Around 72 million Americans rely on Social Security benefits, making them a crucial part of the country’s foundation. Worryingly, over 50% of adults aged 65 and higher rely on Social Security benefits for at least 50% of their household income, while another 25% rely on them for 90% or more of their monthly income.
Because the program has so many dependents, the fact that men cannot make ends meet on their benefit alone is even more alarming, as there are many expenses that come with aging that necessitate a substantial nest fund that just does not exist.
According to Steven Bosworth, a financial counselor and managing director at Bosworth Financial Group, seniors who rely solely on Social Security may not be able to afford some expenses during retirement. The following are some of the most prevalent.
Medical Care expenses on Social Security
Perhaps the most crucial expense for the elderly is also one of the most costly. Americans spend about $12,000 per year on health-care costs, making them the most costly country in the world. However, this is the average, and individuals with chronic and substantial medical conditions pay even more. As Bosworth notes, “Medical expenses can skyrocket, and if retirees can’t afford medical care, they won’t get the proper treatment that they deserve.”
While government programs like Medicare and Medicaid cover some costs, individuals must still pay for out-of-pocket charges, monthly premiums, and prescription drugs.
T. Rowe Price estimates that the average retiree with regular Medicare, Medigap, and Medicare Part D (prescription medicines) spends $900 per year, with 10% spending more than $4,200. And this is after coverage.
Long-term care, cosmetic operations, dental or denture care, eye tests, and concierge care, all of which are required for some ailments, are also not covered by government programs.
Vacations
According to Bosworth, pensioners on Social Security cannot afford to take holidays because they rely on it for living expenses.
According to Value Penguin, the average person spends approximately $3,251 for a 12-night overseas trip, while a four-night domestic trip costs around $581. With an average Social Security payment of $1,907 in 2024, many travels, even domestically, may not be feasible due to additional expenses.
Car Maintenance
Bosworth also classifies this as unaffordable, stating that “maintaining a vehicle can be expensive as the cost of repairs usually requires you to pay hundreds of dollars or more at one time.”
According to CarInsurance.org, the average cost of yearly maintenance ranges from $1,200 to $1,800. Annual repairs, such as battery changes or new tires, typically cost around $500.
These expenditures are not always as high, and reliable and newer automobiles may require less maintenance, but every car eventually needs to be serviced. While purchasing an extended warranty or coverage through a private insurance provider can reduce prices, it remains an added expense.
Homeowners and Car Insurance
Insurance is expensive and increases year, making it unaffordable for those on fixed incomes who do not keep up with private insurance firms’ expectations. Homeowners insurance can cost up to $2,600 per year in the United States for a $300,000 home, depending on coverage, location, and property age and condition.
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