(Washington, DC) –Medicare costs are taking an increasing share of the Social Security benefits of retirees far more quickly than experts predict, according to a new survey from The Senior Citizens League (TSCL). Forty-one percent of survey participants said they spent more than one-third of their Social Security benefits on Medicare premiums and out-of-pocket healthcare costs in 2015. The number of those who say their healthcare costs took more than one-third of their Social Security benefits has jumped 12 percent from 29 percent just two years ago.
The trend appears to be occurring far more rapidly than government experts expect. The Medicare Trustees recently estimated in their 2016 report that average premiums for Medicare Part B and Part D, as well as out - of - pocket costs, would take about one - quarter of the average Social Security benefit this year, an amount they estimated will increase to one – third of the average Social Security benefit by 2090 — 74 years from now.
“The findings illustrate the financial hit to retiree incomes when healthcare costs climb but Social Security cost – of – living adjustments (COLAs) remain flat,” says TSCL Chairman Ed Cates. “This trend has big implications for whether the financial resources of today’s older Americans will be sufficient to last a 25 - or - 30 year retirement,” Cates says. Social Security provides more than half of total income for 61 percent of beneficiaries, according to the Social Security Administration.
“Rapidly rising Medicare costs are a major reason for expanding Social Security benefits now to provide modestly higher benefits and greater retirement security,” Cates says. TSCL believes more adequate retirement benefits will be needed by a majority of people at or nearing retirement. A number of national studies indicate that millions of older Americans are entering retirement without the financial resources to cover longer retirements. A 2015 report from the U.S. Government Accountability Office says about one - half of households 55 and older have no retirement savings, and many of those that do run the risk of falling short of income.
TSCL supports legislation that would expand Social Security by providing modestly higher monthly benefits and more fair and accurate COLAs. To pay for this, TSCL surveys indicate that a majority of older voters support raising the taxable maximum cap on wages. Currently, high earning people pay no Social Security taxes on earnings over $118,500. “Social Security can be made solvent for another 50 years, and retirements more secure, if everyone paid their fair share, ” Cates says. To learn more and to participate in TSCL’s surveys, visit www.SeniorsLeague.org.
With 1.2 million supporters, The Senior Citizens League is one of the nation’s largest nonpartisan seniors groups. Its mission is to promote and assist members and supporters, to educate and alert senior citizens about their rights and freedoms as U.S. Citizens, and to protect and defend the benefits senior citizens have earned and paid for. The Senior Citizens League is a proud affiliate of The Retired Enlisted Association. Visit www.SeniorsLeague.org for more information.