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Private Funds: Social Security Benefits
Social Security is Commonly Used to Pay for Senior Care Costs

Financial planning

Looming over many seniors is the financial challenge of how to pay for assisted living and other senior care costs and whether or not Social Security Benefits are enough to cover those expenses. Undoubtedly, Social Security developed into an essential source of income for millions of Senior Citizens. For many, they pay for assisted living through sources like "out-of-pocket" and savings, investment income, and other personal assets to cover the monthly costs - including one's social security benefits.

If you depend solely on Social Security to pay for assisted living, there is a chance you'll need to turn to other sources for financial help. The average amounts of a Social Security check for a retired worker are $1,230, and for a couple is $2,045. These monthly averages apparently run short of the cost of assisted living, especially when one spouse requires residential care and the other remains in their home. However, this could divert finances from other vital needs, such as your spouse's living costs. Consider too that when you need long-term care, you may not have a source of income other than your savings. As seniors and families begin to look at the monetary assets available, they find themselves plunged into unfamiliar territory.

Social Security Likely isn't Enough

Social Security, indeed, is the most valuable in terms of reliable income support for seniors. Even with potential future reforms to the program, it will likely never go away.However, it has flaws that only private savings can cover.

-- Pamela Villarreal
National Center for Policy Analysis

Frightening Facts on Seniors and Social Security

  • For one in five (19%) Social Security beneficiaries, it's their sole source of income
  • For one in three (30%) Social Security recipients, it accounts for 90% of their income
  • More than half (56%) of the beneficiaries depend on it for more than half of their income.
Social Security Benefits Some more than Others

it is more beneficial to some than others. For those who live to 100, it's a bargain, as they will receive payouts for 35 years. However, some demographic groups (such as minorities and lower-income) have shorter life expectancies. For those who only live to 75, and have worked for 40 years of their lives to pay into the system, they are not able to pass a penny of their income on to their heirs.

-- Pamela Villarreal
National Center for Policy Analysis

Supplemental Security Income (SSI)

Supplemental Security
Supplemental Security

Another source of supplemental income from the federal government is (SSI), Supplemental Security Income (also known as Title XVI). A senior must be 65 years of age or older to apply. It's a needs-based program that provides a monthly check to persons who are blind, elderly, or disabled. SSI is only available to persons with a very low-income and asset limits.

The average SSI for an individual is a little over $700/month and for a couple it is over $1000/month. To learn if you are eligible to apply: Social Security disability program. .

If you're 65 or over and receive Supplemental Security Income, you may apply for Medicaid that can assist you in paying for assisted living. It is a federally funded program for low-income Americans and the biggest payer for a room, board, nursing care, and social activities in nursing homes. Many, but not all, states now cover some assisted living services under their Medicaid programs; however, these fluctuate widely in terms of eligibility requirements, and dollar amounts of coverage.

Smart Steps on Managing Your Monthly Social Security Check

Many seniors rely on social security to pay for basic costs
Is Social Security Enough? Probably Not.

Pulling It All Together to Make Sense of Your Income

Take stock of your financial situation - this is the first step to grasp whether you can afford assisted living or not. Keep track of your income and your expenses for every month. Write down what you and your spouse earn, and then your monthly expenses.

Know Your Income and Expenses:

  • List Your Income
  • List Your Savings
  • List Your Investments
  • List Your Expenses

Write out the following costs:

  • Rent/Mortgage
  • Electricity/Gas
  • Telephone/Cell
  • Water/Waste
  • Property Tax
  • Furniture
  • Other Utilities
  • Food
  • Transportation
  • Loans
  • Entertainment
  • Fitness
  • Insurance
  • Education
  • Recreation
  • Healthcare
  • Gifts
  • Other

Gather your financial documents:

Assess what you have, what you owe, and what benefits you're receiving. Include: medical records, additional compensation for you and your spouse, and statements from banks, mortgage companies, credit unions, credit card companies, other lenders, brokerage firms or mutual funds.

Build a spending plan (budget). List benefits you receive and create a budget.

Additional questions to ask you and your family:

How long must my benefits and funds last?

If my spouse or I can't continue to work, even odd jobs for additional income, how will my monthly benefits replace our former income?

Have I paid off my high-interest debt, such as credit cards?

Refining the process:

  • Take your time
  • Know your financial situation;
  • Develop a budget
  • Get help if you need it
  • Beware of scams and frauds offering deals and schemes too good to be true
Carol Marak
Carol Marak

After seven years of helping her aging parents, Carol Marak has become a dedicated senior care writer. Since 2007, she has been doing the research to find answers to common concerns: housing, aging and health, staying safe and independent, and planning long-term.