Categories
Make Money From Home

Here’s How Much Income Retirees Have Left After Medical Costs – Money Talks News

A typical Social Security retirement benefit might look like a healthy chunk of change each month, but a new study says out-of-pocket medical spending can leave retirees’ finances precariously balanced.

Before most retiree…….

A typical Social Security retirement benefit might look like a healthy chunk of change each month, but a new study says out-of-pocket medical spending can leave retirees’ finances precariously balanced.

Before most retirees even get their benefit payment, a recently increased Medicare Part B premium is deducted. They may pay premiums for a Medicare Advantage (Part C) plan, Medicare supplement or Part D prescription drug plan, too.

Seeing a doctor or need a treatment? Retirees face co-pays and cost-sharing outlays. And don’t forget Original Medicare doesn’t cover dental cleanings, fillings and dentures. Routine eye exams from the optometrist for new glasses and contact lenses? Forget about it! Original Medicare won’t pay a dime.

These and other out-of-pocket health expenditures add up to an unhealthy bite out of retirees’ Social Security benefits, says a study — titled “How Much Does Health Spending Eat Away at Retirement Income?” — from the Center for Retirement Research at Boston College.

“For the typical (or median) retiree, one-quarter of their Social Security benefit goes toward these medical costs,” Melissa McInerney, Tufts University economics professor and lead study researcher, tells Money Talks News.

In other words, the typical retiree has only 75% of their Social Security income left after paying for medical expenses.

For those with 401(k) plans, individual retirement accounts or other income beyond Social Security payments, the study found that 88% of the typical retiree’s total income remains after deducting out-of-pocket health costs. The share of income remaining is lower for women and those in low-income households, it concludes.

“This shows how important it is for today’s retirees to have other sources of retirement income in addition to their Social Security benefit,” McInerney says.

Researchers analyzed data for 2018, a pre-pandemic year, from 5,340 retirees aged 65 and up on Social Security and Medicare but with no workplace-sponsored health coverage. Their information came from the latest figures available in the biennial University of Michigan Health and Retirement Study of more than 20,000 Americans aged 50 and up. Analysts calculated how much Social Security benefits and total income are available for nonmedical spending — such as food, housing, transportation and utilities — and how outcomes differ by gender, age, health status and household income. They excluded long-term care costs to focus on the impact of out-of-pocket spending in a retiree’s typical year.

Median out-of-pocket health expenses were $4,311 in 2018, they found. That year, Social Security retirement benefits averaged $1,461 a month.

“It is understandable why many retirees likely feel that making ends meet is difficult,” the researchers concluded.

In 2022, the standard monthly premium for Medicare Part B jumped 14.5% to $170.10, up $21.60 from $148.50 in 2021. Meantime, the annual deductible for all Medicare Part B beneficiaries rose to $233, a $30 increase. …….

Source: https://www.moneytalksnews.com/heres-how-much-social-security-income-retirees-have-left-after-medical-costs/

Leave a Reply

Your email address will not be published. Required fields are marked *