Medicare and Social Security Benefits May Not Provide Enough Income in Retirement

While most retirees will need to pay for their retirement expenses independently, you can count on Social Security and Medicare for some support. These retirement essentials have helped retirees meet their expenditures for decades. But you can’t rely on them alone for retirement. 

Medicare gaps.

Medicare is a health insurance program funded by the government for people aged 65 and older. Parts A and B of Original Medicare cover hospital stays and medical visits. Medicare Part D, generally known as prescription medication coverage, can also be added. However, there is no coverage for vision care, dental, assistive devices, or long-term care in the original Medicare terms. Seniors are responsible for paying for these items.

Medicare also offers deductibles, co-payments, and premiums, similar to commercial health insurance. Therefore, even Medicare recipients need savings and investments to offset these costs.

According to data from Fidelity, a regular 65-year-old couple retiring in 2022 will need approximately $315,000 after taxes to pay their out-of-pocket healthcare costs, and this estimate does not include dental bills or long-term care.

Medicare Part A covers skilled nursing, inpatient hospital care, home health care, facilities, lab tests, surgery, and hospice. Speak to a doctor or qualified healthcare professional about why you require specific services or materials. Determine whether Medicare will cover them so you can plan ahead of time.

Is Social Security Heading for Insufficiency?

Social Security’s financial dilemma is not new, but it is becoming a more significant concern, with the most recent projections indicating that its trust assets will be exhausted by 2035. That does not mean the program is being discontinued. Most of its revenues come from the annual Social Security taxes enrollees pay. However, this revenue is inadequate to pay for all eligible American benefits.

Once the trust funds are gone, the Social Security Administration would be able to pay out no more than 80% of planned benefits. If the administration cannot devise a solution, benefit sanctions are possible. This is difficult to hear, given that Social Security already falls short of covering most people’s daily expenses.

What You Can Do

Medicare and Social Security leave a gap in your retirement plan, but you can still take steps to fill it. The essential thing you can do at any stage of your life is to prioritize your retirement savings. Even when you’re young, making regular monthly contributions is crucial to developing the nest egg you’ll need in retirement.

You can also choose to investigate additional health insurance options. Private insurers offer extra coverage to fill the gaps left by Medicare. Consider a Medicare Advantage plan as well. You’ll have only one monthly fee to worry about, including all the same benefits as Original Medicare plus some extras. You can utilize the Plan Finder tool on Medicare’s website to locate one of them.

Regarding Social Security, you can endeavor to increase your salary today to increase your Medicare benefits tomorrow. However, you should also consider your claim approach. The age at which you enroll considerably influences the check size you get.

You should wait until you attain full retirement age (FRA) to begin receiving the benefit you’ve earned, depending on your work history. That’s between 66 and 67, depending on your birth year.

Applying earlier than this will result in more years of smaller checks. You can also delay benefits until age 70, when your monthly payments will increase.

The appropriate age to file for Social Security depends on your life expectancy and financial status. Those with low life expectancies typically enroll as early as they become qualified at age 62. Also, many people who defer their benefits to 70 or beyond do so by preference or because they require help with their bills, even though deferring Social Security would likely increase their lifetime income.

Bottom line

Even if you’re still many years away from retirement, it’s a great idea to consider these issues now. But be prepared to change. Social Security could undergo significant adjustments in the coming years, and so could your retirement plans. When these developments occur, evaluate your retirement plan and make any necessary adjustments.

Contact Information:
Email: [email protected]
Phone: 3234811328

Bio:
For over 13 years, Jason Anderson has served as a Personal Financial Advisor, Estate and Retirement Planner, helping to educate individuals from all walks of life and income levels on wise money investment and planning for a comfortable lifestyle and retirement.

Over time, Jason Anderson has become the ‘Go-To’ leading authority on personal financial advising, financial planning, and analysis, as well as retirement planning and financial planning for SMALL BUSINESS OWNERS. He also provides HIGHLY Popular financial education seminars for groups. These financial seminars empower people to more effectively budget, plan, manage their money, and achieve their personal financial goals. As a result of the excellent results, praise, and feedback that their financial seminars have received, the City of Los Angeles, The AFL-CIO union groups, as well as several other organizations, have decided to partner with Jason to more effectively accomplish their mission. He was also honored to be showcased in the November 2014 issue of Forbes Magazine “Americas Financial Leaders” and has been dubbed by the media as ‘The Financial Educator.’

Jason is passionate about the work he does because it brings him joy to help his financial planning and advising clients reach their financial goals. He finds excitement in assisting families in saving and paying for their children’s college education without stress, thanks to the financial plans he designs for them. He also takes pride in witnessing clients reach retirement and enjoy it precisely the way they desire.

Personally, Jason finds joy in being a husband and father of two wonderful children. In his spare time, he enjoys traveling, sports, hiking, and reading.

He works with Employees, Business Professionals, Business Owners, and ‘High Net Worth’ People.

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Disclosure:
All annuity and life insurance products are designed to supplement securities as part of an overall plan. The recommendation of annuities and life insurance is not designed to eliminate the need for securities in any way.