chemical engineer and later as a corporate executive. I admit we live pretty large on six figures but we only spent a fraction of my pay, maybe 25% of it my last year. We also always gave more than 10% of our gross to nonprofits. I could have retired much earlier than I did but I liked my job a lot, until I didn’t and then retired.
That’s awesome. Yes, I recall SS uses the 35 highest paid years of work so if you’re at the max for those years – amazing!!
No interest in becoming DIY? I suppose Betterment does a fine job in keeping you in low-cost funds 🙂 Nothing wrong with paying for investing support when there is value-added to the investor.
Congratulations Mark. The most valuable take away is that you have created options for your financial future.
Re: Commuting Pension: I think in your case that is a smart move. You have the knowledge and experience to handle it where most people don’t. I didn’t commute (came close), but I could qualify for a pension at 55. Not sure it’s worth waiting until 65 and the penalties are heavy for taking it early. If you can manage your wife’s LIRA why couldn’t you also manage your own? (rhetorical) Of course you can.
Re: CPP I love presenting alternative views – not to create discourse but discussion. Glad you said you could change your answer when to take CPP. These comments are on taking CPP at 65 vs 70 using $714 CPP average at age 65, but the same logic holds true for any age combination. At least I hope it’s logical!
Thought 1 – If you both take CPP at 65 that represents 20 763/75 000 = 0.277 27.7% of your income is bond like inflation protected going forward and takes some of the strain off of personal assets. If you delay you have to create the same fixed income portion from you personal assets for another five years. Is it not better to create more fixed income earlier then later in retirement?
Thought 2 – I think the more important metric is how do you make up the potential income lost by taking CPP early? Do you really need too? The cross over point (65 vs 70) is in your 79th year. If you live to 85 you leave about 30K on table. If you live to 90 you leave about 60K on the table.
If you take just a portion of your monthly CPP and invest it you can close that gap significantly. $200 invested monthly at 4.5% should create about 29K in 20 years (age 85) and 49K in 30 years (age 90). That almost wipes out the shortfalls and I would suggest makes them insignificant. You don’t have to invest to beat the the 8.4% annual CPP return, you have to invest to create enough income to make up the shortfall from age 79 to death.
I think that everyone should consider the delay CPP strategy. When it comes time to make that decision get as accurate numbers as possible and know how much you could potentially leave on the table.
Thanks Gruff. It’s great to see that financial flexibility shine through in my posts – it’s exactly what I’ve been working so hard for all these years.
We hope to have a post on Cashflows & Portfolios coming soon about CPP. It’s not an easy decision. I believe, and the math will prove this of course, but before taxes are considered I think you have to earn something like 7-8% YoY / every year, if taking CPP at age 60 or age 65 to “catch up” to what your fixed income, inflation-protected income would be at age 70.
Of course, to your point, the decision in taking CPP I believe comes down to two very important factors if known:
1. Do you need the money, to live from, and/or
2. How long might you expect to live?
If you need #1 – then you can’t take CPP and invest it, you need the money to live from first and foremost.
#2 is a massive wildcard but I totally get the break-even stuff 🙂
I’m of the mindset that you should really consider deferring CPP to age 70 unless you need the income for living expenses. There is no other way that I know of whereby you can get a 8.4% annual income increase on fixed income by deferring CPP.
When it comes to my DB pension, I don’t think I have any choice at my workplace. I must commute if I leave my employer before age 55 in my case so I figure that’s a decision that might already be made for me!! We’ll see.
When you are taking CPP? 🙂
I am taking CPP at 60. Cross over 60 vs 65 is in my 76th year. Money left on table at age 80 death is $17K, age 90 is $57K. I plan to take a portion of my CPP and invest in TFSA to close that gap. Our target income at age 60 will be >80K and almost 85% of that comes from inflation protected fixed income type assets like pensions.
My factors became:
1. When am I the mostly likely to make the best use of CPP money?
2. How much money was I willing to leave on the table?
3. Wife is older (5 years)
4. We spend less as we age, not more. I want to spend more early in retirement. ( the go go years)
5. Seen too many people die young (parent, cousin, students, colleagues, friends)
6. I stopped contributing to CPP mid 50’s and had used up all my drop out years.
7. We have a secure DB pension
8. Taking CPP at 60 gives a 14% boost to income.
9. I’ll pay less tax on the money when I can split CPP early and more tax when one of us passes. We were a single income family. Two people pay substantially less tax on 80K income vs a single person.
10. I still have a mortgage. Even though we have enough income to meet living expenses in retirement, I would like to lower the debt over time.
Had Doug run my numbers 60 vs 65. I never had any intention of delaying CPP to 70.
Keep up the fantastic work.
Doug is a sharp guy. I need to have him back on my site 🙂
When I think of taking CPP at age 60 vs. 65 vs. 70, I think of the following:
1. Do you need the money to support living expenses? (If so, must take!)… If you’re going to invest the money, that’s good, but that means you’ll need to earn at least 7-8% per year on average to get ahead.
2. What is your current health, family health history or any disabilities to work through? (If concerns to fight longevity, defer. If you believe you will die in your 70s or even early 80s, take the money.)
The crossover point sounds about right.
“If you believe your genes are good, and you have a strong chance to live beyond age 85, then depending if you need the cash it may be beneficial to defer CPP until age 70. This is only if you can afford to defer the income until age 70.
If not, if you can’t afford to defer and you need the money of course then take CPP when you can at age 60.”
Investing your CPP income is a totally different game since you’re taking bond-like income and converting that to more % equities. So, it can make sense to take CPP and invest the money but you need to make a decent return. I suspect a secure pension has made this decision an easy one for you – which is awesome of course my friend!
Trust me the decision was not easy and only time will determine if it was the best decision! Having the DB pension does change the thought process.
If you need the money absolutely take it, but what if you don’t?
Investing all or part of the CPP does move a portion from bond like income to equities exposing some of it to market risk. You are however still receiving bond like income for the rest of your life, perhaps just a smaller amount. That somewhat negates the longevity risk (outliving your money) advantage. By delaying from age 60 to 70 are you now not taking on the unpredictability of life risk before collecting CPP? That’s 10 years of avoiding the wife not murdering me in my sleep because I’m home so much.
Depending what investment vehicle I use also determines the amount of equity exposure. I don’t believe you need 7-8% annual return YOY to make up the shortfall. I think it’s much lower.
I’ll refer to my earlier example using average CPP at 65 of $714/month. I also used the taxtips CPP calculator.
Assuming a 15% tax deduction that would leave $607 to invest.
If I die at 90 and take CPP at 60 I leave 140K behind, take CPP at 65 and that is 60K left behind vs delaying and taking CPP at 70.
If I invest all $607 of the after tax money monthly I only need an average annual return of 3.1% to make up the 140K shortfall over 30 years. This might be because the advantage of delaying stops at age 70 yet I continue to feed the investment pile for an additional 20 years. Lots of investment instruments can beat 3.1%.
If I invest half of the CPP ($300), I then only need 5.1% annualized return over 30 years.
I recognize that not everyone has the privilege of being able to be flexible with what to do with CPP. I also appreciate the validity of delaying CPP by using your personal assets, especially if you have large RRSP’s. I’m just not convinced that delaying CPP to age 70 is that big of an advantage. Life is just way to unpredictable.
As always personal finance is personal. I learned that from you.
With respect – Gruff
Ha, I almost spit out my beer when I read this!
“That’s 10 years of avoiding the wife not murdering me in my sleep because I’m home so much.”
You might be interested in this – just published today thanks to your inputs 🙂
Of course, we made a number of assumptions but you can see that delay does have some advantages for sure.
You bet my friend, personal finance is personal. Time will tell if I too make the right decision. Heck, I might just take CPP at the traditional age of 65 to “have fun”. I’ve earned it 🙂
That is both a humorous post, and fresh way to look at this. I always say, it’s usually quite easy to create a simple savings portfolio, in whatever way you are personally comfortable. In the end if one persons strategy gets them 2% more than another’s, it really isn’t the end of the world. However IMO, solid tax strategy going into retirement, or thinking out of the box like you have here, is even more important. If you have a nice sized portfolio and you don’t start dealing with it a few years pre retirement, you could lose more money then you have to, to taxes, just from ignorance of tax laws and legal strategies that you may miss utilizing.
Great post as always Mark. Sounds like we’re on a similar trajectory… you’re aiming for 2024 while we’re aiming for 2025. Having DB and DC pensions from work will make the planning and transition a bit easier.
It would certainly be nice to get the $10k TFSA contribution limit again but I don’t see that ever happening.
What’s your plan with the 1-year worth of expense saving? Put the money in a high savings account or are you planning to utilize the GIC ladder?
Thanks very much my friend. We’re trending 🙂
Ya, I don’t think we’ll see a TFSA contribution bump to that, they didn’t even increase it by inflation this year like they said they would.
The government will do what the government will do!!
The plan for 1-years’ worth of cash savings is just that – keep that $$ in my corporation or in something like EQ Bank and draw on if/when needed. Not entirely sure what account I will use, could be a mix of personal and corporation cash but it will be cash, no GICs, no GIC-ladder, no bonds, no bond ETFs, etc. since I don’t want to worry about redemptions or other. Simply, if I want the cash for an emergency or other during my part-time life, I have it.
We put our emergency cash in a one-year redeemable GIC. Not the best interest, but a bit while we wait for the sky to fall. By the way, I have been retired for the past 10 years and have only occasionally needed to dip into this cash, and I have been able to replace it. I have a practice of adding a small monthly amount to our emergency stash, and it is amazing how quickly that small amount builds. For most of our married lives, we had only one income, with a modest DB pension. I had no alternative but to take CPP and retire early because of poor health at the time. The good news is that my health has improved greatly since having more time to exercise and prepare healthy meals in retirement, so I don’t regret the financial decisions I made.
Awesome, Jo. I enjoyed reading this part:
“The good news is that my health has improved greatly since having more time to exercise and prepare healthy meals in retirement, so I don’t regret the financial decisions I made.”
As for the 1-year GIC, I think that’s a great idea and every bit of interest can be valuable when it comes to cash/savings set aside.
Great plan, not unlike ours but yours is more sophisticated and I suspect also better than mine. Upon retirement we withdrew zero income from our portfolio because I could do about one day a week of light consulting to fund our $100K pre-tax annual spending. That worked great for the first five years and we stayed in balance with our income and spending. Starting this year I’m fully retired and we have Vanguard send us $5,000 each month from my IRA and Personal Capital send us $4,000 from our taxable brokerage account. So far that’s too much money so we may need to trim it back. In four years we’ll cut it back a bunch because our Social Security benefits will start at $72,000 a year (in 2021 dollars). We’ll then be at a less than one percent withdrawal rate. I haven’t done any tax optimization but do plan to do some ROTH conversions starting next year when my earned income will be very low.
That’s impressive to have any $100K pre-tax annual spending.
Are you using exclusively broad-market funds or ETFs to help keep growth alive in retirement? VTI/VOO or other?
I’m way too young for any social security/old age security in Canada so I will need to rely on my portfolio to fund semi-retirement for the next 20 years or thereabouts.
If your Social Security benefits are $72,000 per year, my goodness, that is good. What did you do to earn that?? 🙂 I suspect you would have had to have a high-paying job for many years for that since SS is a combination of max. income to a threshold and years of high income service.