Fong Law Group

An Epidemic: Substance Abuse a Growing Problem Among Seniors

The United States population of aging adults has grown exponentially over the past decade. According to projections published by the U.S. Census Bureau, the number of Americans aged 60 and older increased by 34 percent from 55.7 million to 74.6 million between 2009 and 2019. Unfortunately, amid their growing numbers, more and more seniors are facing a substance use disorder problem that in large part has remained silent.

What Are Substance Use Disorders?

According to the Centers for Disease Control and Prevention, substance use disorders include “treatable, chronic diseases characterized by a problematic pattern of use of a substance or substances leading to impairments in health, social function, and control over substance use.”

Seniors are an overlooked group regarding substance abuse issues, but the problem is growing nationwide. Learning the extent and cause of substance abuse among seniors can help improve outcomes for this population.

Rates of Substance Abuse and Misuse Among Older Adults

Seniors often get disregarded in conversations about substance misuse. Yet according to some estimates, nearly 1 million adults aged 65 and older were reported to be living with an addiction as of 2018. Today, that number could be much higher.

Drug Abuse

Drug abuse among older adults is a dangerous problem, in part because health care providers and caregivers so often overlook it. It may even be diagnosed incorrectly as a health condition related to aging.

Seniors are likely to use one or more prescription medications. Adverse drug interactions between multiple prescriptions, nutritional supplements, and over-the-counter medication can inadvertently harm one’s health.

Misuse of certain prescriptions can also lead to a substance use disorder. Opioids, for example, have been prescribed to millions of people suffering from chronic pain. The proportion of U.S. adults aged 55 and up who have sought treatment for opioid use disorder has been surging over the past two decades; between 2013 and 2015 alone, it jumped more than 50 percent. One 2006 study stated that at least one in four older adults were using prescription drugs that have potential for abuse.

Many seniors are at risk of developing a dependence on nonprescription, over-the-counter, and illicit drugs as well. Meanwhile, research has suggested that American seniors use illicit drugs at a higher rate than older adults from most other countries.  

Alcohol Use

Surveys show that alcohol use among people 65 and older has increased 22 percent over the past two decades. The extent of alcohol abuse remains unknown due to the impact of underreporting. However, seniors in some studies do report binge drinking and at-risk drinking.

People binge drink when they have five or more drinks in one setting. According to one study, more than a tenth of older adults in the U.S. are regular binge drinkers.

Research published by the National Library of Medicine defines at-risk drinking as consuming more than three drinks on one occasion or having more than seven drinks in one week. The prevalence of at-risk drinking among men is estimated at 16 percent and 10.9 percent among women.

Note that the National Institutes of Health offers a series of free worksheets that can help you evaluate your use of alcohol and learn how to make positive changes.

Why Do Seniors Abuse Substances?

Seniors are less likely to abuse substances for a euphoric effect. Older adults typically use drugs and alcohol to self-medicate against the physical and emotional pain that comes with aging.

Some common causes of substance abuse among people aged 65 and older include:

• Loss of a spouse or family member
• Decreased income
• Change in living arrangements
• Trouble sleeping
• A mental and physical decline in health
• Conflicts with family
• Lack of purpose
• Retirement

A senior’s coping style early in life may correlate with late-life substance abuse. People with avoidant coping styles tend to rely on substances to deal with stress and change. If seniors spend their lives avoiding stress or problems, they are more likely to develop a late-life drinking problem than those who cope in other ways.

Social Factors Leading to Substance Abuse Among Older Adults

Various social factors appear to increase the chance of late-life drug and alcohol abuse. The following social factors are among those that may lead to increased substance misuse:

• Unexpected or forced retirement
• Social isolation
• Being divorced, separated, or single
• Lack of religious affiliation
• Affluence or feeling comfortable with the availability of financial resources
• Grief

Physical Factors Leading to Substance Abuse Among Aging Adults

Older adults with substance abuse disorder typically have these physical factors in common:

• Comorbidities
• Chronic medical conditions
• Reduced mobility
• Chronic pain
• Poor health status

Psychiatric Risk Factors Leading to Substance Abuse Among Seniors

Psychiatric risk factors among older adults with substance abuse disorder include:

• History of substance use disorder
• Current or previous mental illness
• Feeling socially isolated
• Having an avoidance coping style

Symptoms of Substance Abuse Among Older Adults

Substance abuse is a serious medical condition. Prompt diagnosis and treatment can help seniors get the help they need to improve their quality of life. Caregivers and medical providers should watch out for the following symptoms of substance misuse:

• Depression and loss of interest in previously enjoyable activities
• Use of a prescription drug more often than what is outlined in the instructions
• Memory problems
• Change in appetite
• Social withdrawal
• Irritability and sadness
• Change in sleeping patterns
• Decline in hygiene

Leading Substance Use Disorders According to Region

Substance misuse is occurring everywhere in the U.S., regardless of age, but certain areas are seeing abuse of specific types of substances. The Agency for Healthcare Research and Quality compiled the following data for 2016 through 2018 about regions nationwide:

• New Jersey and parts of Appalachia have a concentration of opioid-related substance use disorders.
• The Midwest, Appalachia, Rhode Island, and Nevada saw a higher concentration of alcohol dependency issues than other parts of the country.
• Appalachia saw a more-significant-than-average concentration of sedative-related substance use disorders.
• Stimulant-related disorders appeared more in the Midwest, the South, and Appalachia.
• Cannabis-related substance abuse disorders occurred in Mississippi and other Southern states.

Health Impacts of Substance Abuse on Seniors

The health implications of substance abuse disorder are more significant for older people. Older people are more vulnerable than other groups to the effects of drug use on mental health. Seniors who take prescription medication risk negatively impacting their mental state by mixing their medicine with recreational drugs or by abusing alcohol.

Drug and alcohol abuse can also lead to increased fall risk, physical impairment, adverse psychiatric effects, worsening of other physical conditions, and death.

In fact, among people aged 65 and over, certain types of opioid overdose deaths increased by 53 percent between 2019 and 2020 alone. The number of alcohol-related deaths for this age group rose by 18 percent over the same timeframe.

Recovery Options for Older Adults

Whether a senior should receive inpatient or outpatient treatment depends on their needs. Older adults with a substance use disorder may benefit from inpatient treatment if they meet some of these criteria:

• A high likelihood of relapse
• Suicidal thoughts or thoughts of self-harm
• Likelihood of experiencing withdrawal symptoms
• No familial support
• Previous attempts at detox
• Co-occurring severe medical conditions that need continuous monitoring

Seniors may also need the following to get the most out of recovery:

• Careful case management
• Family, group, and individual counseling
• Cognitive behavioral therapy

How Can the Health Care Industry Help Older Adults With Substance Use Disorder?

Much work is needed to decrease the substance abuse rates among older adults. There is a critical need to address this problem.

Primary care physicians are the first line of defense. Education for clinicians should include skill and strategy development to treat substance abuse issues among older adults. Health care workers should know how to identify substance misuse with proper screening and assessments. Understanding co-occurring disorders and the connection between mental illnesses and substance use disorders is also crucial.

If you notice signs of addiction in a loved one, it is essential to get them professional help. In addition to improving their quality of life, you may save them from succumbing to this disease.

An Epidemic: Substance Abuse a Growing Problem Among Seniors

The United States population of aging adults has grown exponentially over the past decade. According to projections published by the U.S. Census Bureau, the number of Americans aged 60 and older increased by 34 percent from 55.7 million to 74.6 million between 2009 and 2019. Unfortunately, amid their growing numbers, more and more seniors are facing a substance use disorder problem that in large part has remained silent.

What Are Substance Use Disorders?

According to the Centers for Disease Control and Prevention, substance use disorders include “treatable, chronic diseases characterized by a problematic pattern of use of a substance or substances leading to impairments in health, social function, and control over substance use.”

Seniors are an overlooked group regarding substance abuse issues, but the problem is growing nationwide. Learning the extent and cause of substance abuse among seniors can help improve outcomes for this population.

Rates of Substance Abuse and Misuse Among Older Adults

Seniors often get disregarded in conversations about substance misuse. Yet according to some estimates, nearly 1 million adults aged 65 and older were reported to be living with an addiction as of 2018. Today, that number could be much higher.

Drug Abuse

Drug abuse among older adults is a dangerous problem, in part because health care providers and caregivers so often overlook it. It may even be diagnosed incorrectly as a health condition related to aging.

Seniors are likely to use one or more prescription medications. Adverse drug interactions between multiple prescriptions, nutritional supplements, and over-the-counter medication can inadvertently harm one’s health.

Misuse of certain prescriptions can also lead to a substance use disorder. Opioids, for example, have been prescribed to millions of people suffering from chronic pain. The proportion of U.S. adults aged 55 and up who have sought treatment for opioid use disorder has been surging over the past two decades; between 2013 and 2015 alone, it jumped more than 50 percent. One 2006 study stated that at least one in four older adults were using prescription drugs that have potential for abuse.

Many seniors are at risk of developing a dependence on nonprescription, over-the-counter, and illicit drugs as well. Meanwhile, research has suggested that American seniors use illicit drugs at a higher rate than older adults from most other countries.  

Alcohol Use

Surveys show that alcohol use among people 65 and older has increased 22 percent over the past two decades. The extent of alcohol abuse remains unknown due to the impact of underreporting. However, seniors in some studies do report binge drinking and at-risk drinking.

People binge drink when they have five or more drinks in one setting. According to one study, more than a tenth of older adults in the U.S. are regular binge drinkers.

Research published by the National Library of Medicine defines at-risk drinking as consuming more than three drinks on one occasion or having more than seven drinks in one week. The prevalence of at-risk drinking among men is estimated at 16 percent and 10.9 percent among women.

Note that the National Institutes of Health offers a series of free worksheets that can help you evaluate your use of alcohol and learn how to make positive changes.

Why Do Seniors Abuse Substances?

Seniors are less likely to abuse substances for a euphoric effect. Older adults typically use drugs and alcohol to self-medicate against the physical and emotional pain that comes with aging.

Some common causes of substance abuse among people aged 65 and older include:

• Loss of a spouse or family member
• Decreased income
• Change in living arrangements
• Trouble sleeping
• A mental and physical decline in health
• Conflicts with family
• Lack of purpose
• Retirement

A senior’s coping style early in life may correlate with late-life substance abuse. People with avoidant coping styles tend to rely on substances to deal with stress and change. If seniors spend their lives avoiding stress or problems, they are more likely to develop a late-life drinking problem than those who cope in other ways.

Social Factors Leading to Substance Abuse Among Older Adults

Various social factors appear to increase the chance of late-life drug and alcohol abuse. The following social factors are among those that may lead to increased substance misuse:

• Unexpected or forced retirement
• Social isolation
• Being divorced, separated, or single
• Lack of religious affiliation
• Affluence or feeling comfortable with the availability of financial resources
• Grief

Physical Factors Leading to Substance Abuse Among Aging Adults

Older adults with substance abuse disorder typically have these physical factors in common:

• Comorbidities
• Chronic medical conditions
• Reduced mobility
• Chronic pain
• Poor health status

Psychiatric Risk Factors Leading to Substance Abuse Among Seniors

Psychiatric risk factors among older adults with substance abuse disorder include:

• History of substance use disorder
• Current or previous mental illness
• Feeling socially isolated
• Having an avoidance coping style

Symptoms of Substance Abuse Among Older Adults

Substance abuse is a serious medical condition. Prompt diagnosis and treatment can help seniors get the help they need to improve their quality of life. Caregivers and medical providers should watch out for the following symptoms of substance misuse:

• Depression and loss of interest in previously enjoyable activities
• Use of a prescription drug more often than what is outlined in the instructions
• Memory problems
• Change in appetite
• Social withdrawal
• Irritability and sadness
• Change in sleeping patterns
• Decline in hygiene

Leading Substance Use Disorders According to Region

Substance misuse is occurring everywhere in the U.S., regardless of age, but certain areas are seeing abuse of specific types of substances. The Agency for Healthcare Research and Quality compiled the following data for 2016 through 2018 about regions nationwide:

• New Jersey and parts of Appalachia have a concentration of opioid-related substance use disorders.
• The Midwest, Appalachia, Rhode Island, and Nevada saw a higher concentration of alcohol dependency issues than other parts of the country.
• Appalachia saw a more-significant-than-average concentration of sedative-related substance use disorders.
• Stimulant-related disorders appeared more in the Midwest, the South, and Appalachia.
• Cannabis-related substance abuse disorders occurred in Mississippi and other Southern states.

Health Impacts of Substance Abuse on Seniors

The health implications of substance abuse disorder are more significant for older people. Older people are more vulnerable than other groups to the effects of drug use on mental health. Seniors who take prescription medication risk negatively impacting their mental state by mixing their medicine with recreational drugs or by abusing alcohol.

Drug and alcohol abuse can also lead to increased fall risk, physical impairment, adverse psychiatric effects, worsening of other physical conditions, and death.

In fact, among people aged 65 and over, certain types of opioid overdose deaths increased by 53 percent between 2019 and 2020 alone. The number of alcohol-related deaths for this age group rose by 18 percent over the same timeframe.

Recovery Options for Older Adults

Whether a senior should receive inpatient or outpatient treatment depends on their needs. Older adults with a substance use disorder may benefit from inpatient treatment if they meet some of these criteria:

• A high likelihood of relapse
• Suicidal thoughts or thoughts of self-harm
• Likelihood of experiencing withdrawal symptoms
• No familial support
• Previous attempts at detox
• Co-occurring severe medical conditions that need continuous monitoring

Seniors may also need the following to get the most out of recovery:

• Careful case management
• Family, group, and individual counseling
• Cognitive behavioral therapy

How Can the Health Care Industry Help Older Adults With Substance Use Disorder?

Much work is needed to decrease the substance abuse rates among older adults. There is a critical need to address this problem.

Primary care physicians are the first line of defense. Education for clinicians should include skill and strategy development to treat substance abuse issues among older adults. Health care workers should know how to identify substance misuse with proper screening and assessments. Understanding co-occurring disorders and the connection between mental illnesses and substance use disorders is also crucial.

If you notice signs of addiction in a loved one, it is essential to get them professional help. In addition to improving their quality of life, you may save them from succumbing to this disease.

Is "Aging in Place" Right for Me?

Most older adults want to remain in their homes and communities as they age rather than move into assisted living facilities or nursing homes.

For those who wish to maintain their independence and continue living at home as they grow older, taking certain steps to protect their physical, mental, and financial welfare is essential.

What Does It Mean to Age in Place?

The Centers for Disease Control and Prevention defines aging in place as a senior’s “ability to live in one’s own home and community safely, independently, and comfortably, regardless of age, income, or ability level.” According to 2021 data from AARP, more than three-quarters of adults 50 and older say they would prefer to age in place.

Health Considerations for Older Americans Aging in Place

Older adults must consider their physical, emotional, and social well-being when deciding where to spend their later years. They may consider adding supplemental services over time to help improve their quality of life.

To ensure that you will have the support you need for safely aging in place, take the following into consideration:

Resources to Manage Chronic Diseases

Disease management is vital for anyone, especially an older person with a chronic illness. Many older people suffer from at least one chronic illness. If a senior has a chronic disease and wants to age in place, they and their caregivers should focus on:

• Ensuring that spaces in the home are safe and easily accessible to make getting around easier;
• Learning about proper nutrition; and
• Increasing access to dental health services. Research has found that proper oral care can help prevent the progression of many chronic diseases.

Eating Well While Aging at Home

Proper nutrition is a vital part of caring for yourself at home. In facing potential changes to your financial situation after retirement, you may need help buying nutritious meals even after budgeting.

If you find yourself in need of meals, community resources may be available. Neighborhood senior centers, places of worship, and charities may provide a hot meal while you make new friends. If you cannot leave your home, some meal delivery services drop off food at your door for little or no cost.

Support for Mobility

Exercise and maintaining your mobility can increase overall physical and mental health even as you grow older. Seniors aging in place need to be able to move around their homes and neighborhoods safely. Aging in place is a much more realistic goal if you can walk for exercise, access transportation to medical appointments and errands, and maintain a safe environment at home, free from increased fall risks.

If you desire to age in place, consider simple changes you can make to your home to promote your safety. Examples of helpful modifications around the house include handrails, temporary ramps, no-slip bath rugs, and assistive seating.

Mental Health, Substance Abuse, and Memory Care Services

There is an increased need among older adults for mental health, substance abuse, and memory care services. An estimated 20 percent of older adults have a mental health disorder, and the total number of seniors with a mental health or memory care diagnosis is likely to increase over time.

Suggestions for addressing mental health concerns among older people include:

• Focusing on preventative care. Seniors and their caregivers should work with their primary care physician to identify warning signs of depression, anxiety, other mood disorders, and memory care problems. Preventative care can help mitigate the progress of these disorders and improve quality of life.
   
• Looking for common signs of a substance abuse problem. This is an often overlooked area of older adult mental health care. Older adults may turn to substances to deal with unresolved childhood problems or to avoid a feeling of loss of meaning and purpose. Some common signs to watch for include reduced hygiene, unexplained bruises, erratic behavior, and the smell of alcohol on their breath.
  
  If you are a senior’s caregiver and suspect substance abuse, you can find resources and support through the Substance Abuse and Mental Health Services Administration (SAMHSA).

The Need for Social Connection Among Aging Adults

Older adults benefit tremendously from social connections and interaction. People over 65 are likely to live alone, so creating a community outside the home is necessary. Feeling a sense of purpose is beneficial to mental and physical health. For seniors looking to create a sense of community and purpose, they may benefit from such activities as:

• Joining an organization or social club

• Volunteering for a cause close to their hearts

• Learning a new hobby

• Attending a religious institution

• Adopting or fostering a pet

• Using technology to stay in touch with friends and family

Wearables and Smart Monitoring Devices

Technology can help us not only remain connected to one another, but also monitor our health and that of our aging loved ones. Many devices make detailed health information readily available at our fingertips. These devices benefit seniors because they can learn more about their health and make the most of doctor’s visits by communicating effectively about their medical needs.

Examples of wearable health and smart-home monitoring devices include:

• Smartwatches and smartphones, which can track your cardiac health, fitness activity, and sleep patterns
• Medical alert bracelets and personal alert necklaces, which can aid in detecting falls or contacting emergency services when necessary
• Contact sensors and smart locks, devices that can alert caregivers when their loved one living at home leaves a window, garage, or door open, or has forgotten to lock them
• Smart plugs, which can automatically turn on and off lights, space heaters, thermostats, security cameras, and more

Money Management While Aging in Place

Money management can also be an area of concern for seniors and caretakers. Seniors want to make sure they have sufficient financial resources to remain in their homes and communities comfortably, eat well, care for their medical needs, and have fun.

Creating a budget with the help of financial counselors and geriatric care managers can benefit someone on a fixed income. There may even be volunteers in your area that offer a similar service. Being aware of how to prevent and avoid common types of scams that target the senior population is equally as important.

How Can Caregivers Help Seniors Age in Place?

Seniors often choose to age in place to remain independent and avoid becoming a burden to their family. Caregivers can support their goal by teaching them to use technology to communicate and track their health, helping them establish a budget, and setting them up with a routine that may include visiting their doctor, running errands, and making time to socialize.

There is nonmedical support that your loved one will need, too. Caregivers may opt to support their aging loved ones by pitching in with or hiring services for lawn care, cleaning, cooking, laundry, or pet care.

Is Aging in Place Right for You?

Careful planning is the best way to accomplish your goal of staying home as you age. If you are considering plans to age in place and want assistance, contact your elder care attorney.

What Is IRMAA and How Does It Affect My Medicare Premiums?

As we near retirement, we may assume that once Medicare kicks in, our medical insurance premiums will be fixed. However, many people may not realize that there are special rules regarding how much they pay for Medicare Parts B and D if they are in a higher income range.

What Is IRMAA?

If the Social Security Administration (SSA) determines you have a higher income, you will have to pay more for your Medicare Part B or Medicare Part D coverage. This surcharge  is referred to as the income-related monthly adjustment amount (IRMAA). It is paid in addition to your monthly premium amount.

Note that Medicare Part B pays for doctor visits, outpatient care, and related services. Medicare Part D is related to your prescription drug coverage.

How Is IRMAA Calculated?

To determine whether you must pay higher Medicare Part B or D premiums, the SSA bases the decision on your most recently filed tax return. Because of timing issues, this can often be your tax return from two years prior, as your most recent one may not yet be filed or in the IRS system.

If the SSA finds that you must pay a higher premium, they use a sliding scale based on your modified adjusted gross income (MAGI) to determine by how much. MAGI equals your total adjusted gross income and any tax-exempt interest income you have received in a tax year.

2023 IRMAA Brackets

The IRMAA 2023 threshold for married couples is $194,000. For any other filing status, the threshold is $97,000.

Once you cross these thresholds, you will pay more for coverage. How much more depends on how much you exceed these numbers. The SSA provides a chart to show you what you can expect in 2023.

The SSA calculates your IRMAA every year. So, while you may be subject to IRMAA for one year, you may not be subject to it the following year. If the SSA determines you will be subject to IRMAA, they inform you of this and its effect on your premium in writing.

How Will IRMAA Affect My Premiums?

Let’s start by understanding how IRMAA may affect your Medicare Part B and D premium. Usually, the split between SSA and you is 75 percent/25 percent. In other words, Medicare pays 75 percent of the premium, and you pay 25 percent. If you exceed the income thresholds, the split changes, and you may pay anywhere from 35 percent to the total cost, depending on your income level.

Again, refer to the SSA’s 2023 chart for your situation. So, for example, if you are filing taxes as a married couple and make between $194,000 and $228,000 in 2023, you will see on the 2023 chart that your Part B premium will increase by $65.90. Your Part D premium will go up by $12.20.

What If I Don’t Think I Should Be Subject to IRMAA?

What happens if your income listed on your most recently available tax return was much higher than what you are currently making or receiving? There is a way for you to inform SSA of the change in your finances.

For example, if you divorced, were laid off, or are making less money and you can document this, you can complete the Medicare Income-Related Monthly Adjustment Amount - Life-Changing Event form. This will inform SSA and ask them to reassess any imposition of IRMAA in your case.

You can also appeal the SSA’s decision where there was a change in your income but not necessarily in the form of a life event. For example, if you filed and IRS accepted an amended tax return for the year that is being used to calculate your IRMAA, you may be able to get the SSA to change its decision. Sometimes the SSA gets erroneous information about you from the IRS, and this may also be a basis to appeal.

There are a few different ways to appeal the SSA’s IRMAA determination. The appeal can be submitted in any of the following ways:

• online,
• in writing by completing a Request for Reconsideration, or
• through your local SSA office.

Speak With a Professional

If you have questions about IRMAA and your particular circumstances, it is best to speak with a professional. Timing matters, so seeking professional guidance as soon as possible after you receive notice of the IRMAA surcharge is essential.

Highlights of How the Omnibus Bill Will Benefit Older Adults

The Senate and House have cleared the passage of a year-end $1.7 trillion appropriations bill that will benefit older adults on a number of fronts.

The bill, which runs more than 4,000 pages and includes a wide variety of legislation, heads to President Biden next for his signoff.

Here is a breakdown of some of the highlights that relate to supporting older Americans:

Health and Housing

• Opt to age at home – The Money Follows the Person (MFP) Program has been helping older adults age in their own home or a community setting, rather than in nursing homes, since 1972. The newly passed bill extends MFP through September 2027.
   
• Age in place safely – The omnibus bill has also doubled funding for the federal government’s Older Adult Home Modification Program from $15 million to $30 million.
  
  For seniors with limited income, this program covers the cost of simple, low-cost home modifications – such as railings and temporary wheelchair ramps – that help them age in place safely.
   
• Provide for your healthy spouse if you are on Medicaid in a nursing home – Medicaid beneficiaries who must reside in a long-term care facility but have a spouse still living at home will continue to see their healthy spouse protected from poverty.
  
  Known as spousal impoverishment rules, these protections ensure that the healthy spouse receives income while their institutionalized spouse keeps their Medicaid eligibility. These protections, which are adjusted each year, will continue to be in place until September 2027.
   
• Continue to see doctors online – Lawmakers have extended access to telehealth services for Medicare enrollees for another two years.
   
• Find affordable housing with support services – The Housing for the Elderly Program has received a billion-dollar bump in funding as well.
  
  This program seeks to aid seniors with very limited income in securing housing that is within their means while also offering supportive services such as assistance with cooking and cleaning.

Retirement Savings

• Contribute more to retirement – For older workers, the omnibus bill raises what are known as “catch-up” contribution limits for retirement savings. Taxpayers ages 60 to 63 will be allowed to contribute an extra $10,000 to their 401(k) starting in 2025.
   
• Access 401(k) funds for emergencies – If you need to take money out of your 401(k) before reaching age 59½, under certain circumstances you will no longer have to pay the 10 percent penalty fee for withdrawing money early. As of the end of 2023, you will be allowed to withdraw up to $1,000 a year for unforeseen emergencies without incurring a penalty.
   
• Wait longer to withdraw money from your retirement accounts – Previously, you were required to begin withdrawing money from your retirement plan account starting at age 72. This mandatory withdrawal is known as a required minimum distribution (RMD).
  
  As of January 1, 2023, the new bill allows you to hold off until age 73 to take funds from these types of private retirement accounts.

Comparing Traditional Medicare and Medicare Advantage

Recent research by the Kaiser Family Foundation examined the differences between traditional Medicare and Medicare Advantage. While people in either program were similarly satisfied with their care and overall care coordination, some distinctions became apparent.

Traditional Medicare’s Strengths

Traditional Medicare is a federal health insurance program for adults 65 and older and individuals with disabilities. Medicare Part A covers hospital fees, Part B applies to medical expenses, and Part D involves prescriptions.

The Foundation reviewed 62 studies released since 2016. The research findings revealed the following:

• Beneficiaries of traditional Medicare were more likely to receive cancer care in higher-quality hospitals.
• They also tended to get superior care in skilled nursing facilities and home health agencies compared with their Medicare Advantage counterparts.
• Traditional Medicare recipients may be less likely to have problems related to expenses.

Findings on Benefits of Medicare Advantage

Medicare Advantage is an alternative to traditional Medicare. It offers plans encompassing Part A hospital fees, Part B medical expenses, and Part D medicine. In some cases, the cost of Medicare Advantage can be lower, but not always. Privately owned companies contract with Medicare to provide Medicare Advantage.

According to the study:

• Some research indicated that Medicare Advantage had slightly better preventive services, providing increased access to routine health checkups, screenings, and vaccinations.
• Patients with Medicare Advantage were more likely to have a consistent health care provider.
• Medicare Advantage had lower hospital readmission rates, received more information during care transitions, and had more favorable experiences getting prescription drugs.

Switching Rates

The researchers looked at the rates at which people switched programs as a way of understanding program dissatisfaction. Medicare Advantage had a higher switching rate relative to traditional Medicare. Yet both had a low turnover, possibly suggesting that people tended to be satisfied with both programs.

Switching from Medicare Advantage to standard Medicare was more common among:

• people of color
• residents of rural areas
• those eligible for both Medicare and Medicaid
• individuals who experienced a health impairment that affected their daily functioning

Cost Issues

Beneficiaries of traditional Medicare reported higher rates of cost difficulties than enrollees in Medicare Advantage. Yet recipients of conventional Medicare with supplemental coverage had the lowest rates of expense complaints overall.

Seek Professional Guidance

Since each plan’s benefits and drawbacks can depend on individual circumstances, consider speaking to your elder law attorney before enrolling. They can explain the differences between these programs and help you plan for retirement.

Some Social Security Beneficiaries Can Get Retroactive Payments -- But at a Cost

If you need a lot of cash on hand upon retirement, Social Security offers a lump-sum payment option that’s worth six months of benefits. However, it comes at a cost. It is important to understand the details before agreeing to the payment.

If you have waited beyond your full retirement age (66 for those born between 1943 and 1954) to begin collecting Social Security benefits, you have the option of asking for back payments. The maximum that Social Security offers is six months’ worth of retroactive payments in a lump sum. The downside is that by taking the lump sum, your retirement date and the amount of your monthly benefit are rolled back six months. 

When you delay taking retirement beyond your full retirement age, you amass “delayed retirement credits” that increase your benefits by 8 percent for every year that you wait, over and above annual inflation adjustments. By taking the lump-sum payment, you lose the delayed credits that you had accumulated over the previous six months, so your monthly benefit will be lower than if you did not take the lump sum -- forever.  So, for example, if by taking the six months of retroactive benefits your regular monthly benefit is reduced by $150 and you live another 25 years, you're foregoing $45,000 over that span.  

Whether you should take the lump sum payment depends on a number of factors, including your life expectancy, your spouse’s needs, and what you will do with the new money. Taking the lump-sum payment makes more sense if your life expectancy is shorter. In this case, the immediate cash infusion will be more beneficial than bigger monthly payments. However, if you are married and are the higher earner, you will want to consider your spouse’s needs. If you die, your spouse will receive spousal benefits equal to the monthly amount of your benefits. The higher your benefit, the more your spouse will receive. 

You also need to consider what you will do with the lump-sum payment. If you are paying off high-interest debt or investing in something with a good rate of return, the lump sum might be better than having the higher monthly payment.

Claiming Social Security Benefits at Age 70

If you are about to turn 70, congratulations on reaching a big milestone.  And if you also have delayed claiming Social Security retirement benefits up till now, you are joining a select group -- only 6.5 percent of Social Security recipients put off collecting their benefits until they reach three score and ten, the age at which they can collect the maximum benefit. If you are about to join this elite group of septuagenarian claimers, it’s important to know when and how to claim.

The decision of how long to wait to claim Social Security benefits depends on a number of factors, including other income sources in retirement and projected longevity.  But Social Security experts advise waiting as long as possible to start collecting benefits, up to age 70.  This is because if you delay taking retirement beyond your full retirement age (66 for those born from 1943 to 1954), you amass “delayed retirement credits” that increase your benefit by 8 percent for every year that you wait, over and above annual inflation adjustments.  Your checks will be about 76 percent more than had you claimed at age 62, the earliest you can file. It’s tough to find a better and more reliable investment than that. (However, keep in mind that if you are collecting benefits based on the work record of a current or ex-spouse, there is no point in waiting until 70 -- you won't accrue delayed retirement credits beyond your full retirement age.)

Don’t Wait Any Longer

Delayed retirement credits stop at age 70, so there is no advantage to putting off starting benefits any longer.  Not only won’t your credits increase by claiming after age 70, but if you wait longer than half a year, you’ll start losing monthly benefits you would have otherwise received.  The Social Security Administration (SSA) will pay you retroactively for benefits accrued up to six months after your 70th birthday, but that’s it.  If you wait any longer, benefits you would have received are permanently forfeited.

The next thing to know is that the SSA won’t automatically start sending you checks once you turn 70. You need to apply for benefits. You can do this starting four months before the date that you want your benefits to begin.  To get the maximum amount, you’ll want the benefits to start the month you turn 70.  There is, however, one scenario where benefits will automatically kick in at 70: those who took benefits after reaching their full retirement age and then suspended their benefits to earn delayed credits until age 70.  For them, the SSA should automatically restart benefits at 70.

You can apply online -- click here.  If you can’t submit your application online, you can call 1-800-772-1213 (TTY 1-800-325-0778). In normal times, another alternative is to visit your local Social Security office, but during the pandemic visits are by appointment only and only for a limited number of reasons. However, SSA offices should be reopening soon; check the SSA’s Coronavirus Disease page for updates. The SSA will want certain information and documents when you apply. For a checklist of what may be required, click here.

When will you get your first check?  The SSA issues checks a month behind, so your benefits should start arriving the month after the month you turned 70.  For example, if you were born July 17, you should ask that your benefits start in July and your first check will come in August.  However, those born on the first day of the month get a small bonus: the SSA treats them as if they were born the previous month and starts paying benefits in their birth month.  So, for example, if you were born July 1, you’d request benefits to start in June and the payments would begin in July.

What If You’re Still Working?

Working past age 70 (or any time past your full retirement age, in fact) won’t affect your benefits.  And while you won’t increase your monthly benefit by waiting past age 70 to claim, you could boost it by working in addition to collecting Social Security. This is because the SSA recalculates your benefits each December based on your 35 highest-earning years of work. If your earnings plus your Social Security benefits allow you to replace a lower-earning year, your overall benefit could increase in the annual calculation. But Social Security benefits are taxable, so if you’re earning more money your tax rate may be higher.

In most cases, your Medicare premiums will be deducted from your Social Security check. If you happen to be retiring at age 70 and you’ve been paying Medicare’s high-earner surcharges, keep in mind that you can reverse these surcharges if your income drops far enough. The Social Security Administration uses income reported two years ago to determine a beneficiary's premiums. If your income decreases significantly due to certain circumstances, including retirement, you can request that the SSA recalculate your benefits and your premium surcharges could be eliminated or reduced. 

For an article in The New York Times on determining the optimal time to claim Social Security benefits and ways to maximize benefits, click here.

For the SSA's Retirement Benefits page, click here.

Social Security Shortfalls Are Predicted to Begin a Year Earlier Due to the Pandemic

The Social Security trustees are projecting that due to the economic downturn caused by the pandemic the Social Security trust fund will be depleted in 2033 -- one year earlier than the previous estimates. Once the fund is depleted, Social Security benefits will be reduced unless Congress acts in the interim. 

Social Security retirement benefits are financed primarily through dedicated payroll taxes paid by workers and their employers, with employees and employers splitting the tax equally. Employers pay 6.2 percent of an employee's income into the Social Security system, and the employee kicks in the same. Self-employed individuals pay the entire 12.4 percent Social Security payroll tax. This money is put into a trust fund that is used to pay retiree benefits. 

The trustees of the Social Security trust fund now predict that if Congress doesn’t take action, the fund’s balance will reach zero in 2033. The coronavirus pandemic has caused job losses, lowered wages and interest rates, and a drop in gross domestic product, which means payroll taxes declined. Sadly, an increase in deaths of older Americans due to Covid helped to keep Social Security from losing as much money as some had feared.  The impact of the pandemic over the longer term is still unclear, and the trustees said they are making no long-range assumptions “given the unprecedented level of uncertainty.”

Once the fund runs out of money, it does not mean that benefits stop altogether. Instead, retirees’ benefits would be cut. According to the trustees’ projections, the fund’s income from payroll taxes would be sufficient to pay retirees 76 percent of their total benefit (or 78 percent if the Disability Insurance fund is included).

The trustees recommend that Congress take immediate action to address the problem, but Social Security reform is not a top priority in Washington right now. Steps Congress could take to shore up Social Security include eliminating the cap on income subject to tax. Right now, workers pay Social Security tax only on the first $142,800 of income (in 2021). That amount can be increased, so that higher-earning workers pay more in taxes. The Social Security tax or the retirement age could also be increased.

For more on what the trustee’s report means, click here.  

You May Be Overestimating Your Social Security Benefits

Studies have found that workers overestimate how much they will receive in Social Security benefits when they retire. Having a good understanding of the realities can help you plan for retirement. 

Researchers from the University of Michigan studied the expectations of workers and found great uncertainty about future Social Security benefits as well as a tendency to overestimate the amount they think they will receive. Half of the workers surveyed in the study did not know their benefit amount. The average overestimation of the benefit was $307 a month, more than one-quarter of the average forecasted benefit. The study found that as workers got older, however, they were more likely to understand their benefits and less likely to overestimate benefit amounts. 

Nationwide Retirement Institute’s annual Social Security survey similarly found that future retirees over age 50 expect to receive a higher payment than what actual retirees receive.  In this survey, respondents were off by nearly $200 a month. And almost 70 percent of Baby Boomers mistakenly believe that if they claim Social Security early, their benefit will go up automatically when they reach full retirement age. Not surprisingly, the Nationwide survey also found that more than half of workers are not confident in their understanding Social Security or how much money they will receive. 

Not understanding how much you will get from Social Security could lead to you to save less money for retirement while you are working. Setting aside money in a retirement account early can lead to big dividends later. The University of Michigan study found that spending and saving choices based on incorrect expectations lead to less ability to spend in retirement. 

Confusion about benefits could also cause you to start taking benefits before you should. Both the University of Michigan study and the Nationwide survey found that workers have misconceptions about claiming Social Security benefits early. Many people do not understand that if they take Social Security benefits early, it will permanently reduce their benefits. 

Individuals who file for Social Security benefits at age 62 – before their full retirement age -- will receive around 72 percent of their full benefit. On the other hand, if you delay taking Social Security benefits beyond your full retirement age your benefit will increase by 8 percent for every year that you delay, in addition to any cost-of-living increases, up to age 70.

For those retiring in 2021 at their full retirement age, the average monthly Social Security benefit is $1,543 for an individual and $2,596 for a couple who both receive benefits, meaning that many will receive less than this amount based on their work and earnings history. The maximum monthly Social Security benefit that an individual can receive in 2021 is $3,895 if they wait until age 70 to collect.  And keep in mind that many retirees have their Medicare Part B and Part D premiums deducted from their Social Security checks.

To gain a solid understanding of your expected Social Security benefits, you can create a my Social Security account. The account will give you retirement benefit estimates based on what you are currently earning.