We’re retired, have $70K and $3,780/month in Social Security. With health care costs — can we survive 20 more years?
If you and your partner are in your 60s and have $70,000 in savings, you don’t have a ton of money set aside for retirement. The good thing is, you do have Social Security, so if you have a $3,780 monthly benefit, you at least have some income you can count on.
Plus, some retirees even make it work with Social Security alone. In 2024, The Senior Citizens League found that 27% of seniors rely on Social Security for 100% of their income.
Unfortunately, seniors face many big costs — and health care is often one of the biggest. Spending on medical care alone could take up a huge portion of your Social Security benefit, so it’s not a surprise you’re worried about how you can cover your care.
Fortunately, you may have some options available to you. Here’s what you need to know to try and ensure your retirement money lasts.
If you have a nest egg of $70,000, your savings will provide you with only around $2,800 in income per year. That’s because you’ll likely maintain a safe withdrawal rate to avoid emptying your accounts — and most experts say that means capping spending at around 4% of your account balance in year one and making annual adjustments for inflation.
When combined with your $3,780 per month Social Security benefit, you’ll have around $48,160 per year in income from your savings and Social Security.
Unfortunately, data from the Federal Reserve reveal average expenditures on health care among those 65 and over total more than $8,000 per year.
Fidelity also found a 65-year-old retiring in 2024 needs around $165,000 saved to cover all of their out-of-pocket costs throughout retirement, while the Center for Retirement Research warns that only 75% of Social Security benefits remain after paying premiums and out-of-pocket costs for the median retiree.
All of these numbers paint a troubling picture given that you most likely can’t easily afford to spend upwards of 15% of your income just on medical costs — depending on which estimate you use.
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