It can be easy to go through life with the assumption that government benefit programs for senior citizens will provide you with a suitable retirement when you attain senior citizen status. In reality, the cold hard facts tell a different story, and you should understand them thoroughly if you want to be able to enjoy your golden years with comfort, opportunity and security.
Social Security Limitations
When it comes income, you may be under the impression that your Social Security benefit will be adequate when you put your working years behind you. In fact, the average benefit is quite modest, and even the maximum benefit is not going to allow for the lifestyle that you probably envision.
At the present time, the average monthly benefit for a single Social Security recipient is just $1,328, and the average for a couple is $2,176. The maximum Social Security benefit in 2015 is $2,663.
These benefit averages are for people who are receiving full benefits. It is possible to accept a reduced benefit when you are as young as 62, but the amount that you receive would be 25 percent to 30 percent less than your full benefit.
If you’re like most people, your Social Security benefit is not going to support a retirement lifestyle full of travel, leisure time, and quality time with your family.
Plus, there are no guarantees with regard to cost-of-living increases as the years pass. The Social Security Administration has recently announced that there will be no Social Security COLA for 2016.
Anything is better than nothing, but even when there is a Social Security COLA, benefit recipients do not see much of a change. In 2015 there was a 1.7 percent cost-of-living adjustment.
Health Care Implications
In closing, we should provide a little bit of information about Medicare. This government health insurance program for seniors will help, but there are out-of-pocket expenses to contend with including deductibles, co-payments, and premiums. You should consider these costs when you are asking yourself how far your Social Security payout will take you.
Plus, Medicare does not pay for long-term care at all, and most seniors will need it. Since nursing home care can cost upwards of $100,000 a year, the kind of money that you are going to get from Social Security is not going to be enough to pick up the tab.
We are not trying to paint a negative picture, because you may be able to provide yourself with an enjoyable retirement if you take the right steps in advance. Our firm can help you evaluate your options and devise a plan that maximizes your position as you keep your retirement goals in sight.
If you are ready to get started, send us a message through the following page to set up a consultation: Indianapolis IN Elder Law Attorneys.
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.
Latest posts by Paul A. Kraft, Estate Planning Attorney (see all)
- Can’t I Just Transfer Assets to My Adult Child If I Need to Qualify for Medicaid? - July 19, 2019
- What Type of Will Is Best for Me? - July 17, 2019
- Ways to Avoid Probate - July 15, 2019