How Social Security and Medicare Affect Your Retirement Income

Needless to say, finance and healthcare can be two of the most complicated aspects of your life. One is tied to the other, as costs can affect your choice of coverage and your budget can influence your preferred health insurance plan. Hence, Social Security and Medicare are two of the most important topics amongst seniors.

Although things are always subject to change, there are important decisions you have to make that can have a major impact on your retirement.

Within the last decade, studies show that Americans are living longer. From 2005 to 2015, there has been an 18% increase in people 85 and older. (4.5M in 2005 to 6M in 2015) (SSA.GOV)

It’s important to note that Social Security may provide a large portion of the income you will need in retirement.

Social Security will only replace a portion of your income in retirement. 40% from Social Security and 60% from Pensions & Personal Savings. (SSA Annual Statistics)

Medicare pays a portion of your healthcare expenses in retirement, but not all….

And we all know how expensive healthcare can be…

$283,000 is the amount a couple (age 65) may need to cover their healthcare costs in retirement. (Employee Benefit Research Institute)

What makes it worse is that healthcare costs will increase each year.

According to the National Health Expenditures, the average cost of healthcare in 2010 was $8,250. It will skyrocket to $13, 575 by 2020. (That’s more than double the average rate of inflation.)

The U.S. Bureau reports that healthcare represents a greater share of income as you age.

  • Ages 44-54 (6%)
  • 55-64 (8%)
  • 65+ (13%)

Medicare only covers ½ of your healthcare costs and then you pay the rest. Sounds like a deal breaker huh?  You pay 49% out of pocket and Medicare pays the other 51%. (EBRI)

Now that you know this info, it’s important to make informed decisions.

Your income depends on your benefits.

  • Early vs. Late Election
  • Continuing to Work
  • Spousal Benefits

Your expenses depend on your elections.

The new Medicare Plus Card saves you up to 75% on things not covered by Medicare

Medicare doesn’t cover everything. Luckily, those on Medicare can now start saving on out of pocket expenses like prescription drugs, dental, vision, hearing, and more. Over 1 million people have already received their free Medicare Plus Card.

Get your Free Card Here

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