At 85, You Don’t Want to Find that You Can’t Pay Your Bills

At 85 You Don’t Want to Find that You Can’t Pay Your Bills

 If you have not retired yet, let me ask you

How Financially Prepared Are You for Retirement?

Study after study reveals that very few Americans are financially prepared for retirement. The company they worked for does not have a pension plan. They have very little in savings and investments. They will have to rely on the monthly benefit they get from Social Security for most of their monthly income.

We here in Tennessee are no different.

Let’s dive into this more deeply.

We are living much longer. A 65 year old without a serious medical condition today can expect to live until they’re about 85.

Here’s the Big Question

Will an 85 year old who has to rely on their monthly Social Security Benefit for most of their monthly income be able to afford the same lifestyle they have now? Will they have to rely on their children and grandchildren for financial help because they can’t pay their expenses?

Social Security has Cost of Living increases built into it. As the Cost of Living increases, the monthly Social Security benefit is supposed to increase at the same rate. That is to keep their benefit even with the increases in the Cost of Living.  Annual increases are made in January. Retirees are not supposed to suffer financially.

Regularly there are reports there is not enough money going into Social Security to make monthly payments to retirees. At a certain point Social Security is going to run out of money.

One way lawmakers have pushed the date Social Security will run out of money further down the road is to change the formula for determining the Cost of Living adjustment. They did this several years ago. Here is what the Cost of Living Adjustments have looked like since 2009.

Cost of Living

Year                                                                                  Increase

2009                                                                                     0.0%

2010                                                                                     0.0%

2011                                                                                     3.6%

2012                                                                                     1.7%

2013                                                                                     1.5%

2014                                                                                     1.7%

2015                                                                                     0.0%

2016                                                                                     0.3%

2017                                                                                     2.0%

These increases have not come anywhere near the actual increases in the cost of housing, utilities, groceries and clothing since 2009. A person who started receiving their monthly Social Security benefit in 2009 actually has seen the amount they could buy with their monthly check shrink. They are actually falling behind.

Is There Anything You Can Do to Protect Yourself?

 You have to maximize your monthly Social Security benefit.

Your monthly benefit is calculated from the amount you paid into Social Security during your working years. The amount you pay in yearly is based on your earnings during that year.

There is no way you can go back and change what you earned 20, 10, or 5 years ago or even last year. Right now, your monthly benefit will not increase significantly if you suddenly make much more money.

For those of us born between 1943 and 1954, we cannot receive our full Social Security benefit until we’re 66. You can start to receive benefits at age 62. However, the monthly benefit is reduced. It is much lower at 62 and then increases slightly every month from then until the full benefit is reached at age 66.

What Many Don’t Realize . . .

. . . is they can delay when they start to receive their full Social Security benefit.  For each year they elect not to start receiving benefits between their 66th and 70th birthdays, their maximum monthly benefit increases by 8%. If they elect not to start their benefits until they’re 70, their monthly benefit will be 32% higher than it would be if they elected to start at 66.

What Does That Look Like?

Say your monthly Social Security benefit at age 66 is $1,855.  If you delay starting to receive it until you are 70, your benefit will be $2,449 a month. That is $594 a month more. That adds up to $7,128 more each year.

The most common way to do this is to continue to work until you’re 70.

There is another way.

No one ever wants this to happen. At times a spouse dies. If the surviving spouse is over 60 years of age, they may be eligible to receive monthly Social Security benefits on their deceased spouse’s record.  These are Survivor Benefits,

If the surviving spouse was born between 1943 and 1954, they would get the full deceased spouse’s benefit if they elected to receive them at 66. If they are under 66, they would get a reduced benefit.

During the time they are receiving Survivor Benefits, they can leave their own benefit untouched. It will grow 8% each year until their 70th birthday,

Prior to their 70th birthday, they can look at what their own benefit is. If that is more than the Survivor Benefit they are receiving, they can arrange to switch and take their own monthly benefit from 70 on. Their Survivor benefit will stop.

The People at Social Security Are Very Helpful

They want each person to know their options. They explain these to them very clearly.

As you approach retirement, make sure you know the options available to you. Remember – once you elect to receive your monthly Social Security benefit, you may not be able to change it.

Over time you may see your buying power decrease. Your benefit may not go as far as it did originally because the Cost of Living Adjustments were less than the increases in what it costs you to live.

None of us ever want to have to rely on our children or grandchildren for financial support in our later years. We may have to if we don’t plan properly.


If you have any comments about what you have read here, I’d like to hear them. So, please email them to me. Also – if you have any ideas about subjects you would like to see discussed in future posts, please send me an email and let me know. My email address is