Arm yourself with some of the facts so you are better prepared to support viable choices this political season that have a direct impact on your current or planned retirement lifestyle.
The two major federal transfer programs, Social Security and Medicare, are the central focus for federal budget reform as political campaigns heat up on both sides of the aisle. Both political parties have offered assurances that current age 65+ recipients will be protected, but it’s still early in a game where much is at stake. And for those nearing retirement or in their 40’s and 50’s there is even more uncertainty.
Medicare, top of the agenda, seems destined for significant change. The Super Committee’s failure to find agreement last November imposes a 2% cut to providers for starts. The 2010 Affordable Health Care Act, which generally strengthens Medicare, will also cut $500 billion in costs by cutting federal subsidies for optional Medicare Advantage plans over the next decade and freezing current income exclusion limits for Medicare Part B & D premiums, shifting more of the cost burden for these plans to subscribers, especially those with higher incomes.
Check out AARP’s 2010 Affordable Health Care Act fact sheets for information you should know before you vote. The AARP web site also has useful information about the current Wyden-Ryan Medicare proposal, which will cut more deeply into Medicare benefits if adopted.
Social Security is vitally important in retirement financial planning. It is the bedrock retirement income flooring for your retirement years. Regulatory risk now ranks alongside inflation and market risk as the major threats to your retirement financial plan. You should become as informed and active a voter as you can — regulatory changes will have a direct impact on your lifestyle.
Start with the AARP one-page Social Security fact sheets for the 50 states and DC, summarizing older population, income, benefits percentage of income, and the relationship of benefits to the poverty threshold. Excerpts from the NJ fact sheet:
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- One in six New Jersey residents receives Social Security.
In 2010, over 52 million Americans received Social Security benefits; of these, 1,440,943 lived in New Jersey.5In 2010, one in six New Jersey residents received Social Security. While 69% of beneficiaries are retirees, 31% are not: 110,859 are widows and widowers; 176,927 are people with disabilities; 54,287 are spouses; and 103,175 are children.
- Social Security pumps over 20 billion dollars into New Jersey’s economy.
In 2009, New Jersey residents received 20.6 billion dollars from Social Security. The average yearly Social Security benefit for a New Jersey retiree in 2009 was $15,172—or about $1,264 a month.
- Social Security lifts more than one-third of retirees from poverty.
In 2009, more than one-third (35%) of the nation’s older population would be living in poverty if they were not receiving Social Security. In New Jersey, 29% of state’s 65+ population would have incomes below the poverty line if they did not receive Social Security.
- Social Security is the only source of income for more than a quarter of New Jersey residents age 65+.
Social Security makes up 50 percent or more of the income for over half of New Jersey residents age 65 and older. More than a quarter of older New Jerseyans rely on Social Security as their only source of income.