5 things the average social security benefit can pay for

You will often hear that Social Security will not go very far in helping you achieve financial security in retirement. And that’s true. The average senior citizen today earns $ 1,519 per month, which translates to just over $ 18,000 in annual income. But while a monthly benefit of $ 1,519 may not pay for all of your expenses once you stop working, here are some important expenses for seniors. can blanket.

1. Your Medicare Part A deductible

Although Medicare Part A, which covers hospital care, does not charge a premium for registrants, you will be liable for an expensive deductible each time you are admitted to the hospital. Fortunately, the average monthly Social Security benefit is high enough to cover the $ 1,484 deductible you’ll be facing in 2021.

2. Almost a full year of Part B bonuses

Unlike Medicare Part A, Part B Is charge enrolled a monthly premium. If you are not subject to a supplement for having a higher income, you will pay a standard monthly premium of $ 148.50 for Part B in 2021. This means that the average monthly Social Security benefit could cover more than 10 months of bonuses.

3. Your rent

Some seniors choose to rent a home when they retire rather than take the risk of owning it at this point in life. If you decide you prefer to rent, know that in 2019, the median monthly rent for a one-bedroom apartment was $ 1,078, according to Abodo, an apartment rental service. For a two bedroom it was $ 1,343. The average monthly social security benefit can cover either amount.

4. Your car

Although many seniors no longer have to travel to find work, they still have to pay their share of the transportation costs. After all, you’ll still need to shop for groceries, see a doctor, and have a way to get around town, and unless you live in a city with sturdy public transportation, you’ll need a vehicle for it. make. In fact, it costs $ 773.50 per month, on average, to own and maintain a car, reports AAA. Fortunately, the average monthly Social Security benefit can cover almost two months of vehicle costs.

5. Your annual long-term care insurance premium

Since Medicare does not cover long-term care, seniors are often advised to purchase insurance to cover the often astronomical costs associated with it. According to the American Association for Long-Term Care Insurance, the average single man of 65 on average pays $ 1,400 in annual premiums for long-term care insurance (i.e. for an initial pool of $ 162,000 in benefits), according to the American Association for Long-Term Care Insurance. the monthly social security benefit is sufficient to cover it.

Now that you know how far your monthly Social Security benefit has the potential to go, you may find it easier to fit this source of income into your retirement budget. Of course, you will still need income outside of Social Security to stay afloat as a senior. In fact, generally speaking, your monthly benefit will replace about 40% of your old paycheck, and you may need double that amount to live comfortably. But understanding what those benefits will pay for will help you plan better for the future.