As we age, the need for health care services rises. And millions of Americans depend on their Social Security benefit to cover the cost of such care.
About two-thirds of retirees — 66% — spend more than $375 a month on health care costs, a recent survey by The Senior Citizens League (TSCL) found. That amount is equivalent to roughly one-quarter of the average Social Security benefit of $1,523 per month, TSCL reports.
In addition, 31% of retirees surveyed spend more than $1,000 monthly on health costs, which is about two-thirds of the average Social Security benefit.
TSCL notes that spending on such care can be burdensome for retirees who do not have adequate savings to cover daily living costs. In an announcement, Mary Johnson, a Social Security and Medicare policy analyst for The Senior Citizens League, says:
“These findings are particularly troubling considering that the Government Accountability Office estimated in 2019 that 48 percent of households aged 55 and older have no retirement savings or other form of pension outside of Social Security.”
TSCL points out that the cost of the Medicare Part B standard premium for 2021 will be $148.50 per month — a rise of $3.90 per month. As we have reported, passage of a recent federal law capped the Part B premium increase for 2021, keeping it relatively modest, especially compared with the $9.10 monthly increase that retirees endured this year.
Still, the TSCL says even this small $3.90-per-month bump can be tough on seniors whose income is stretched thin. For that reason, the organization is advocating for Congress to pass the Emergency Social Security COLA for 2021 Act, federal legislation that would replace the currently planned 1.3% Social Security cost-of-living adjustment (COLA) with a “more adequate” 3% COLA for 2021.
Getting more from Social Security and other retirement income
If you are a retiree, your options for quickly boosting income to cover costs may be limited to something like taking on a part-time job. For more on that, check out “7 Tips for Getting a Great Part-Time Job in Retirement.”
However, if you have not yet reached your golden years, it is wise to learn from what’s happening to today’s retirees so you can better plan for your own future retirement.
Opening up a health savings account — if you are eligible to do so — is one way to make sure you will have enough money to cover health care costs in retirement. As we have reported in the past, it is possible to build up HSA savings during your working years, and to then use those funds to cover medical costs during retirement.
If you don’t have an HSA provider, consider Money Talks News partner Lively. Money Talks News contributor Miranda Marquit talks about her experience with Lively in “3 Ways a Health Savings Account Can Improve Your Finances.”
Calculating the best age at which to begin claiming Social Security benefits also can make a big difference to your bottom line in retirement. So, stop by Money Talks News’ Solutions Center and learn more about partner Social Security Choices, which provides a personalized analysis of various Social Security claiming strategies.
Social Security Choices sells its product for $39.99. But Money Talks News readers can do better. When buying a report, simply use the code “moneytalks,” and you’ll save an additional $10.