Adding a Social Security and Medicare Safety Net Into Your Retirement Plan

Today, financial planning for retirement and keeping your money safe is quite different than in the past. One reason is that many companies have done away with pensions, leaving the responsibility to the employee or retiree to ensure they have enough income and the safest investments for a comfortable retirement . Another reason is the longer life expectancy of today’s retirees. This has many retirees asking: “Is Social Security enough?” and “Should I invest in an IRA vs. a 401k?” Now more than ever, it is imperative to coordinate the “safety net” of Social Security and Medicare to create the safest retirement plan you can build. WHY SOCIAL SECURITY COULD BE YOUR MOST VALUABLE ASSET When asked about their most valuable asset, many people answer that it is their home or their retirement savings. In many cases, your Social Security benefit is the most vital component of any good retirement plan, especially if you live a long life. That is because Social Security pays benefits for as long as you live (and your spouse or other survivors, if applicable). For average wage earners, Social Security will typically replace about 40% of pre retirement earnings . But there are some safe money retirement planning techniques you could use to maximize your Social Security,

allowing you to bring in much more income throughout your retirement years. Along with Social Security, Medicare provides benefits to older Americans. This health insurance program covers the cost of hospital stays, doctor visits, medical supplies, equipment, and various other items and services. Given that people now live longer lives coordinating the Social Security and Medicare “safety net” is one of the best retirement strategies , as these benefits can help ensure you will have guaranteed retirement income and medical care for the remainder of your life. WHO IS ELIGIBLE FOR SOCIAL SECURITY? To be considered eligible for Social Security retirement income benefits, you or your spouse must work in a job that pays into the Social Security program. When you, your spouse, or both of you work and pay Social Security taxes, you will earn “credits” towards Social Security benefits. Anyone born in 1929 or later is required to earn 40 credits to be considered fully eligible for Social Security retirement benefits. In 2021, for instance, one Social Security work credit is earned for every $1,470 of earnings. You are allowed to receive a maximum of four credits per year. So, it takes ten years of working and earning these credits to become fully eligible.

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