Retirement planning is very important if you don’t want to find yourself on a very tight budget during the latter portion of your life.
Living on a fixed income can be very challenging, and Social Security alone is really not enough for most people. And even if you could get by on Social Security on the day that you retire costs inevitably go up and cost-of-living adjustments are very modest to say the least.
In fact, in 2010 and 2011 there was no Social Security cost-of-living adjustment at all. In 2012 the COLA was 3.6%, and in 2013 the adjustment is going to be 1.7%.
A slight increase in the monthly benefit that seniors will be receiving is hardly going to be noticed, but on top of that the out-of-pocket costs that Medicare recipients must pay will be rising in 2013.
A lot of people are under the impression that Medicare comes for free, but this is not the case at all. It is divided into different sections, and the Medicare Part B component covers visits to doctors.
You have to pay a monthly premium to enjoy Medicare Part B coverage, and this premium is going up by five dollars per month in 2013. Though nobody wants to pay more this is actually significantly less than the nine dollar increase that was predicted.
In addition to the higher Medicare Part B premiums the deductible is going up to $147 . It was $140 in 2012.
Medicare Part A pays for inpatient care. There is a deductible that must be paid for Part A, and in 2013 it is rising from $1,156 to $1,184.
If you are in a comfortable financial position these small increases and limited adjustments will not impact your quality of life. However, if you fail to plan ahead circumstances can get progressively more challenging for you during your twilight years.
Paul A. Kraft, Estate Planning Attorney
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.
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