Balancing income and expenses with Social Security and Medicare
Creating a plan for taking Social Security and signing up for Medicare is a cornerstone of retirement planning. Yet these 2 programs—and their future solvency—remain among the biggest worries for people in or nearing retirement.
In fact, 60% of retirees say they are highly concerned about potentially reduced Medicare benefits in the future. Sixty-one percent say they are highly concerned about the same scenario for Social Security according to the LIMRA Retirement Income Reference Book 2018.
How much Social Security might cover may depend on when you select your benefits. Medicare costs can vary depending on your coverage elections. Everyone’s situation is different, and there’s no one right way to elect either.
To get you started thinking about these benefits, here’s a look at how the 2 programs may work together to impact your retirement income and expenses.
Social Security benefits
Social Security may provide a large portion of the income you'll need in retirement.
Your income depends on your benefits.
- Early vs. late election
- Continuing to work
- Spousal benefits
Medicare will pay a portion or your healthcare expenses in retirement but not all.
Your expenses depend on your elections, such as:
- Part A, B
- Medicare Advantage
- Medicare Part D
Ready to get started?
- Looking for estimates? Start visualizing retirement with your own info by visiting our planning tools and calculators.
- Have a Principal retirement account from your employer? Log in to principal.com to access personalized planning, sign up for our quarterly newsletter and more. First time logging in? Get started here.
- Interested in starting an individual retirement account (IRA) or consolidating other accounts into your existing one? Call 800-247-8000, ext. 2503 between 7 a.m. and 9 p.m. CT. Not familiar with IRAs? Here’s a refresher.
- Got a financial professional? They can help you figure out your next steps. If you’d like to meet with one face-to-face, we’ll help you find one.
1 Source: EBRI, December 2017.
The subject matter in this communication is educational only and provided with the understanding that Principal® is not rendering legal, accounting, investment advice or tax advice. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, investment or accounting obligations and requirements.
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