If you are looking forward to retirement within the next couple of decades you are one of the many. A current demographic fact that is truly jaw-dropping is the oft-volleyed statistic that some 10,000 seniors are applying for Social Security every day.
What’s more, this volume is expected to continue for the next 20 years. This many people reaching retirement age all at once has the subject of health care for seniors getting a lot of attention. Most people simply assume that they will receive Medicare when they become eligible for Social Security, and they will no longer have to worry about paying for medical treatment out-of-pocket.
If you examine this matter a little more closely you’ll see that the above is not entirely true. Your full retirement age as the Social Security Administration sees it varies depending upon the year during which you were born. For people born between 1943 and 1954 the full retirement age is 66; after that it goes up two months per year until 1960. Those who were born in 1960 and later reach full retirement age for Social Security purposes at the age of 67.
So you receive Medicare simultaneous to becoming eligible for Social Security, right? Surprisingly, the answer is no. Everyone becomes eligible for Medicare when they reach the age of 65. And, Medicare is not an all-inclusive entitlement. There are separate “parts” designated A through D. If you have paid enough into the program Part A does not require an additional out-of-pocket outlay. But Part B, which covers doctor’s visits and outpatient treatment costs just over $100 per month.
It should be noted that Medicare does not cover long-term care expenses, but Medicaid will cover them under certain circumstances. To qualify for Medicaid you cannot have assets that exceed $2,000, but your house, your vehicle, and your personal possessions do not count against this figure. There are those who will “spend down” in an effort to obtain eligibility for Medicaid. This is the process of giving assets to your loved ones before you apply for Medicaid.
The best way to sort through all this and devise an intelligent health care plan for retirement is with the assistance of an experienced retirement planning attorney who has gained a comprehensive understanding of these health care resources for seniors.
Beware of Possible Cuts
There has been a lot of talk about the possibility of cutting Social Security, Medicare, and Medicaid in an effort to reduce the national debt. Indeed, spending on these programs comprises a significant percentage of all federal expenditures. These programs are frequently referred to as “entitlements,” but the fact is, you do not receive Medicare or Social Security unless you pay a sufficient amount into them. People are not actually entitled to them by virtue of their citizenship.
Those who are planning for retirement might say that they paid into these programs for decades and question why their contributions are not readily available. They may ask why it would require deficit spending for them to receive benefits in return for monies that they paid into Social Security and Medicare. And, anyone who dies before they become eligible to receive these benefits (and plenty of people die before they reach the age of 65 or 66) winds up getting absolutely nothing for his or her contributions, so you might think there should be a surplus.
There is a lot to consider when you analyze the matter, and with this in mind, the Kaiser Family Foundation conducted a poll a few years ago to find out how people feel about the possibility of cutting these programs. More than six out of every 10 people polled stated that they did not want to see any cuts to Social Security. About 57 percent of poll respondents stated that they did not favor cuts to Medicare, and half did not support reductions in Medicaid spending.
The bottom line is that regardless of how you feel about deficits and spending, Social Security, Medicare, and Medicaid are relevant if you are planning for your retirement. In order to make informed choices, you must understand what to expect from these programs, making this is a matter that is worth paying attention to as the debates rage on.
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Our Mount Clemens elder law attorneys are holding a number of seminars in the near future, and you are invited to attend the session that fits into your schedule. To obtain more information, visit our seminar page.