When you envision retirement, you probably think about the spare time that you will have to enjoy all the things that you have been putting on the back burner throughout your working career. As you are devising a retirement plan, you may be thinking about travel, leisure activities, and the things that you will be able to do for your family.
This is well and good, and you should certainly do everything possible to prepare yourself for an enjoyable retirement. This being stated, the only way to do it effectively is to be fully aware of the relevant factors, and we will share four of them here.
Social Security Benefits Are Limited
You cannot rely on your Social Security benefit alone to finance a comfortable retirement. At the time of this writing in 2019, the average monthly Social Security payout is $1461 a month. This factors out to just over $17,500 per year. For a married couple, the average benefit is $2448 monthly.
The maximum benefit is $2861 for an individual taxpayer, and this is not exactly king’s ransom, but even if it was sufficient, very few people qualify for the maximum.
Medicare Won’t Pay for Everything
You may be under the impression that you really don’t have to worry about the health care expenses that you will incur when you attain senior citizen status, because you will be qualified for Medicare coverage. This program will certainly help with things that are covered, but you should be aware of the fact that there are out-of-pocket expenses that can be relatively significant.
The program is broken up into four sections. Medicare Part A is the portion that pays for inpatient hospital stays. There is no monthly premium, but there is a per benefit period deductible, and there can be very high co-payments for especially long stints in the hospital.
Part B covers visits to doctors and outpatient treatment. There is a monthly premium, there is a deductible, and you are responsible for significant coinsurance. The program will only pay for 80% of Medicare approved services.
Medicare Part C allows you to apply your benefit toward a Medicare Advantage plan that can be purchased from a private company that would provide more comprehensive coverage. The prescription drug portion of the program is Medicare Part D, and there are premiums, co-payments, and deductibles that must pay yourself.
In addition to the co-payments, deductibles, and monthly premiums, there is a very big hole in the coverage. The Medicare program will not pay for long-term care. If you ever need help with your activities of daily living, you cannot look toward Medicare for financial assistance.
Most Seniors Will Need Long-Term Care
If you are not particularly concerned because you are under the impression that you will probably never need long-term care, you should understand the facts. There is a very useful website that is maintained by the United States Department of Health and Human Services called longtermcare.gov.
According to the site, 70% of seniors will need living assistance, so it is likely that you will require long-term care eventually if you are fortunate enough to obtain senior citizen status.
Long-Term Care Is Very Expensive
Getting out a pen to write a check to pay for nursing home care can be a rather disturbing experience if you want to be able to leave behind a meaningful legacy to your loved ones after you are gone. Here in the Cincinnati area, a year in a nursing home can cost well in excess of $100,000, and people often require multiple years of care.
If these facts have gotten your attention, we have some good news to report: there are solutions that can be implemented to protect your assets from devastating nursing home costs. If you would like to explore them, contact us through this page to set up a consultation: Cincinnati Medicaid Attorneys.