Dallas County Living Well Magazine November/December 2018 | Page 23

SOCIAL SECURITY AND MEDICARE:
PLANNING BEYOND THEIR LIMITS
O
By Leu & Peirce, PLLC
n August 14, 1935, on the heels of the
Industrial Revolution and the Great Depression,
President Franklin D. Roosevelt signed the
Social Security Act into law. The Act created
a “social insurance” program designed to pay
workers 65 and older a continuing income after retirement.
Fast forward almost a century, and Social Security remains
an integral part of the retirement plan of almost every
American worker.
Social Security retirement benefits are individualized: the
amount you receive depends on the amount you earned
throughout your career, and your age when you begin
receiving benefits. When you work and pay Social Security
taxes, you earn credits toward Social Security benefits. An
individual born since 1929 needs 40 credits, or 10 years of
work, to qualify for retirement benefits. The more you earn
during your working years, the higher your benefits will be.
Full retirement age depends on birth year. Full retirement
age was 65 for many years, but began increasing monthly
in 2000, and is 66 for those born from 1947 to 1954.
Full retirement age begins increasing again in 2020; for
anyone born in 1960 or later, full retirement age will be
67. Individuals who elect to receive their retirement benefits
before full retirement age will receive reduced monthly
benefits.
If you have not worked, or do not have enough Social
Security credits to qualify for your own retirement benefits,
but you are married or were married for at least 10 years,
you may still qualify for spousal benefits. To qualify for
spousal benefits, you must be at least 62 years old (60 if
widowed) or caring for a child entitled to receive benefits
on your spouse’s record (younger than 16 or disabled). If
the latter, you may qualify for spousal at any age. Your full
spousal benefit could be up to one-half the amount your
spouse is entitled to receive at full retirement age.
Additionally, even if you have enough credits to qualify for
retirement benefits on your own work history, you may still
apply for spousal benefits if your amount is lower than half
of your spouse’s benefit. The Social Security Administration
provides a helpful online tool called the Retirement Estima-
tor (www.ssa.gov/estimator), which provides personalized
retirement benefit estimates and calculations of various sce-
narios to compare your options.
One aspect of retirement that has changed dramatically
over the years is the financial impact of funding long-
term care needs as life expectancy has increased.
Currently, 70% of individuals turning 65 will need
some form of long-term care in their remaining years.
Long-term care costs range from $3,000 to $16,000/
month in the DFW area. Social Security was simply not
designed to provide sufficient income to support such
extensive costs.
Unfortunately, Medicare was also not designed to pay
for long-term care. Signed into law in 1965 by President
Lyndon B. Johnson, Medicare was another type of “social
insurance” designed to serve as a basic health insurance
program for all individuals age 65 or older who had paid
into the system. Traditional Medicare consists of two parts,
Part A and Part B. Medicare Part A provides coverage for
in-patient hospital care and was funded by the Medicare
taxes paid. Medicare Part B is an optional medical
insurance program that covers medically necessary
services and supplies, and for which participants pay
a monthly premium, which typically is deducted from
their Social Security benefits. Contrary to popular belief,
no Medicare program, whether traditional Medicare,
Medicare Advantage, or a Medicare supplement plan,
covers long-term custodial care. For example, Medicare
does not pay for the cost of assisted living or memory
care, and only pays for a portion of skilled nursing care
following a hospital stay of at least three days. Even then,
the maximum paid by Medicare for skilled nursing is 100
days. All individuals approaching retirement age should
have a plan in place for funding their long-term care
needs, beyond Social Security and Medicare.
As you contemplate retirement, it is important to understand
fully the benefits you can expect to receive under Social
Security and Medicare. It is even more important to
understand the limitations of these two programs, so you
can prepare adequately. For a better understanding of
available planning options for funding your retirement and
long-term care, and to find an Elder Law attorney in your
area, go to www.naela.org.
Lori Leu, Erin Peirce, Lauren Olson, Laura Chavero, and Brisha Gardner are Elder Law Attorneys with Leu
& Peirce, PLLC in the North Dallas area. They can be reached at 972-996-2540.
DALLAS COUNTY Living Well Magazine | NOVEMBER/DECEMBER 2018
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