As an Independent Health Advisor, I regularly ask my clients about their Social Security monthly income. I also like to know if they have other sources of income to use for potential health-related needs.
The goal of Social Security is to supplement other sources of your income such as pensions, savings, and investments… during your retirement years.
Unfortunately, I often get calls from senior clients that rely solely on their Social Security to pay their monthly expenses. Living on Social Security alone can significantly reduce care options if an aging person gets sick or is no longer safe to live alone.
These clients are then faced with limited options to pay for additional care at home or in a retirement community.
I realize as a health advisor, Social Security can be daunting and quite a few technicalities exist. That’s why I’m taking this opportunity to break it down for you!
To qualify for Social Security:
- You earn credits when you work in a job that pays Social Security taxes.
- You need 40 credits (a maximum of four credits per year over 10 years) to be “fully insured.”
In the past, the full retirement age used to be 65, but full retirement benefits are now based on your birth year. Reduced benefits can also be collected at the age of 62 (approximately 25% less). If you wait to collect your benefits at age 70 your payout will be higher.
To understand this better, in 2019:
- If you wait to age 66 the maximum payout you could receive is $2861 (based on high wage earners).
- If you take the benefit at age 62 the maximum is $2209. At age 70 the maximum is $3770.
- As you can see in this example, waiting to age 70 offers you a significant increase in your monthly income from Social Security.
In 2018, the average social security monthly payment was $1400 or about $16,000 per year. The National Council on Aging reports that over 25 million Americans over the age of 60 are living below the Federal Poverty Level ($29,425 per year for a single person).
They also add that those living above the poverty level can be significantly impacted by one major life event such as a serious illness.
The bottom line, you’ll need more than Social Security benefits to be able to comfortably retire and to pay for unexpected medical expenses. To learn about your estimated retirement benefits you can download your Social Security Statement at www.ssa.gov/forms.
As a health advisor, I can also help you understand these benefits and guide you to what type of care you can afford. Please call today for a free 15-minute consultation.