A recent study found that retirees are spending more than one-third of total Social Security benefits on out of pocket medical expenses in 2014. Even when considering other sources of income for retirees, medical spending took at least an 18% chunk of seniors’ retirement income.
A typical retiree can expect to outlay $4,274 each year on medical costs, not including those associated with long term care. Insurance premiums alone, according to the research published by the Center for Retirement Research at Boston College, made up two-thirds of that total because the premiums are extremely high.
Medical costs for Medicare beneficiaries are important to consider for anyone nearing retirement, since those expenses are expected to grow faster than increases in Social Security benefits beyond 2018.
Meaning that retirees have to put a growing portion of their social security income towards medical care. The primary take away from this research study is that even for those individuals who live on their own and did not use long term care, the expenses associated with medical out of pocket costs are extremely high and a large portion of their income and those spending numbers are only anticipated to grow in the future.
If you have questions about how to best protect the assets you have worked so hard to accumulate over the course of your life, and how to pass them on by minimizing taxes and ensuring a smooth transition, consulting with an experienced estate planning attorney in Massachusetts should be your next step.
The 66 million+ individuals receiving Social Security benefits will receive a 2 percent increase in their payments in 2018. More than 61 million Social Security beneficiaries will receive higher payments in January of 2018, and 8 million SSI recipients will get their higher payments in December of 2017. The government is responsible for analyzing cost of living adjustments across the U.S. and determining how inflation and other factors influence residents. This information is then used to calculate cost of living adjustments. Formal changes for Medicare have not yet been announced.
Social Security announced this week that 2015 benefits will increase by 1.7%. The increase is ties to the Cost of Living Adjustment, and will begin on December 31, 2014.
All changes to Social Security for 2015
I always liked receiving those statements in the mail every year detailing my Social Security benefits. It reminded me that, yes, some of the money I paid in taxes that year would eventually come back to me when I retire. Sure, I could have registered to view my benefits online, but I just liked getting those statements. If you feel the same way, I have some good news for you—the Social Security Administration will resume mailing them out this September.
Modern Social Security card. (Photo credit: Wikipedia)
There is a catch, however. The statements will only be mailed to workers aged 25, 30, 35, 40, 45, 50, 55, 60, and older. And, if you registered to view your benefits online, you will not receive the mailed statement.
Why did the Social Security Administration decide to resume mailing benefits statements? A recent article I found online (I know, somewhat ironic, isn’t it?) discusses several reasons. One is that only about 11 million people signed up to access information about their benefits online. Given that Social Security is a primary component of a secure retirement, it is important that people understand the benefits that will be available to them when they retire.
The Social Security Administration also received pressure from advocacy groups for the elderly and the paper industry. The executive director of Consumers for Paper Options, John Runyan, pointed out that millions of Americans have no Internet access, and therefore no way to verify the accuracy and amount of their benefits.
Fortunately, now they will.
If you want to set up online access – click here.