Our elder law attorneys assist clients that are looking ahead toward their senior years and the twilight period that will follow. When you are planning for retirement, it is important to have a thorough understanding of the benefits that you will be able to receive. In this post, we will provide some very useful information about Social Security and Medicare.
Social Security Eligibility Age
The eligibility age for a full Social Security benefit depends on the year of your birth. If you were born in 1954 or earlier, you become eligible for Social Security when you are 66 years of age. It then goes up by two months per year, so if you were born in 1955, you would become eligible two months after your 66th birthday. This two-month per year graduation continues until 1960. At that point, it levels off at 67 for all applicants that were born during that year or later.
These are the parameters that are in place at the time of this writing in 2019. There are always ongoing discussions in Congress about the possibility of raising the age of eligibility for Social Security benefits. This is a situation that you should monitor on an ongoing basis so that you know what to expect.
You do not have to wait until you reach the age of eligibility for your full Social Security benefit. It is possible to accept an early benefit when you are as young as 62. However, you should certainly take pause before you go this route, because you would receive a significantly reduced benefit. The amount of the reduction would vary depending on your birth year, but it would be somewhere between 25 percent and 30 percent.
Even if you are willing to take a reduced benefit, you should take another factor into consideration. Most people are still working when they are in their sixties. At the present time, you could receive all of your reduced benefit if you do not earn more than $17,640 a year. If you make more than this, your benefit would be reduced by one dollar for every two dollars that you earn that is in excess of this limit.
There is yet another possibility with regard to the way that you accept your Social Security benefit. You are not required to submit your application as soon as you reach the age of full benefit eligibility. If you wait, you will receive delayed retirement credits that will result in an increase in the amount of your benefit when you finally do decide to accept it. The benefit will increase by eight percent for every year that you delay, but the accrual stops when you reach the age of 70.
Medicare Facts
Things are a lot simpler when it comes to the eligibility age for Medicare. If you have worked and paid taxes for at least 10 years, you will be eligible for Medicare coverage when you reach the age of 65. This will provide a strong health insurance underpinning, but there are out-of-pocket expenses that you should budget for in advance.
The program is broken up into four different parts. Medicare Part A is the portion of the program that pays for inpatient hospital stays. You do not have to pay a monthly premium for this coverage, but there is a per-benefit period deductible. This deductible is $1364 in 2019. There are also co-payments for hospital stays that are longer than 60 days, and they are considerable.
Medicare Part B pays for visits to doctors and outpatient treatments. Most people pay a monthly premium of $135.50 for this coverage during the current calendar year. Medicare recipients must pay 20 percent of costs that are covered under Part B out of their own pockets.
You can use Part C to apply your benefit to obtain coverage from an outside private insurer if you choose to do so. The part of the program that pays for prescription drugs is Medicare Part D. There are different approved plans, and they all come with deductibles, co-payments, and premiums.
In addition to the expenses that we have described above, there is another Medicare limitations that you should take very seriously. The program will not pay for long-term care, and most senior citizens will need help with their activities of daily living at some point in time.
Nursing homes and long-term care facilities are extremely expensive. Elder law attorneys help clients devise nursing home asset protection strategies.
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