What To Know About Funding Retirement With Social Security Benefits

Oklahoma City elder law attorneys can provide assistance in creating a retirement plan that allows you to have enough money to live comfortably during retirement. Making plans and implementing them as early in your career as possible is important because far too many seniors have too little money saved and end up struggling to live on Social Security benefits that are insufficient.  

Parman & Easterday provides personalized help with retirement planning. Our Oklahoma City elder law attorneys assist you in making use of tax-advantaged accounts such as IRAs that will allow you to build a nest egg you need so you aren’t reliant solely on Social security benefits.

To find out about the help we offer, call today. You can also read on to learn key facts about funding your retirement with Social Security benefits.

A Significant Number Of People Rely On Social Security Benefits Alone

According to the Social Security Administration, 39 percent of people currently do not have anything saved for retirement. Of current retirees, 51 percent of married couples and 71 percent of single people count on Social Security to provide for at least half of their retirement income.

Almost a quarter of married couples and 43 percent of single people rely on Social Security to an even greater extent, with Social Security benefits providing at least 90 percent of their income.  If you don’t have retirement savings, Social Security is likely to be your primary or only source of income because employer-provided defined benefit pension plans are few and far between for today’s workers.

Social Security Benefits Put You Barely Above Poverty Level

The average Social Security benefit for 2018 is just $1,404 per month. This would provide an income of only $16,848 per year. This is just a few thousand dollars above federal poverty levels. You could face financial struggles with an income this low, especially if you incur costly medical bills as many seniors do.

Affording Medical Care Will Be Difficult

Seniors spend a disproportionate amount of their income on medical care, especially as they get older or sicker. Unfortunately, Medicare doesn’t cover everything seniors need and often the coinsurance costs and premiums are difficult for seniors to pay if they opt for Medigap plans to get more coverage.

Even if seniors have a Medigap or Medicare Advantage plan, routine nursing home care and routine long-term care likely will not be covered. You could be forced to pay out of pocket unless you have made a plan to qualify for Medicaid, especially if you need expensive care that Medicare won’t cover. Medicaid is means-tested, so if you do not have a Medicaid plan in place, you could find yourself impoverished and your chance at a legacy long gone.

Social Security Raises Don’t Keep Up With Costs Of Living

While Social Security benefits often start out too low for many seniors to live on comfortably, problems with financial security only get worse. In some cases, seniors get a Cost of Living Adjustment which means their Social Security benefits go up a little bit because the cost of living has risen.

However, there have been numerous years when seniors didn’t get a cost of living adjustment at all. The decision whether seniors get an adjustment is based on CPI-W, a price index the Bureau of Labor Statistics uses to track how prices rise for urban and clerical workers. Their spending levels are different than seniors, so the cost of living adjustment may not keep pace with the rising costs seniors actually face.

You Could See Reduced Benefits If You Claim Your Benefits Too Early

If you claim benefits before full retirement age (FRA), which is 67 if you were born after 1960, you’ll see a reduction in Social Security benefits. Often, people have no choice but to retire early.  If you don’t have savings, you may have to claim benefits before you are ready, meaning you will receive a reduced benefit throughout your retirement.

Getting Help From Oklahoma City Elder Law Attorneys

Oklahoma City elder law attorneys at Parman & Easterday can work with you at every stage of your life to plan for a secure retirement. We help you to make plans for saving and for making effective use of IRAs and other qualified retirement plans when you are younger.  And we assist you in understanding the rules for withdrawals as a senior.

To find out how our firm can help you, join us for a free seminar. You can also call today at (405) 843-6100 or (913) 385-9400 or contact us online to get started on your personalized retirement plan.