Medicare and social security may not go as far as you expect in retirement
Most of us can expect some help from the government in the form of Social Security and Medicare when we retire, but we’ll still have to pay the lion’s share of the bill ourselves.
For decades, retirees have relied on these retirement insurance plans. Unfortunately, however, they are insufficient to retire on. We’ll explain why this is so and what you can do about it below.
Medicare is the federal health insurance program for anyone 65 and older. Medicare Parts A and B provide coverage for medical treatment, including hospitalization and doctor’s visits. Part D of Medicare provides coverage for medications that a doctor prescribes.
However, Medicare does not pay for long-term care, dental work, glasses or contacts, or hearing aids. The burden of paying for these expenses rests squarely on the shoulders of the retiree.
Estimates show that a typical 65-year-old couple retiring in 2022 will require around $315,000 (after taxes) to meet their out-of-pocket healthcare bills throughout retirement. Therefore, Medicare recipients will need supplemental insurance.
The financing dilemma facing Social Security is nothing new, as projections show that its trust assets will be drained by 2035. However, that doesn’t imply the program is going away. Every year, we all pay into Social Security through income taxes. However, this sum is insufficient to cover all the benefits to which Americans are entitled.
The Social Security Administration will be able to pay out roughly 80% of promised payments once the trust funds have been drained. If the government cannot find a solution, benefits may be reduced. That’s discouraging to hear, especially when Social Security benefits fall short of what most individuals need to support their monthly expenses.
HOW TO COPE WITH THE LIMITATIONS OF THESE RETIREMENT PROGRAMS
Even though we can’t do much to influence the rules regulating these programs, you can nevertheless take measures to guarantee that your retirement is comfortable.
1. Saving and Investing
Regardless of age, saving for retirement should be your number one goal. Putting down a modest sum every month can help you build a sizable nest by the time you reach retirement age.
2. Additional Health Insurance
Private insurance companies provide Medicare supplement plans to cover the costs that Original Medicare does not cover.
3. Medicare Advantage plan
This covers all the same items as Medicare and some more, so you’ll only have one monthly expense to worry about. You can locate them using the Plan Finder tool on Medicare’s website.
4. Increase your income today
If you want to increase your Social Security payments in the future, you need to increase your income. Your enrollment age dramatically affects the magnitude of your monthly payments. Nevertheless, it is recommended that you have a strategy for filing claims.
5. Wait till full retirement age
It would help if you waited until your full retirement age (FRA) to receive the benefit you earned based on your years of service. More years of benefits are available if you apply earlier than this, although each one is less. There is a slight monthly boost for those who want to delay their benefits until age 70.
It would be best if you claimed your benefits at the appropriate age, depending on your life expectancy and financial stability. People diagnosed with terminal illnesses typically enlist as soon as they reach the eligible age. Whether by choice or out of need, many people who live into their 80s and beyond begin receiving Social Security early. However, they can gain a far more enormous lifetime benefit by delaying their eligibility.
No matter how far off your retirement may be, it’s never too early to start planning for it. The trick is to adjust your plans as needed. Alterations to Social Security and other retirement programs are possible. As these things occur, you should reevaluate your retirement plan and make any required adjustments.
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After entering the financial services industry in 1994, it was a desire to guide people towards their financial independence that drove Aaron to start Steele Capital Management in 2013. Armed with an extensive background in financial planning and commercial banking coupled with a sincere passion for helping people, Aaron has the expertise and affinity for serving the unique needs of those in transition. Clients benefit from his objective financial solutions and education aligned solely with
helping them pursue the most comfortable financial life possible.
Born in Olympia, Washington, Aaron spent much of his childhood in Denver, Colorado. An area outside of Phoenix, Arizona, known as the East Valley, occupies a special place in Aaron’s heart. It is where he graduated from Arizona State University with a Bachelor of Science degree in Business Administration, started a family, and advanced his professional career.
Having now returned to his hometown of Olympia, and with the days of coaching his sons football and baseball teams behind him, he now has time to pursue his civic passions. Aaron is proud to serve on the Board of Regents Leadership for Thurston County as the Secretary and Treasurer for the Morningside area. His past affiliations include the West Olympia Rotary and has served on various committees for organizations throughout his community.
Aaron and his beautiful wife, Holly, a Registered Nurse, consider their greatest accomplishment having raised Thomas and Tate, their two intelligent and motivated sons. Their oldest son Tate is following in his father’s entrepreneurial footsteps and currently attends the Carson College of Business at Washington State University. Their beloved youngest son, Thomas, is a student at Olympia High School.
Focused on helping veterans and their families navigate the maze of long-term care solutions, Aaron specializes in customized strategies to avoid the financial crisis that care related expenses can create. Experience has shown him that many seniors are not prepared for the economic transition that takes place as they reach an advanced age.
With support from the American Academy of Benefit Planners – an organization with expertise and resources on the intricacies of government benefits – he helps clients close the gap between the cost of care and their income while protecting their assets from depletion.
Aaron can help you and your family to create, preserve and protect your legacy.
That’s making a difference.
Investment advisory services are offered through BWM Advisory, LLC (BWM). BWM is registered as an Investment Advisor located in Scottsdale, Arizona, and only conducts business in states where it is properly licensed, notice filed, or is excluded from notice filing requirements. BWM does not accept or take responsibility for acting on time-sensitive instructions sent by email or other electronic means. Content shared or published through this medium is only intended for an audience in the States the Advisor is licensed in. If you are not the intended recipient, you are hereby notified that any dissemination, distribution, or copy of this transmission is strictly prohibited. If you receive this communication in error, please immediately notify the sender. The information included should not be considered investment advice. There are risks involved with investing which may include market fluctuation and possible loss of principal value. Carefully consider the risks and possible consequences involved prior to making an investment decision.
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