Medicare Open Enrollment Starts in 2 Weeks!

Hello, readers! Medicare open enrollment will begin on October 15 and runs through December 7. This is your opportunity to review your Medicare options, make any necessary changes, and ensure you have the coverage that best meets your needs for the upcoming year. Don’t miss out—mark your calendars and be prepared to take advantage of this important enrollment period!
-The Editors

🏥Retirement Watch:

Work After Retirement: The Struggles of Older Americans in Today’s Economy

Meet Larry and Joyce Gesick, a couple who exemplify the reality many older Americans face today. At 77, Larry still works part-time, unloading trailers at a local supermarket in St. Petersburg, Florida, for $14.75 an hour. His wife, Joyce, 66, is a full-time legal administrator, making $14 an hour. This wasn’t part of their retirement plan, but like millions of others, they returned to work not by choice, but necessity.

The Changing Face of Retirement
The Gesicks’ story is not unique. According to Pew Research, one in five Americans over the age of 65 are still working, amounting to about 11 million individuals. For many, what used to be a time of relaxation has transformed into what labor economist Teresa Ghilarducci calls the "work, retire, repeat syndrome."

Why Today’s Retirement System Falls Short
Ghilarducci traces the current situation to the advent of the 401K plan. Originally conceived as an alternative to traditional pensions in the 1970s, the 401K plan placed the responsibility of saving for retirement on individual workers. While the idea was that Americans could learn the skills to manage their retirement savings, many, like the Gesicks, received little guidance on how to prepare for life after work.

The Gesicks' Financial Struggles
For Larry, who grew up on a farm, financial literacy was never a part of his upbringing. “Nobody there instructed any of us to put money aside and make your own way later on down the road,” he said. This lack of preparation followed the couple into adulthood, where they viewed their 401Ks more like savings accounts than retirement funds.

Now, the Gesicks face the stark reality of financial strain. With a mortgage, car loan, and $12,000 in additional debt, even Social Security and a small pension are not enough. Despite their combined paychecks, they end each month with only $50 left after covering their expenses.

Lessons for Those Nearing Retirement
Whether you’re nearing 65 or already in retirement, it’s important to plan ahead. Here are a few critical steps to take:

1. Calculate the best time to claim Social Security – Waiting until age 70 can lead to significantly higher monthly payments.

2. Build an emergency reserve – If you’re still working, aim for six to twelve months’ worth of living expenses. If you’re retired, aim for one to two years.

3. Keep funds in a safe, accessible account – Ensure that this reserve is in an interest-bearing account that’s easily accessible for emergencies.

The Gesicks are optimistic that they’ll make it through their financial difficulties, with Joyce saying, “we can see the light at the end of the tunnel.” However, their story serves as a cautionary tale for others: retirement today requires careful planning and financial literacy. As more Americans find themselves in similar situations, the question remains—will our retirement system adapt to meet the needs of the future?

Read more here.

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🎲Poll Time

📚Study of the week:

How Working Can Impact Your Social Security Benefits

You can keep working while receiving Social Security retirement or survivor benefits, and it might even increase your benefits over time.

Each year, Social Security reviews your earnings. This is because your retirement benefit is calculated based on your 35 highest-earning years. If you're still working and your recent earnings are higher than any of those top 35 years, Social Security will recalculate your benefit. This means you could receive more money each month moving forward, since your benefit is based on a higher average of lifetime earnings.

If you're getting survivor benefits, your additional income could also help increase your retirement benefit when the time comes.

How Much Can I Earn and Still Get Benefits?

You can work and receive Social Security at the same time, but there are limits to how much you can earn without reducing your benefits:

• Under full retirement age: If you're younger than full retirement age and earn more than $22,320 in 2024, your benefits will be reduced. Social Security will deduct $1 for every $2 you earn over that limit.

• The year you reach full retirement age: In 2024, if you earn more than $59,520 before reaching full retirement age, they’ll reduce your benefits by $1 for every $3 you earn over that amount.

Once you reach full retirement age, there’s no limit on how much you can earn, and your benefits won’t be reduced.

Special Rule for Part-Year Retirement

If you earn more than the yearly limit but only work part of the year, Social Security may still pay your full benefits for any month that you’re considered fully retired, no matter how much you earned earlier.

Examples:

1. Under full retirement age all year:
   You earn $32,320 in 2024, which is $10,000 over the $22,320 limit. Social Security will reduce your benefits by $5,000.

2. Reaching full retirement age in August 2024:
   You earn $69,000 in 2024, with $63,000 earned before August. Your benefits will be reduced by $1,160, but after August, you’ll get your full benefits with no deductions.

What Counts as Earnings?

Only wages from a job or net earnings from self-employment are counted. Income from pensions, annuities, investments, or veterans benefits doesn’t affect your Social Security.

If you’re still working, you can use Social Security’s calculator to see how your earnings might affect your benefits.

A great PDF write up from the Social Security Office here!

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