There are people who are not that concerned about planning ahead for retirement. They assume that they will naturally accumulate resources over the years without actually trying. And they also feel a sense of comfort because they know that they will be eligible for Social Security and Medicare eventually.
The above line of reasoning can result in some very challenging circumstances during the latter portion of your life.
You have to understand the fact that Social Security is going to provide a relatively small income stream. The amount of your benefit is determined based on the extent of your earnings over the 35 years during which you earned the most.
You can find out exactly what you can expect by establishing your account on the Social Security website. Your statement is always available to you once you register.
When you find out your anticipated benefit amount, you will see the limitations of Social Security income.
In addition to the fact that the income is relatively modest, you also have to contend with the ever-increasing out-of-pocket Medicare expenses.
Medicare does not come for free. There is a deductible for Medicare Part A, which is the section that covers hospitalization. In 2012, the deductible is $1,156, and it will be $1,184 in 2013.
Medicare Part B covers outpatient care and visits to your physician. You have to pay a premium to receive this coverage, and the monthly premium is going up by five dollars in 2013. Additionally, the Medicare Part B deductible is rising from $140 up to $147.
Co-payments for long hospital stays are also rising in 2013.
Intelligent long-term financial planning is necessary for serious minded individuals who want to be able to absorb these types of expenses comfortably. If you do not currently have a plan in place, right now would be a good time to set up an appointment with a good San Jose retirement planning lawyer.