The Blue Ash elder law attorneys at our firm help clients prepare for the eventualities of aging. This is always going to be a very valuable service, but at the present time, elder law attorneys are especially relevant. During the postwar years between 1946 and 1964, an inordinate number of babies were born. This phenomenon has been dubbed the “baby boom.”
If you do the math, you can see that these people are becoming senior citizens at the present time. This is causing an unprecedented aging of the population in the United States. To give you an idea of the volume of people that are attaining senior citizen status, the Social Security Administration is processing about 10,000 applications for benefits each and every day.
There are a lot of people that have questions about the government programs that are in place for senior citizens. In this blog post, we will take a look at three of them and provide brief answers so you can go forward with some additional knowledge to draw from as you look ahead toward the future.
When will I qualify for Social Security benefits?
This is a question that is more complicated than it may seem to be on the surface. The year of your birth will enter the picture, and you have some options with regard to when you choose to accept your benefit. It is possible to start to begin to receive a Social Security benefit when you are as young as 62 years of age, regardless of the year of your birth.
Though this may sound appealing at first glance, your benefit would be significantly reduced. Your birth year does impact the amount of the reduction. Suffice to say it would be somewhere between 30 percent and 35 percent at the time of this writing. Many people in this age group are still working, and there is an income limit, so this is another drawback.
Right now, you can earn $17,040 per year and still receive all of your reduced benefit. For earnings that exceed this amount, your benefit would be reduced by one dollar for every two dollars that you earn. Anyone that is earning a full-time living would probably do well to steer clear of an early benefit, because under most circumstances, they would receive little to nothing.
The age of eligibility for a full benefit depends on when you were born. For people born between 1943 and 1954, the age of eligibility is 66, and it then goes up by two months per year until 1960. Individuals that were born in this year and after become eligible to receive their full Social Security benefit when they are 67 years of age.
It is also possible to delay your application for Social Security eligibility. If you do this, you receive delayed retirement credits that increase your payout when you finally receive one. The increase is 8 percent per year, but it stops when you reach the age of 70, so there is no incentive to delay beyond your 70th birthday.
When can I start receiving distributions from my individual retirement account without being penalized, and will the payouts be taxed?
You can start to withdraw money from your account without any penalties when you are 59 ½ years old. If you have a traditional individual retirement account, the distributions will be subject to regular taxes. However, assets in a Roth IRA are contributed after taxes have been paid, so the withdrawals are not subject to taxation. We should point out the fact that you are required to start to take mandatory minimum distributions from a traditional IRA when you are 70 ½ years of age.
Does Medicare pay for everything when you are old enough to receive coverage?
The answer to this question is no, there are a number of different out-of-pocket expenses. There is a deductible per benefit period for hospitalization coverage, and there are copayments for especially long hospital stays. A monthly premium must be paid for Medicare Part B, which is the portion of the program that pays for visits to doctors. Plus, you have to pay 20 percent of the medical bills that are covered under Part B. There are also premiums, deductibles, and co-payments for the prescription drug portion of the program.
Obtain Your Copy of Our Free Worksheet!
We have a resource that you can tap into if you would like to become more prepared for the future. Our Blue Ash elder law attorneys have prepared a valuable worksheet that you can download free of charge, and we urge you to take advantage of this opportunity. To get your copy, click this link and follow the simple instructions.