The Experts at AARP

Cheat Sheet / Updated 02-22-2024

Take this opportunity to explore new opportunities and make the most of the decades ahead. Keep your finances, your living arrangements, and, most importantly, your health in peak performance. To get started, you may be interested in finding a new job, getting a handle on your finances, and trying your hand at yoga.

Article / Updated 08-03-2023

Hearing loss is about clarity not volume. Most people think of hearing loss as simply turning down the volume on a TV, which makes all sounds quieter. But hearing loss is more like turning down the volume on only specific frequencies or pitches of sound so while some sounds are quieter others are just as loud. Many people aren’t a very good judge of their own hearing. In fact, most people tend to believe their hearing is better than it actually is, according to research from our own team at Johns Hopkins University. Why are we such bad judges of our own ability to hear? Barely noticeable changes One answer is that hearing loss happens gradually and slowly over time. The snail-like pace at which our hearing declines may make it difficult to notice any changes. Early signs of hearing loss may be situational. We might miss a word here and there over dinner in a noisy restaurant or have trouble following a conversation with someone soft-spoken. It is easy to shrug off the seemingly isolated early incidents. Everyone else is mumbling! For most people, hearing loss affects their ability to hear high frequencies (whistling or birds chirping) while leaving the ability to hear low frequencies (animal grunts or thunder) relatively untouched. But not all sounds fit neatly into low or high frequencies. Speech has sounds from several frequencies. In fact, a single word can represent multiple frequencies. For example, the word “show” includes “sh” (high-frequency) and “ow” (low-frequency). With the most common types of hearing loss, the “sh” would be difficult to hear while “ow” would be perfectly audible. This results in a phenomenon where you would hear someone talking, but what they’re saying isn’t clear. This is why a common phrase among those with hearing loss is “I can hear you but you’re mumbling!” Hearing some sounds but not others affects clarity, which isn’t always something people think of when they think of hearing loss. Hence, sometimes it’s hard to make that leap to suspecting hearing loss. Compensating until you can’t Our brain plays a big role in making it tough to recognize hearing loss, especially when it first starts. Generally, our brains are great at their job of processing incoming information and can often still make sense of unclear speech. The brain does this by using contextual information like the general topic of conversation to fill in the blanks. This means that as we develop hearing loss, our brains initially do a pretty good job of making up for any hearing loss. But compensating for hearing loss requires a lot of extra energy and effort from our brains. Over time, our hearing tends to worsen and our brain’s ability to compensate lessens until it actually starts to slow down as well from the fatigue of keeping up with all the unclear sound. Don’t know what you’re missing Our brains are good at noticing new auditory information and ignoring common and mundane sound. Think about being in your own home versus visiting a place for the first time. In our own homes, we tend to ignore familiar sounds — the humming of appliances, creaking floorboards, or squeaking doors. But in a new place, our brains are on high alert, and we notice every single new sound. The same concept goes for common environmental sounds when we aren’t specifically listening for them: traffic noise from other cars while driving or chirping birds while walking through the park. When we aren’t specifically listening for a sound, it often becomes forgotten background noise. This makes it difficult to realize what we miss when we have hearing loss. Has your hearing declined? Given how difficult it is for us to judge our own hearing ability, consider having a conversation with those close to you to help you identify any hearing loss. Your hearing loss can impact them, too. In many situations, it is a spouse, child, companion, or other frequent communication partner who first detects signs of hearing loss — from little things like noticing you turn the TV up louder to feeling isolated from you because conversation has become more difficult. The perceptions of those around you is a great way to gauge your own hearing. It is also often helpful to look for clues in how hearing may be affecting your day-to-day life. Consider, for example, any changes in your social activity, communication patterns, and regular activities to help identify any hearing loss. You may be subconsciously avoiding situations or even altering the way you engage with people because of difficulty hearing. Take a minute to ask yourself some of the following questions to get a better feel for whether you may have some hearing loss: Are you asking others to repeat things more often? In follow-up, do you find others saying things like “Never mind, I’ll tell you later” when you ask them to repeat something? This may be a sign that others have begun to notice your hearing difficulties. Are you having trouble following conversations in meetings? Do you find yourself believing many other people mumble too much? Do you have difficulty hearing people when you aren’t looking directly at them when they speak or when they turn away from you during conversation? Have you felt embarrassed to contribute to conversations because you’re unsure of the topic? Do you feel excluded at dinner or other group conversations or unable to keep up? Do you have any difficulty hearing small children? (People with hearing loss often find children’s voices, which are higher pitched, difficult to understand.) Do you turn up the volume on electronics such as the television? Do you avoid talking on the telephone because it’s fatiguing and hard to make out what the other person says? Do others around you complain that the TV is too loud? Do you find yourself avoiding restaurants or social gatherings more than you used to because they’re too noisy? Do you find yourself more tired than usual when engaging in conversation? Are you avoiding activities you used to regularly participate in, such as attending concerts, plays, meetings, or religious services? If you answered “yes” to any of these questions, it’s a good idea to get your hearing tested. Read on to find out more. When to get your hearing tested Hearing loss is very common and more than half of all adults over the age of 60 experience hearing loss. It may be a good idea to schedule a hearing test when you turn 60 if you notice any of the signs of hearing loss mentioned above, whichever comes first. Screening, testing, and diagnostics You may see the terms hearing screening or hearing testing thrown around and sometimes you’ll see the term diagnostic hearing test versus self-guided hearing test. Here’s what these mean: Hearing screening refers to any assessment or task that helps identify whether or not you likely have some hearing loss but offers little details. Hearing screenings vary in how they’re performed and could be anything from whether you can hear someone whisper in your ear to a task where you have to identify numbers spoken in the presence of background noise. Hearing testing refers to pure-tone audiometry tests (see Chapter 7) that provides sufficient detail to describe your hearing in each ear using either the hearing number or categories like mild, moderate, severe, or profound. Self-guided hearing testing refers to hearing testing that is performed by you without the help of a professional, such as on a smartphone. Diagnostic hearing testing refers to a full battery of tests performed by a hearing professional, usually an audiologist, for the purpose of diagnosing hearing loss. Establishing a baseline A baseline hearing test simply refers to your first diagnostic hearing test, the results of which become the baseline or reference point for future hearing tests to keep track of any changes in hearing. The baseline test also helps hearing professionals create a custom plan for you based on patterns in changes in your hearing over time. We recommend establishing a baseline as soon as you suspect hearing loss or at least by the time you turn 60, even if you’re not particularly concerned with your hearing at the moment. Making the appointment Here are the details you need to know to make an appointment: Insurance, including Medicare, usually covers at least one diagnostic hearing test a year when ordered by a physician (check with your provider when in doubt). An audiologist will usually perform the diagnostic hearing test. Request a referral from your primary care provider (if required by your insurance company). Search online for a local audiologist near you that accepts your insurance or use websites like HearingTracker.com, which maintains a directory of audiologists from across the country with patient reviews. Curious about testing your own hearing? Try one of numerous smartphone- or web-based hearing tests and screeners such as Mimi Hearing or SonicCloud, which are free and can be found in your smartphone app store. You could also try the AARP at-home hearing screener found at nationalhearingtest.org (free for AARP members!).

Article / Updated 06-07-2023

As prices climb for nearly everything, from food to gas to health care and beyond, what can you do to spend less and save more? One way to save is to cut back on utility costs. In the winter, for instance, keep cold air outside and warm air inside by caulking and weather-stripping doors and windows. Keep your fireplace flue tightly closed. Seal any air leaks where plumbing or electrical wiring comes through the walls. Then make sure your home is insulated properly. Following, are 34 ways to save money on utilities, including water, electricity, and heating and cooling. How to save on water costs One of the simplest things you can do to save money on utilities is to fix that leaky toilet. That steady draining can waste 200 gallons per day and hundreds of dollars a year on your water bill! Some fixes are free (the chain might just be hung up). You can replace the whole mechanism for about $20. Update every sink and tub with a new faucet or aerator marked with the WaterSense label. Aerators, which mix air into the water, can cut water consumption by 700 gallons per year. Most water heaters come from the factory set at 140 degrees — hot enough to scald. Turn it down to 120 degrees to avoid a safety risk, save money, and slow mineral buildup and corrosion in your water heater and pipes. The next time your water heater quits, replace it with a tankless heater that costs about the same but is likely to last more than 20 years, as opposed to the 10- to 15-year life expectancy of a tank heater. Plus, tankless models are 24 to 34 percent more energy efficient. But tankless heaters can heat only so much water at once, so if you like to shower and run several appliances at once or have a large household, you may need more than one. Stop prewashing dishes if you have a modern dishwasher. It’s not necessary. Just scrape them off thoroughly into the garbage and load them. You’ll save about 55,000 gallons of water over the lifetime of the dishwasher. That can save about several hundreds of dollars, plus it’s good for the environment — and avoids lots of unnecessary work. Wash clothes in cold water. You’ll save around $60 in energy costs a year. Plus it’s gentler on your clothes and protects them from fading, shrinking, or bleeding. With today’s detergents, your clothes will be just as clean. Install a low-flow showerhead. You won’t even notice the difference, because a low-flow fixture reduces the volume of water but does not affect the water pressure in any way. Save 2,900 gallons a year, according to the U.S. Environmental Protection Agency. Insulate your hot water lines. Preformed foam insulation jackets slip over hot water pipes. You can easily lower your energy bill by $40 per year. How to save on electric bills Keep your stovetop shiny. When the metal pans that surround burners on older stovetops become blackened from charred spillover, they absorb heat. When they are clean and shiny, they reflect heat and require less energy to cook food. If the dish you are making will fit in your toaster oven, cook it in there. You can slash the energy cost by more than half over a full-size electric oven. You save time, too, because a toaster oven preheats much faster than a full-size oven. Banish power vampires to save money on home utility bills. The modern home has lots of devices that suck electricity even when turned off, costing an average of $100 per year, according to the U.S. Department of Energy. Chargers for phones, tablets, and other cordless devices drink juice even when they are not charging anything — so unplug them. Likewise, unplug televisions, computers, cable boxes, and game consoles — anything with a little indicator light. Ask your utility companies for help. If you are having trouble paying your utility bill or want more information on how to lower your energy bills, your utility company should be your first contact. Many offer budget-billing programs in which you can pay a set amount each month. Some offer special protections for customers who have disabilities, are on Supplemental Security Income, are on medical life-support equipment, or are having difficulty paying their bill. The utility company will devise an affordable payment plan or put you in touch with a nonprofit that may be able to help. Ask about rate options as well. Some offer a low-income rate discount. Others offer time-of-use rates that lower bills if you can move your consumption off-peak. Install motion detectors. These sensors can be connected to lights, fans, or any other electrical device. They save energy dollars by automatically turning on the electrical device when you enter a room or area of your property and turning the device off when you leave. They can also make your home more secure by automatically turning on exterior lights if there is an intruder. Upgrading to LED lighting is another way to save money on utility bills. You can cut the amount of energy used by your light bulbs by up to 90 percent by switching to light-emitting diodes (LEDs) from traditional incandescent bulbs. LEDs also last 25 times longer, meaning you won’t spend as much on new bulbs over time. Test for a tight seal on your refrigerator by closing the door on a dollar bill; if you can easily pull the dollar out, the seal needs replacing. Verify your fridge settings. Place a thermometer in your refrigerator overnight and check it in the morning: The ideal temperature for food safety is slightly below 40 degrees, according to the U.S. Food and Drug Administration. Too cold wastes energy and money. Too warm is unsafe. If the temperature is off, adjust accordingly. Upgrade your appliances. Sure, that old refrigerator has been running since 1963. But it’s probably sucking up a lot of juice while it’s cooling your beer. New appliances with the Energy Star designation are more efficient than average appliances. Energy Star televisions, for example, use 3 watts or less when they are turned off, which is about 50 percent less than average. The U.S. Environmental Protection Agency keeps a list of the most energy-efficient appliances. How to save on heating and cooling bills When looking to save money on utilities in the winter, try lowering your home’s temperature by 7 to 10 degrees for eight hours a day. It could save you up to 10 percent a year on your heating bill. To help regulate your household temperature, install a programmable thermostat so the settings change automatically. If you're looking for ways to save money on utilities in the summer, draw the blinds when the sun is blazing. About 76 percent of the sunlight that hits your windows enters to generate heat inside your home, according to the U.S. Department of Energy. A recent study found that 75 percent of blinds stay in the same position every day. Medium-colored draperies with white-plastic backings can reduce heat gains by 33 percent. If you have a ceiling fan, use it. The U.S. Department of Energy says that when you use air conditioning, a ceiling fan will let you raise the thermostat about four degrees in the summer. Fans that carry the Energy Star label move air 20 percent more efficiently than those that don’t. In the summer, you should set ceiling fans to go counterclockwise to blow air downward, according to Home Depot. Inspect for leaks at windows and doors with a candle or lighted incense stick. Sealing them can cut a $1,000 heating and cooling bill by $200. Really! Gaps can reduce air-conditioning efficiency by 20 percent or more. Hold a candle or an incense stick to the seams where two ducts connect; the smoke will tell you whether air is escaping. Tape it! Seal around outlets and switches. Stop chilly drafts by installing inexpensive foam gaskets available at most home improvement centers. Staying cool is tough enough during a massive heat wave, but add soaring energy prices and inflation to the mix and it can be downright expensive, too. In 2022, energy costs were up 41.6 percent year over year. Blasting the air conditioner all day and stocking up on an endless supply of bottled water aren’t your only options. Here are other ways to stay cool without breaking the bank: Give your air conditioner a tune-up. If you do run your air conditioner, make sure it’s operating as efficiently as possible. Otherwise, the unit has to work harder, which means more money spent on energy. Simple upkeep, like changing the filters, can improve the unit’s performance. Experts say that with rising costs, you are trying to extend the lifetime of the unit so you don’t have to replace it in the near term. If your air conditioner has an energy-saver mode, use it. Shun the oven and dryer. Reconsider cooking a three-course meal in a heat wave. Ovens give off heat, warming the room by a couple of degrees. The same goes for your dryer, which emits heat when in use. Avoiding it when the temperature is sizzling can be a cool strategy. Take advantage of the heat and air-dry your clothes. Stay hydrated. Drinking plenty of water and using ice will lower your body temperature, keeping your cooler. You may not need to pay for bottled water; look into the safety of your tap water. Keep it light. In cold weather wear a sweater, but in extreme heat the fewer clothes the better. Wearing loose-fitting, lightweight clothes and sleeping with sheets instead of heavy blankets can go a long way toward keeping you cool. Tap your community. Many communities across the country provide places for people to stay cool during the summer months, including community centers, cooling stations, malls, and libraries. They are usually air-conditioned and don’t charge admission fees. Museums, movie theaters, and playhouses can be great places to stay cool and be entertained. Shop around to save. Stocking up on water (if you don’t drink your tap water), ice cream, ices, or whatever you need to stay cool can add up. Without a doubt, inflation is making groceries more expensive, but take advantage of sales, loyalty clubs, and coupons. Pay attention to the price per unit when purchasing water. You want to ensure you’re getting the most for your money. If possible, buy your water in bulk to save. Get a furnace filter subscription. Changing your furnace filter every three months reduces heating bills and prolongs furnace life. But who remembers? Get a filter subscription (many online stores offer them) and stick in a new filter whenever one arrives. Cover your windows. Homes lose about 30 percent of their heating energy through windows in the winter, and 76 percent of sunlight that falls on double-pane windows becomes heat in the summer. Consider blackout curtains. Don’t cover vents. Make sure your heating and cooling air vents aren’t blocked by rugs, bookcases, or other furnishings. Blocking vents strains the furnace, shortening its life and increasing your energy bill. Stop fireplace drafts. Dampers alone rarely stop the flow of air through your chimney; a reusable inflatable plug or chimney draft stopper helps seal out the cold. Reinforce windows. If you have single-pane windows and can’t afford to add outside storm windows, install custom-fit acrylic or glass panes instead. These interior storm windows can be pressed into place and sealed to create an airtight fit. Reduce air-conditioning costs by as much as 10 percent by keeping AC condensers and window units shaded, perhaps by installing an overhead awning. For whole house HVAC, inspect the ductwork carefully and seal any seams or gaps. Doing so reduces the amount of chilled or heated air escaping through the ductwork by up to 20 percent. Many energy providers offer free or subsidized energy audits, which can identify problem areas in your home and offer suggestions and discounted solutions to fix them. They may also offer discounts for low-income users or deals for those who agree to preheat their home during off-peak hours. Tap into energy assistance aid with the following programs: Low-Income Home Energy Assistance Program (LIHEAP): The Low-Income Home Energy Assistance Program, or LIHEAP, is a federal program that helps millions of low-income Americans afford to heat and cool their homes. If you need help paying your utility bills, replacing your furnace, weatherizing your home, or making other energy-related improvements, you can apply. Operated by the states, LIHEAP also provides crisis or emergency assistance for people who have received a shut-off notice or had their service disconnected. Details of the program vary by state. To apply, contact your state LIHEAP office or reach out through the National Energy Assistance Referral hotline at 866-674-6327. Weatherization Assistance Program (WAP): Weatherization is one of the best ways to save on utilities, if not the best. The Weatherization Assistance Program, or WAP, helps low-income families lower their energy bills by making their homes more energy efficient. The U.S. Department of Energy provides funding to states, U.S. overseas territories, and Indian tribal governments. Those governments have a network of nonprofits, community groups, and local government agencies that provide weatherization services to households in each state. More information is available at the Weatherization Assistance Program website or 888-771-9404. Special preference goes to families with someone 60 or older, children, or one or more members with a disability. Tech to Save You Money Get a smart thermostat. In addition to operating on a set schedule, smart thermostats learn your temperature preferences, and some can sense if someone is in the room. You can operate them from your smartphone, tablet, or laptop to make the house cozy when you return. Buy a smart sprinkler controller. Tell the controller what type of soil, plants, or lawn you are watering, and the device will factor in the weather conditions and weather forecast to deliver exactly the amount of water your plants need.

Article / Updated 03-22-2023

Copyright © 2020 by AARP. All rights reserved. Something about Social Security stirs the popular imagination. Rumors and phony stories have attached themselves to the program from the start. Sometimes you can identify the grain of truth that sprouts into a tall tale. Other times you can’t. Before Social Security got off the ground in the 1930s, newspapers in the Hearst chain spread the story that people would have to wear dog tags stamped with their Social Security numbers. (The dog tag idea actually was proposed but never approved.) Many people continue to believe that Social Security maintains an individual account with their contributions in it. The reasoning is easy to see, but the story isn’t true. Rumors swirl about the state of Social Security’s finances, hidden meaning in the numbers, and other topics that find fertile ground on the internet and are spread through social media. Unfortunately, myths can be harmful because they undermine public understanding of Social Security and confidence in the program at a time when the nation needs a constructive, fact-based discussion. Myth: Social Security Is a Ponzi Scheme This is a claim made by critics of the program who really are saying that Social Security is inherently unbalanced and doomed to fail. Their charge is based on a superficial comparison of Social Security with a type of fraud associated with Charles Ponzi, a charismatic con artist in the early 20th century. Ponzi’s infamous scheme involved speculation in international postal coupons. He lured his victim investors by promising returns of 50 percent at a time when banks were paying around 5 percent interest. Early investors were paid with money from later investors, a hallmark of Ponzi schemes. Such frauds may work for a little while, but inevitably they collapse. (Just ask Bernie Madoff.) The misleading comparison of Social Security to a Ponzi scheme is based on the fact that Social Security does require one group (workers) to help support another group (retirees and other beneficiaries). This system is sometimes described as a pay-as-you-go system. The Ponzi label falls apart, however, when you think it through. For one thing, Social Security doesn’t rely on a soaring base of contributors, as Ponzi schemes do. Instead, it requires a somewhat predictable relationship between the number of workers and beneficiaries, along with adequate revenues. A lower U.S. birthrate starting in the 1960s and increasing life expectancy that has resulted in an aging of the population are significant causes of Social Security’s expected shortfall. Social Security has other fundamental differences from a Ponzi scheme. Importantly, it’s transparent. Each year, the Social Security Administration (SSA) releases information about its financial state in exhaustive detail, along with projections 75 years into the future, based on different economic assumptions. Scams, by contrast, thrive on secrecy and deception. And unlike a Ponzi scheme, the money not used to pay current benefits has built up a surplus of $2.9 trillion. Another basic difference between Social Security and a Ponzi scheme is in the goals. A crook hatches a Ponzi scheme to get rich at others’ expense. Social Security provides social insurance to protect people. Money goes from one generation to help support another generation. Your tax contributions help support your parents. One day, the contributions of future generations will help support you. Myth: Your Social Security Number Has a Racial Code in It The nine-digit Social Security number has long fascinated people, because it is a unique, personal identifier in a nation that cherishes individuality. One myth is that the number contains a code that identifies the race of the cardholder. According to the myth, the code can be found in the group number, the fourth and fifth digits, in the middle. In one version of the rumor, a person’s race could be determined by whether the fifth digit in the Social Security number is even or odd. (Group numbers range from 01 to 99.) One explanation for this myth is that people have misinterpreted the meaning of the term group number, wrongly assuming that it referred to race. This rumor has caused some people to worry that their Social Security number makes them vulnerable to discrimination by potential employers or others who may spot the racial code in an application. According to the SSA, however, the term group number refers simply to an old system of numerical grouping that traces back to Social Security’s early days, when everyone’s records were stored in paper files. Employees used the two-digit group number to help organize the files. If you want to find possible meaning in your Social Security number, look to the first three digits — the area number. Before 1972, the first three digits were based on the state where the card was issued; after that, they were based on the mailing address on the application. This is no longer true, however. In 2011, the agency began assigning the first three digits randomly, as part of a strategy to protect people from identify theft. Myth: Members of Congress Don’t Pay into the System This myth gets its strength by combining two rich symbols, Social Security and Congress. Variations of the myth include the idea that lawmakers get a special break on Social Security payroll taxes and that they’re allowed to collect benefits at an earlier age than the rest of us. In the past, Congress and the rest of the federal government were covered under the Civil Service Retirement System, which was created years before Social Security. Under a 1983 law, however, all three branches of the federal government were steered into Social Security. As a result, since 1984, members of Congress, the president, the vice president, federal judges, and most political appointees have been required to pay taxes into the Social Security system like everyone else. And the same rules apply to them as apply to you. Vestiges of the old setup endure for some federal employees. Those hired before January 1984 aren’t required to participate in the Social Security system. All federal employees hired since 1984, however, make Social Security payroll tax contributions like everyone else. That includes lawmakers. Myth: Social Security Is Going Broke People have heard so much talk about Social Security’s finances that it’s easy to see why they may think the program is going off the cliff. That’s not the case, however. Social Security can pay full benefits until about 2035 — and it can continue to pay about 80 percent of benefits thereafter, according to the program’s trustees. The gap is caused by the fact that a relatively smaller number of workers will be supporting a relatively higher number of retirees. The large number of Baby Boomers retiring, combined with the smaller number of individuals paying into the system through the payroll tax (because of lower birthrates), has caused Social Security benefits to surpass the amount of payroll taxes coming in. To make up for this shortfall, Social Security will increasingly draw down its trust funds of $2.9 trillion to supplement the revenues that will continue to pour in (primarily through payroll taxes). The funding gap can be closed through a combination of modest tax increases and/or phased-in benefit cuts for future retirees. Although it has been difficult for lawmakers to make a deal, various policy options show that it’s possible. Assertions that Social Security is running out of money erode the confidence of younger people, who will need Social Security one day. Polls have shown, for example, that substantial numbers of future beneficiaries — as high as 80 percent — worry Social Security won’t be there for them when they reach old age. This undue pessimism helps reinforce the next myth. Myth: The Social Security Trust Funds Are Worthless Social Security revenues stream into U.S. Treasury accounts known as the Social Security trust funds. One trust fund pays benefits for retirees and survivors; the other pays benefits for people with disabilities. (The revenues come from the payroll tax and some of the income tax paid by higher-income retirees.) Most of the trust-fund money is used quickly to pay benefits. But a big surplus has developed over the years — about $2.9 trillion. Under the law, Social Security is required to lend the surplus funds to the federal government, which is then obliged to pay the loan back with interest. This lending takes place through investment in special-issue, medium- and long-term Treasury securities that can always be redeemed at face value. This sanctioned lending, by the way, is the reason you may sometimes hear claims that the government “raids” the Social Security trust funds. Those who contend that the trust funds are worthless are really predicting that the federal government won’t make good on that debt — even though the bonds are backed by the full faith and credit of the United States, just like other Treasury bonds held by the public. Investors throughout the world retain confidence in this nation to make good on the debt it owes, as demonstrated by the ongoing demand for U.S. Treasury bonds, even at a time of government deficits and budget battles. In the coming years, Social Security will rely increasingly on income from bond interest and actual bond sales to pay benefits. That means the U.S. government faces a large and growing bill to pay Social Security back for the money it has borrowed over the years. There are no recommendations here on how the government should pay its bills. But if you consider those matters, just remember that Social Security isn’t the cause of the nation’s current deficits. Myth: You’d Be Better Off Investing in Stocks You hear this myth more often during boom times, but for the average person, it’s highly dubious at any time. To be clear: It’s important for people to save as much as they can, and stock investments may be an important element in your savings. But the notion that you’d be better off without Social Security usually doesn’t hold up. For one thing, Social Security and stock investing aren’t substitutes for each other. Unlike stocks, Social Security provides broad protections for you and your loved ones, including benefits for disability, survivors, and dependent family members. These benefits may be payable if tragedy strikes at an early age, before you’ve had the many years needed to build up a nest egg. Also, Social Security shields retirement income from risks that are inherent in the financial markets. Although stock returns may be greater, stocks are more volatile. If a market collapses at the wrong moment, your holdings can be hammered. Social Security, by contrast, provides a guaranteed benefit. If you truly want to save for yourself, it helps to consider how much of a nest egg you need to match the protections you get from Social Security. You could buy an annuity to provide monthly income under certain circumstances. But what would it cost? Suppose you were trying to equal the average Social Security retired worker benefit (about $1,500 a month in 2020). You would need hundreds of thousands of dollars to purchase a survivor annuity that matched the benefit, starting at age 66 and protected for inflation. A higher-paying annuity meant to equal Social Security’s family maximum for top earners (more than $4,500 a month) would cost nearly a million dollars. Annuity price tags vary as interest rates change; also, insurance companies charge different amounts, so you can’t find one lasting dollar figure. Neither of the products described here equals Social Security’s protections. They don’t cover family members while you’re alive, including a spouse or children, nor do they offer child survivor benefits when you die. Could you save half a million bucks? Suppose you had 40 years to build up the nest egg. At a 3 percent rate of return, you’d have to set aside about $6,500 per year. Most people don’t save that much. Many people have nothing left over by the time they pay the monthly bills. Of those who do save, many could set aside more. Also, many people take money out of their nest eggs when needs arise. Unfortunately, such withdrawals can do lasting harm. Saving requires long-term discipline and possibly short-term sacrifice. About one in four adults who have yet to retire report no retirement savings or pension, according to a Federal Reserve study in 2019. While savings do increase with age, millions of older workers lack adequate nest eggs. Imagine how much more insecure your retirement would be if you had to depend completely on yourself to save for retirement. Maybe you could pull it off, but most people are better off with the guarantees of Social Security. Myth: Undocumented Immigrants Make Illegal Social Security Claims Tales that undocumented immigrants are soaking up Social Security benefits pick up steam periodically. As one popular version has it, Congress is about to consider a bill making benefits legal for workers who are in this country without authorization. This notion makes a lot of people angry. It’s also possible that the myth is spread when people stand in line at a Social Security office and make assumptions about others around them. Whatever the cause, the myth isn’t true. Plus, the myth obscures an irony: Undocumented workers actually add revenue to the system through the Social Security taxes that are taken out of their pay, while most never claim benefits. Under the law, undocumented immigrants are prohibited from claiming Social Security, as well as most other federal benefits. (Certain exceptions to this ban are allowed, such as for emergency medical treatment and emergency disaster relief.) In reality, some undocumented workers use fake Social Security numbers to get jobs. Payroll taxes are then deducted from their pay, just as they are from everyone else’s, and credited to the Social Security trust funds. Generally, these workers don’t collect benefits. In fact, SSA estimates that undocumented immigrants contributed $12 billion net — that is, revenue paid into the system over benefits paid out — into the Social Security funds in 2010. Myth: When Social Security Started, People Didn’t Even Live to 65 This observation shows how the “facts” can be misleading. Its underlying point — that Social Security was designed to pay little in benefits because people wouldn’t live long enough to collect them — isn’t true. Back when Social Security was created, life expectancy was shorter; a high rate of infant mortality meant that many people didn’t reach adulthood, and life expectancy at birth was especially low. (In 1930, it was about age 58 for men and 62 for women.) If you survived childhood, though, you could expect to live many more years. Among men who lived to 21, more than half were expected to reach 65. If you reached 65, your life expectancy came to about 78. (Women lived longer than men, as they still do.) Life expectancy at 65 has increased since the 1930s, to be sure, but much less dramatically than life expectancy at birth. The architects of Social Security knew the program would serve many millions of beneficiaries as time passed. They concluded that age 65 fit with public attitudes and could be financed through an affordable level of payroll taxes. The notion that Social Security was designed to cost little because people died early is simply not true. Myth: Congress Keeps Pushing Benefits Higher Than Intended Commentators sometimes assert that, over the years, generous lawmakers have hiked Social Security benefits far beyond the intention of the program’s founders. These heaped-on benefits, the story goes, explain why Social Security faces a future shortfall. It’s true that Congress has enhanced benefits on several occasions since the program’s initial approval in 1935. But such changes were consistent with the intent of Social Security as a social insurance program for all Americans. By the important measure of replacement rates (how much of your pre-retirement income you get back in benefits), Social Security has been stable over the decades. In fact, replacement rates are now declining because of the gradually increasing age for full retirement benefits that Congress approved in 1983. When Social Security first began, benefits were limited to payments to retirees. The intent of the program, however, was to provide meaningful social insurance for certain risks in life and to extend such protections to dependent family members. Family benefits (including for survivors) were added in 1939, followed later by coverage for disabled workers and their dependents. Automatic annual cost-of-living increases took effect in 1975 to replace the ad hoc approach to inflation adjustments that had been followed previously. The fallacy is that these reforms undermined Social Security’s long-term stability. Studies have shown that the addition of survivor and auxiliary benefits was offset to some degree by slower growth in benefits paid directly to workers. The anticipated shortfall reflects the fact that relatively fewer workers (because of a lower birthrate since the 1960s) will be supporting a bigger population of longer-living retirees in the coming years. Myth: Older Folks Are Greedy and Don’t Need All of Their Social Security As some tell it, most older Americans spend their days being pampered in posh retirement villas or country clubs. According to the stereotype, these misers have no concern for young people — they prefer to take advantage of Social Security benefits they don’t need. Talk about myths! Over half of older Americans depend on Social Security for at least 50 percent of their retirement income. The benefits keep more than one-third of older Americans out of poverty, often by a thin margin. Are benefits too generous? The average monthly payment for a retired worker is about $1,500 (as of 2020). That’s about $18,000 a year. Not only do many millions of people struggle with poverty and near poverty, but recent estimates paint a bleaker picture than had previously been thought. A U.S. Census Bureau alternative poverty measure in 2018 found a 13.6 percent poverty rate among Americans age 65 and up. Without income from Social Security, the poverty rate for older Americans would nearly triple — soaring to nearly 40 percent. Such figures make clear what common sense may tell you: A great many older people rely on Social Security to survive. The myth of greedy seniors is further contradicted by the interdependence of generations, which may be growing. An increasing number of older people are helping to support their adult children and grandchildren, and studies have shown a big rise in the number of interdependent, multigenerational families. A U.S. Census survey found that slightly more than 7 million children — nearly 10 percent of all kids — live in families that include a grandparent. Sometimes commentators try to argue that retirees and young people are at odds economically, as if older Americans are grabbing benefits they haven’t earned and don’t deserve. Think of the older people you know personally, people in your own family, and ask yourself: Does that ring true?

Article / Updated 03-22-2023

Copyright © 2020 AARP. Selecting the right time to begin Social Security benefits is a personal matter. Only you know what makes sense for your family. But you should keep in mind some key points when you make this critical choice: Make sure that you know when you qualify for full benefits, but remember, you have broad discretion about when to claim. Refer to the table. Full Retirement Age Based on Year of Birth Year of Birth* Full Retirement Age 1937 or earlier 65 years 1938 65 years and 2 months 1939 65 years and 4 months 1940 65 years and 6 months 1941 65 years and 8 months 1942 65 years and 10 months 1943–1954 66 years 1955 66 years and 2 months 1956 66 years and 4 months 1957 66 years and 6 months 1958 66 years and 8 months 1959 66 years and 10 months 1960 and later 67 years * If you were born on January 1, refer to the previous year. Full retirement age may be slightly different for survivor benefits. Know your benefit. By using the Social Security retirement calculators, you can quickly get an idea of the benefit you’d receive before, at, and after your full retirement age. Each year you wait to collect beyond your full retirement age will add 8 percent to your benefit. Each year you begin collecting before your full retirement age will reduce it between 5 percent and 7 percent. In other words, the earlier you retire, the less Social Security you get each month. For many people, that’s a powerful argument to hold off claiming benefits. Be realistic about your life expectancy. If you don’t like to think about how long you’ll live, get over it. Your life expectancy, and the possibility that you may exceed it, should be factors when you make plans for Social Security and retirement in general. Of course, no one knows how long you’ll live. But there’s plenty to consider: Do people in your family tend to live long? How would you grade your own lifestyle in terms of fitness, exercise, diet, and other personal habits that affect health? How healthy are you? Do you suffer from a chronic condition that is likely to shorten your life? Do you have a lot of stress? If so, do you have ways of managing that stress that make you feel better? Do you lug around a lot of anger and worry? If so, can you do anything about it? Think about all your sources of income and your expenses. Consider your savings, including pensions, 401(k)s, IRAs, and any other investments. Make realistic calculations about how much money you need. Look at several months of statements from your checking account and credit cards to review what you spend on and look for waste, while you’re at it. Ask yourself: Do you have the option to keep on working? Are you physically up to it? Think about your spouse. If you die first, it could determine how much your spouse gets for the rest of his or her life. Consider your spouse’s life expectancy and financial resources. Does he or she have a chance of living for many more years? If so, what are the household finances (beyond Social Security) to support a long life? Does the spouse have health issues that could cost a lot of money in the future? Husbands should bear in mind that wives typically outlast them by several years, because wives are typically a few years younger and because women have a longer life expectancy than men. Is that the case in your marriage? Talk it out if necessary. Couples should discuss this topic together, even though, in many marriages, one person may be the one who makes most of the financial decisions. You also may want to discuss your finances with a financial planner, especially if you’ve built up a nest egg and you have questions about how Social Security income will fit in. Be clear on the trade-offs. You can choose between a smaller amount sooner or a bigger amount later. It often makes sense to talk with a financial advisor, especially if you have investments to help support your lifestyle in retirement. Your decision about when to start retirement benefits will affect your family income for the rest of your life. Experts agree that it is often unwise to claim Social Security retirement benefits as soon as possible (age 62). But that is not always the case. Early claims may make sense for individuals who need the income for necessities and lack other financial resources to pay for them or who do not expect to live much longer. Social Security becomes more important the older you get You can’t make the stock market go up or control whether someone will give you a job. You can’t make your house jump in value if the whole neighborhood is sinking. You can’t go back in time and start an early nest egg if you spent like crazy when you were younger. You can’t make your employer keep a pension plan. And you can’t prevent the cost of living from rising. But you do have some influence over the size of your Social Security benefit, based on when you claim it. This matters for a little-recognized reason: The older you become, the more likely you are to depend on Social Security. The more years pass, the more you need Social Security’s protection against inflation, known as the cost-of-living adjustment. This provision is a big deal (even if the adjustment is small some years) because the effect of inflation over time can be drastic. At a rate of 3 percent inflation, the buying power of unprotected income plunges by half over a 20-year period. Even if you’re fortunate enough to get a private pension, it’s probably not shielded against inflation, and rising prices erode it over time. Other resources can boost your retirement security but are far from a sure thing. Earnings from even part-time work may go a long way. But work may become undesirable or physically difficult in later years. Older Americans have the highest rates of home ownership. But older people still may have mortgages and other debts to consider — their debt levels have actually risen over the years. Social Security benefits compare favorably with many other sources of income, because they’re protected partially from taxation. Most seniors don’t have to pay a penny on their benefits. Even the most affluent pay income taxes on 85 percent of their benefits, not 100 percent. A 2019 report by the Economic Policy Institute found that nearly half of working families have no savings at all. Findings like that help explain why so many people are afraid they’ll last longer than their money does. If their fears are borne out, Social Security will play a critical role in filling the vacuum.

Article / Updated 01-26-2023

Modern hearing aids are sleek, and many styles are nearly invisible. This is a far cry from early hearing aids that required body-worn accessories (to visualize that, imagine something like the old Discman CD player worn on your belt with wires attached to headphones). It’s also a far cry from the mental image many people have when they picture hearing aids as large and bulky pieces of plastic that stick out from behind the ear connected to huge earpieces sitting in your ear canal. Hearing aids come in several different shapes and sizes to customize the fit to the wearer. This article covers the broad-style categories but always remember that other variants exist and different manufacturers use different names. Generally, there are two main styles of hearing aids: behind-the-ear and in-the-ear. Each has some subtypes. A good hearing aid fit is important to prevent that buzzing sound that is known as feedback. This happens when the amplified sound coming out of the hearing aid speaker is picked up again by the hearing aid microphone and reamplified. Behind-the-ear hearing aids Behind-the-ear hearing aids, often known as BTEs, are the most common style of hearing aid. It sits behind the ear — hence, the name — while a tube runs to the front of the ear where it connects to either an earmold or dome in the wearer’s ear canal, as shown in the figure below. While earmolds are custom made to fit a wearer’s ear, domes are premade mushroom-shaped silicone pieces that come variety of sizes and designs to find the best fit for the wearer’s ear canal. BTEs have evolved into several subtypes, each with its own advantages and disadvantages. Earmolds require a custom impression of your ear canal. There are at-home, do-it-yourself earmold impression kits, but we recommend you use these with caution. Improper use can leave silicone material in the ear which requires a professional to remove. When in doubt, see a hearing care professional to make your earmold impressions. Traditional BTEs The traditional BTE (see the figure below) houses all the components of the hearing aid (the microphone, amplifier, processor, and speaker) in a single space that sits behind the ear. It is connected to a custom earmold using flexible, medical-grade plastic tubing. The BTE is a fairly rugged product that provides ample space for more powerful hardware, which can accommodate the needs of any degree of hearing loss. There are even “power” models for profound hearing loss. While the traditional BTE is the most versatile of hearing aid design, it has not always been perceived as the most discrete, so engineers have come up with newer versions of the BTE: slim tube and receiver-in-the-canal BTEs. Slim tube style BTEs Like the traditional BTE, the slim tube BTE (see the figure below) also houses all the components of the hearing aid behind the ear, but it uses much smaller tubing for a more discrete look. Rather than using a larger custom earmold that fills up the ear, slim tube BTEs use a dome or smaller custom earmold that sits deeper in the ear canal. The smaller size limits the slim tube style to mild to moderate hearing losses. In some cases, the slim tube style can work for severe hearing loss, but it is pushing the boundaries of this style’s capabilities. Receiver-in-the-canal style BTEs With a newer receiver-in-the-canal (RIC) BTE (see the figure below), the receiver or speaker sits in the dome or small earmold in the wearer’s ear canal and is connected to the body of the hearing aid behind the ear via a wire. This means that the signal output is being delivered right into the wearer’s ear rather than having to travel through tubing from the hearing aid body sitting behind the ear. This style may result in a clearer, crisper signal and can reduce feedback. Its design is smaller and more discrete. The major drawback to this style is that the receiver and wire are delicate and require regular maintenance and a gentle touch to avoid becoming damaged easily. Open and closed styles Slim tube and RIC styles often use domes rather than custom earmolds for the part that sits in the ear canal. These domes can be open or closed fit, which refers to whether the domes have holes in them (open fit) or not (closed fit). People with milder, high-frequency hearing losses can use open fit domes, which allow for more natural sound to enter the ear canal and allow for the ear canal to breathe. Conversely, closed fit domes are used for more moderate or severe hearing loss as they block outside sound and amplify low-frequency sounds. Open domes help prevent the occlusion effect — that is, when your ears feel plugged up and your voice sounds louder to you with an echo-like quality. You might also refer to this sound quality as “hollow” or “booming.” This happens because when we move our jaw to speak or chew, we create vibrations in the ear canal. When the ear canal is completely blocked with a hearing aid or earmold, those vibrations can’t escape and result in the occlusion effect. People who have better low-frequency hearing and use closed domes, earmolds, or ITE-style hearing aids are more likely to report experiencing the occlusion effect. Should you run into this issue, check with your hearing professional. Fun fact: You can simulate the occlusion effect by repeating words and sentences aloud with and without your fingers plugging up your ear canal (alright, maybe not that fun). In-the-ear hearing aids With in-the-ear hearing aids, also known as ITEs, the entire device sits in the wearer’s ear (see the figure below). These devices are custom made and require an earmold impression to be sent to a manufacturer. Popular smaller variants of the ITE are referred to as completely-in-the-canal (CIC; see the figure below). These styles are even smaller and, as the name implies, sit deeper in the ear canal. In fact, the CIC is essentially invisible and so small it requires an attached removal handle to get it in and out of the ear canal. The primary purpose of the CIC is cosmetic. A major drawback is that the small size comes at the expense of power. These small hearing aids are intended for mild hearing loss and cannot address the needs of more moderate or severe loss. The size of the CIC also limits the features available; CICs often can’t use advanced technology features like directionality. Some users who choose these styles become disappointed in their hearing aids and believe them to be ineffective when, in reality, these people have been fit with a hearing aid that is inappropriate for their level of hearing loss or hearing needs. ITEs are a great option when the user has problems inserting and manipulating behind-the-ear–style hearing aids due to numbness in their fingers or arthritis. The custom shape of the ITE makes it somewhat easier to slip into the ear. Pros and cons of hearing aid styles Picking the right hearing aid for you requires checking out the pros and cons of each style of hearing aid. Take a look at the table below to see which style may be the one for you. Hearing Aid Styles Pros and Cons Type Used For Pros Cons Traditional behind-the-ear All degrees of hearing loss from mild to profound Extremely versatile device with widest range of available features Relatively larger in size and most visible to the eye Slim tube behind-the-ear Mild to moderate hearing loss with some flexibility to fit severe hearing loss depending on the specific device Less visible than traditional BTE and can use open domes for more natural sound Requires enough dexterity to manipulate smaller size than traditional BTE and doesn’t meet the needs of most severe and profound hearing losses Receiver in the canal behind-the-ear Mild to moderate hearing loss Smallest BTE, clear sound from placement of speaker in the ear Most fragile BTE In-the-ear Mild to severe hearing loss Custom fit that is easiest to use when wearer has limited dexterity Smaller size may limit a few features Completely in-the-canal Mild hearing loss Nearly invisible Small size limits power and features like directionality

Article / Updated 09-27-2022

Assisted living is a term that is often used as though everyone understands it in the same way. But that’s not the case. Assisted living is just a generic term like hotel or automobile that covers a lot of options. Before getting into the specifics, here's a simple definition: Assisted living is a residence where groups of people share meals and other activities and where individuals can receive personal assistance to maintain their independence. People who choose assisted living typically would have difficulty living completely on their own but do not require constant medical attention. You can also think about assisted living as an intermediate step in long-term care. It’s in the middle of the spectrum of long-term care, which often goes from independent living to assisted living to nursing-home care. Independent living can be in your own home or the entry level of assisted living or in special housing for older people. About 70 percent of residents in assisted living come to the facility from their own house or apartment. In this section I cover a more formal definition of assisted living, what services are included, which health care options may be provided, and tips for finding a facility to provide a broader understanding of all that assisted living covers. Interpreting industry and government language Most definitions of assisted living come from industry or government sources and emphasize different aspects of this setting. It’s important to keep the source in mind when you gather information. For example, Argentum (formerly the Assisted Living Federation of America), a trade organization, says, “Assisted living is a housing and health care option that combines independence and personal care in a residential setting.” This is a good definition as far as it goes, but it doesn’t tell you what personal care means and what health care services are likely to be offered. The Eldercare Locator, a free service connected with the federal Administration for Community Living (ACL), has an even more specific definition: “Assisted-living facilities offer a housing alternative for older adults who may need help with dressing, bathing, eating, and toileting but do not require the intensive medical and nursing care provided in nursing homes.” This definition, while accurate, doesn’t include younger adults who may want or need the kinds of services available in assisted living. It also underestimates the importance of the social aspects of assisted living. Living with a congenial group of people with whom to share meals, activities, and conversation is a potential benefit, since social connections have been shown to improve health and well-being as well as to reduce medical costs. Keep in mind, though, that it is sometimes hard to make new friends in assisted living because residences experience a lot of turnover. Most people stay in assisted living for only 22 months, according to the 2010 National Survey of Residential Care Facilities. Nearly 60 percent move on to a nursing facility, a third die, and the rest move home or to another location. Note: The 2010 survey has not been updated and has been replaced by a survey with a different name — the National Survey of Long-Term Care Providers. The Centers for Disease Control and Prevention (CDC) website has several recent reports on aspects of assisted living. State governments, which license group residences, call assisted-living facilities by different names. Some examples of state licensing categories are residential care facilities for the elderly (California), residential facilities for groups (Nevada), and personal care homes and assisted-living facilities (Pennsylvania). You may also come across the acronym ALF in your search. It is shorthand for assisted-living facility, not the character in the TV series popular in the 1980s. Similarly, ALP is an abbreviation for assisted-living program, not a mountain. Owners of assisted-living facilities tend to shy away from that term in the name, preferring more appealing names like village, community, manor, or any phrase that evokes a secure and invigorating lifestyle. Your state’s name for assisted living is not as important as its licensing requirements and its monitoring activities. Some states have detailed standards about what counts as assisted living and what must be provided, as well as building and safety regulations. States may require training for staff, background criminal checks, and other safeguards. Regulations in other states are less definitive. The National Center for Assisted Living, a provider organization, has information about state offices and a state regulatory review. Another important publication is the National Center for Assisted Living’s “Guiding Principles for Assisted Living.” This guide offers a good check on the kinds of information that providers should be giving you as a prospective resident, including contracts, finances, and resident transfers. When you check out your state’s regulations, find out whether it has a bill of rights for assisted-living residents. Most states have such a document and generally require facilities to post it and give copies to residents. These documents may be lengthy. Some of the items include the right to privacy, to confidentiality of personal and medical information, to have private communications with a physician or attorney, to practice the religion of one’s choice, and to be given notice about transfers or fee increases. Some are negative rights, such as the right not to be coerced or required to perform work. However, not all the documents tell residents how to complain if they feel their rights have been violated. One way is to contact the state’s long-term care ombudsman, who is responsible for investigating complaints in nursing homes and assisted-care facilities. You can find the ombudsman in your area. Or you can contact the National Consumer Voice for Quality Long-Term Care. What assisted living offers All assisted-living facilities, however defined, offer three main components: Shelter: Residents are given a place to live, usually a private unit or apartment. Meals: Food is provided, although not necessarily three meals a day. Staff: The facility staff provide the assistance that comes with the name. In addition to managers and activity directors, most facilities have aides or attendants to help with bathing, dressing, getting around with a cane or walker, and other daily tasks. When it comes to services provided by staff, you may frequently hear the term ADLs. It stands for activities of daily living, which are the actions people take for granted until they can’t do them by themselves anymore — dressing, bathing, going to the bathroom, and feeding themselves. ADLs have a companion term — IADLs, or instrumental activities of daily living — that includes tasks like making phone calls, managing money, managing medications, shopping, and cooking. People in assisted living may also need help with these responsibilities. Assisted-living facilities may be located in cities and look like ordinary apartment buildings. Some are in suburban locations with lots of open space. There are fewer assisted-living sites in rural areas. Some assisted-living facilities are luxurious and provide a wide range of services and amenities. At the other end of the spectrum, some facilities have small staffs and offer limited assistance. When you’re considering an assisted-living facility, be sure to ask about staffing: how many, training, special skills, and background checks. If the management seems evasive, probe further. The response will give you an idea of whether this is a place you want to consider further or avoid. Assisted-living facilities may be large or small. About a third of all facilities are considered large (25 or more beds), but they have more than 80 percent of all assisted-living residents. About 82 percent of all facilities are run by for-profit organizations, some of which are national or regional chains. The rest are run by charitable or religious organizations or by state, city, or local governments. In general, larger facilities have more staff and can offer more activities. This benefit may be offset by frequent staff changes and a more impersonal management style. Your preferences about small-group living versus a large residence should be part of your decision. If you or your parent have always lived in a private house with few close neighbors, it may be difficult to adjust to large-group living, even if you have your own apartment. Or a new environment may be just what you are looking for. A CDC analysis comparing smaller and larger assisted-living facilities found that in 2016, in larger facilities, more residents were age 85 and older, and a higher percentage of people needed personal care assistance. Residents in smaller facilities were also more likely to be receiving Medicaid. The percentage of residents who had fallen in the previous 90 days increased with the bed size of the facilities. Check out health care services The health care services offered in assisted living vary considerably. Most common is assistance with administering medications. Some states require staff with specialized training to help with this task. Some assisted-living facilities have medical staff, usually a nurse, available 24/7 on-site; others have a part-time nurse or someone on call. Compared to practice 20 years ago, assisted-living facilities are now accepting people with more serious chronic conditions. The National Center for Health Statistics, a government agency, reported in 2010 that 82 percent of assisted-living facility residents had Alzheimer’s disease or dementia, high blood pressure, heart disease, or a combination of those conditions. Some assisted-living facilities have adapted to the greater health care and assistance needs of these residents, while others have not. The 2016 CDC survey described in the previous section found that among residents of smaller facilities (4–25 beds), the prevalence of Alzheimer’s disease and depression was higher, but the prevalence of cardiovascular disease was lower. If you have a chronic condition that requires frequent monitoring and checkups, be sure to ask whether you can continue to see your own doctor or what alternatives will be available, especially if you’re moving to a new area. Alzheimer’s disease and other types of dementia are conditions that require specific care and are a huge factor when making a long-term plan. A 2012 MetLife Mature Market Institute survey of long-term care costs found that about half of assisted-living facilities provided Alzheimer’s and dementia care, but 61 percent of them charged an additional fee. Sometimes the special units or programs within a facility are called memory care, perhaps to avoid the stigma of dementia. If memory care is important in your plan, be sure to ask about the staff qualifications and training, types of programs available, and opportunities for interaction with other residents. Also ask whether behavioral interventions are used instead of psychoactive drugs, which should generally be avoided. And care for people with dementia should be more than keeping them from wandering; it should include activities designed to stimulate their minds and keep them active. More information on assisted-living facilities Your goal is finding the right assisted-living situation, one that offers the right balance of independence and privacy with the kinds of assistance you need now and may need later. After you know more about assisted living, you can begin your fact-finding process. You can get information about specific assisted-living facilities from many sources. A lot of marketing information stresses the living aspect of assisted living and glosses over the assisted part. It’s hard to find out how friendly the staff is, whether management is responsive to concerns, and all the other quality-of-life questions that matter so much. You have to ask about and observe these aspects for yourself. But you can learn a lot from some basic resources, including the following: Eldercare Locator: This federal resource is a good place to start. It directs you to your nearest Agency on Aging for assistance. There is also a basic introduction to assisted living. State websites: State websites are important because you can generally find which assisted-living facilities have a lot of health and safety violations or don’t offer what you’re looking for. You can then eliminate these from consideration. Some states also have good consumer information, specific to that state, on their Office of Aging or Health and Human Services websites. Note, though, that these agencies have different names in different states. Your state’s long-term care ombudsman: This individual investigates complaints about assisted-living facilities and nursing homes. Check with that office, usually located in the State’s Office on Aging, to find any complaints about a specific facility and how they’ve been addressed. The Commission on Accreditation of Rehabilitation Facilities: This nonprofit organization lists continuing-care retirement communities that meet its survey standards about business practices, philosophy and physical environment, and some aspects of assisted living. Argentum (formerly the Assisted Living Federation of America): A membership organization of assisted-living providers, you can search for its state partners on its website. Internet sites: When you search on the Internet for “assisted living,” you can find ads for specific facilities as well as companies that offer to help you find a facility in your area. Sometimes these companies are endorsed by celebrities, which isn’t a guarantee of quality. Personal assistance from “care” or “family” advisers may be available. Facilities on these lists typically pay to be included, so not all options may be offered to you. Friends or relatives: People you know who are currently in or have lived in assisted-living facilities are a good resource for information on local facilities. Keep in mind, though, that one person’s good or bad experience may not convey the whole picture. Doctors and other health care professionals: Talk to doctors and nurses with experience in providing care to assisted-living facility residents. Use more than one resource, because no single one is likely to have all the options. Be aware of the criteria for including the assisted-living facilities and the sponsorship of the list. And none of these resources can tell you what it’s really like to live there. You should address questions about quality of life in your visits to various facilities. I suggest some specific questions in the later section “Beyond the Brochure: What to Look For When You Visit.”

Article / Updated 11-05-2021

Copyright © 2020 AARP Social Security faces a shortfall. To pay benefits, Social Security will increasingly rely on its trust funds because revenues from the payroll tax aren’t sufficient. After about 2035, when the trust funds are exhausted, the program is projected to have enough income to cover about 80 percent of promised benefits. That means the country faces choices about how to close the gap. Social Security issues aren’t limited to its solvency, however. Changes in lifestyle since the 1930s have prompted other ideas to make the program more fair and helpful in the 21st century. This article outlines ten major policy options the nation may consider for the future of Social Security. The menu of changes is potentially larger. But these are among the most prominent approaches that have been debated for years by experts of varying political views. Millions of people will be affected by how these issues play out. Whether to Increase the Earnings Base You make payroll tax contributions to Social Security on earnings up to a limit ($137,700 in 2020). This cap is known variously as the wage base, contribution and benefit base, and taxable earnings base. It has historically served as a limit on the payroll taxes that you and your employer each pay to the program. Most workers (more than nine out of ten) earn less than the cap. But in recent decades, a small percentage of workers has been receiving a growing share of total U.S. earnings. If you think about all earnings as a pie, the slice that goes untaxed for Social Security has been getting bigger. Raising the earnings base is a way to make the pie look more like it used to and boost revenues for Social Security. For example, increasing the earnings base such that 90 percent of earnings would be subject to the payroll tax would reduce Social Security’s shortfall by 26 percent (if higher earners got somewhat higher benefits) or by 35 percent (if additional taxed earnings weren’t included in the benefit calculation), according to 2019 projections by the Social Security Administration (SSA). To bring in more or less money, the earnings base could be increased by a higher or lower amount. Eliminating the cap altogether is a way to greatly decrease the shortfall, but such a measure could weaken the link between contributions and benefits if the additional taxed earnings aren’t used in the benefit calculation. The argument against increasing the earnings base is that high earners already get less of a return on their contributions than lower-income workers get, because Social Security benefits are progressive by design. Also, raising the earnings base amounts to a big tax hike on high earners. But supporters say an increase goes a long way toward fixing the problem, and the burden on high earners wouldn’t be onerous. Whether to Cover More Workers You and the people you know probably are covered by Social Security. Most workers are. The largest group outside the system is about 25 percent of state and local government employees who rely on separate pension systems and don’t pay Social Security taxes. Bringing newly hired state and local government workers into Social Security would raise enough revenue to solve about 6 percent of the long-term shortfall. State and local governments may oppose such a measure since it could adversely affect the financial stability of their pension systems. The federal government would have to provide a large cash infusion to those pensions if Social Security siphoned off new public employees who aren’t now covered. Such a proposal, however, could bolster Social Security’s finances and simplify administration of benefits. That’s because the way the program is set up today, Social Security must adjust payments for former government workers who spent part of their working lives contributing to public pension plans but not to Social Security. In addition, newly covered public employees would benefit from disability and survivor insurance that is either weak or nonexistent in some state and local plans. Whether to Raise Taxes Raising Social Security payroll taxes is one way to address the financial shortfall head-on. Even small increases in tax rates go a long way toward shoring up the program’s finances over time. For most recent years, wage earners have paid a Social Security tax of 6.2 percent up to a certain threshold of income ($137,700 in 2020). Employers have paid the same rate as wage earners. The self-employed have paid 12.4 percent (both the employer and employee share). Raising the Social Security payroll tax from 6.2 percent to 6.5 percent would eliminate about 20 percent of the shortfall; raising it to 7.2 percent could close just more than half the gap. A higher increase would have a bigger impact, and a smaller increase would do less. Any increase could be phased in. This approach would eliminate much of the problem, and it polls well with the public. But it also raises questions. Critics voice concerns about the economic impact of higher payroll taxes and the possibility that employers may respond to a higher tax by cutting other payroll costs, such as jobs. Tax revenues for Social Security could be raised in other ways, such as by dedicating revenue from the estate tax or increasing income taxation of Social Security benefits. Neither, however, would generate enough revenue to make a significant dent in the problem. Another approach would be to tax contributions to all salary reduction plans (arrangements in which you’re able to divert some of your pretax income to certain areas, such as transit, flexible spending, dependent care, and health-care accounts). Extending the Social Security payroll tax to all such areas could reduce the shortfall by 9 percent (but such a move would hit consumers who use such accounts to help cover necessities). Whether to Cut Benefits Benefit cuts are nothing to cheer about, but they would save money. Further, they could be structured in a way that doesn’t hurt current retirees, soon-to-be retirees, and low-income individuals. Any changes could be phased in after a long lead time, giving younger workers years to adjust their plans for the future. The formula that calculates benefits could be altered in a manner that protects individuals who depend most heavily on benefits, while landing hardest on those who can afford the change. But of course, the fine print would determine the impact. And the more people who are protected, the less savings are achieved. Note: Policymakers usually include some combination of benefit cuts and tax hikes when they devise plans to strengthen Social Security. Still, a targeted reduction in benefits could undermine the broad public support for Social Security as a program in which everyone pays in and everyone gets benefits. The more cuts fall on the middle class, the more they erode retirement security for people already facing a squeeze. The more cuts fall on high earners, the less support high earners may have for Social Security. Whether to Modify the Inflation Formula Social Security benefits are adjusted to keep up with the cost of living. This protection is extremely valuable to beneficiaries and becomes even more so the longer you live. Without the annual cost-of-living adjustment (COLA), the purchasing power of your benefits shrinks over time. Private pensions usually lack this protection. The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) is used as the guide in adjusting Social Security benefits to rising prices. One proposal to save money would be to use a different measure known as the chained CPI. The chained CPI builds in the idea that consumers switch their purchases if the price of a particular good goes up too much. The notion is that if the price of ice cream soars, you may switch from eating Fudge Ripple to munching on cookies. If filet mignon is getting too pricey, maybe you’ll reach for pork chops. The chained CPI rises about 0.3 percentage points less each year than the CPI-W. That means a chained CPI would save the Social Security program a lot of money — reducing the shortfall by about 20 percent because of slower-growing benefits. Unlike most savings proposals, an index that brings smaller inflation increases would affect current beneficiaries, albeit gradually, as well as future ones. Those receiving benefits for many years would eventually be hit the hardest. For example, you would see your benefit reduced by a bit less than 1.5 percent after 5 years, 3 percent after 10 years, and 6 percent after 20 years under a COLA based on the chained CPI. Opponents say a chained CPI may not reflect the reality of older consumers. They spend a lot more on health care than young people do, and health care costs are rising fast. Older consumers also may rely on various services that may be hard to substitute for. These reductions would mean a larger benefit cut over time. As a result, some proponents would cushion such reductions with a special boost in benefits for the oldest beneficiaries. Whether to Raise the Full Retirement Age The age you can get full Social Security benefits is gradually rising. One proposal to save money is to raise the full retirement age even further. This proposal saves a lot of money for the system while providing an incentive for people to keep working. Pushing the full retirement age to 68 could reduce the shortfall by about 17 percent. Raising it higher, as some suggest, would save even more. Such increases can be implemented very gradually to protect older workers. Proponents say this approach makes sense in an era of increased longevity. A 65-year-old man, for example, is expected to live on average to 84 — and many will live longer than that. This issue, however, is more nuanced than some people realize. It’s true that when Social Security was created, a newborn male wasn’t expected to reach 65. But for those who survived to adulthood, many lived into their late 70s and beyond — fewer than today, to be sure, but the gap isn’t as wide as some imagine. Nor has everyone benefited equally from increases in longevity. Many lower-income, less-educated workers haven’t enjoyed the same gains in life expectancy as their more affluent, more-educated counterparts, and by some gauges have suffered actual declines. Also, a later age for full retirement benefits could prove onerous for older workers with health problems or in physically demanding jobs. A related proposal would index Social Security benefits to increases in life expectancy (such as by linking the full retirement age to advances in longevity). This would put the Social Security program on sounder footing by providing lower monthly benefits to compensate for the fact that people are generally living longer. How to Treat Women More Fairly Social Security was designed with a 1930s-era vision of the family with a male breadwinner and a stay-at-home mom. Of course, many households no longer fit that model. The result is that some of Social Security’s benefit rules raise issues of fairness — issues that often affect women. For example, Social Security provides a nonworking spouse a benefit of up to 50 percent of the breadwinner’s benefit. Yet a working, nonmarried woman potentially gets a smaller benefit (depending on her earnings history) because she can’t rely on a higher-earning spouse for benefits. Benefits that go to single women, such as working moms, also may be reduced because of time spent outside the paid workforce, such as to raise a young child or take care of an ailing parent. One way to make Social Security fairer for working women would be to provide earnings credits for at least some of the time spent caregiving and raising children. For example, a worker might be awarded a year’s worth of Social Security credits for a year’s worth of such work, up to a certain limit. (Such a measure would be gender neutral and would also help some men, but it would primarily affect women.) The argument in favor of such a reform is that it would make Social Security more responsive to modern realities and support women who may have low benefits. It could be expensive, however. For example, providing annual earnings credits for five years of child-rearing could increase the long-term funding gap by 8 percent. Plus, offering credits for caregiving may be hard to administer. The cost of such credits could be adjusted up or down, based on their size and the number allowed. Another proposal would credit each spouse in a two-earner couple with 50 percent of their combined earnings during their marriage. This approach, known as earnings sharing, attempts to equalize the treatment of two-earner couples with those of more traditional, single-earner couples. (Under a growing number of circumstances, a working wife gets no more Social Security than if she had never worked outside the home.) Earnings sharing, however, could create new problems. Benefits for many widows could be reduced, unless such a proposal were designed to prevent that, adding to its cost. Whether to Divert People’s Taxes to Private Accounts Free-market advocates have long pushed to make Social Security more of a private program, in which some of your payroll taxes go into a personal account that would rise and fall with financial markets. Supporters believe that your returns in the stock market would make up for cuts in your benefits. You would own the assets in your personal account and could pass them on to your heirs. Historically, the stock market has produced solid, positive returns when measured over long periods of time. Personal accounts could be introduced gradually, so that they would become a choice for younger workers while retirees and near-retirees wouldn’t be affected. The argument against this strategy is that it would erode the basic strength of Social Security, which is a guaranteed benefit you can count on, and replace it with the uncertainties of Wall Street and other investments. Social Security was created as social insurance that protects workers and their families when they no longer can work because of death, disability, or retirement. Private accounts have no such mission, and workers couldn’t rely on the same protections for themselves or their dependents. Whether to Create a Minimum Benefit Social Security no longer has a real minimum benefit. Even with Social Security’s progressive benefit formula, low wage earners may end up with benefits insufficient to cover basic living costs. A higher minimum benefit can be achieved through various means. For example, a minimum benefit may be set at 125 percent of the poverty line (or some other percentage), targeting workers who have worked fewer than the 35 years that go into benefit calculations. In theory, the Social Security Administration could set a higher floor for benefits or include credits for unpaid work, such as for caregiving (see the earlier section “How to Treat Women More Fairly”). Also, a minimum benefit could be indexed to wage increases, keeping the minimum benefit adequate over time. The problem is that a minimum benefit would cost money at a time when Social Security needs more of it. Further, it would weaken the relationship between contributions and benefits that has been so important to the program’s success. The total cost of a minimum benefit depends on the particulars, but by some estimates it could increase the shortfall by 2 percent to 13 percent. Whether to Give a Bonus for Longevity The oldest Americans are often the poorest. They may have little savings. Usually, they no longer work, they face significant health challenges, and if they have pensions, such income is usually eroded by inflation. Hiking their benefits through a longevity bonus is one idea for how to help them. For example, a 5 percent benefit increase could be targeted to individuals above a certain age, such as 85. Like other proposals, the longevity bonus could be phased in and fine-tuned. It would directly help a segment of older Americans who have the greatest need for adequate benefits and have little or no way to strengthen their finances. This proposal isn’t about saving money. For example, if a longevity bonus were offered 20 years after eligibility (which is age 62 for most people), it could increase the long-term Social Security shortfall by 9 percent. That’s the argument against the bonus or to limit its size.

Article / Updated 11-05-2021

Copyright © 2020 AARP. A growing number of Americans owe income tax on part of their Social Security benefits. You typically won’t owe income taxes on your benefits if they represent all of your income. But significant income from work, investments or a pension — on top of Social Security — could be an income-tax liability. In addition to the feds, some states — predominately in the Midwest — tax Social Security benefits. (The states have a hodgepodge of tax rules and exclusions for Social Security, so check with your own state tax agency or accountant to figure out whether that applies to you.) The state tax agencies go by different names, but you can find contact information for yours at the Federation of Tax Administrators. Whatever your income, however, at least 15 percent of your Social Security benefit is protected from the tax collector. No one pays income tax on more than 85 percent of his or her benefits. Importantly, single filers are treated differently than married couples filing a joint return. You can go through a few steps to get a rough idea of how taxation of benefits may affect you: 1. Get a rough idea of your provisional income, or what Social Security calls your combined income. Your provisional income is the sum of wages, interest (taxable and nontaxable), dividends, pensions, self-employment income, other taxable income, and half of your Social Security benefits, less certain deductions you may take when determining your adjusted gross income. 2. See where your provisional income level fits into the tax rules. Say you file as an individual, and your combined income is under $25,000. If so, you owe no taxes on your Social Security. If your provisional income level is between $25,000 and $34,000, you may have to pay income tax on up to 50 percent of your benefits. If your combined income is above $34,000, you may have to pay income tax on as much as 85 percent of your Social Security benefit. For married couples, the levels are different. If a couple has provisional income of less than $32,000, you’re in the clear. If provisional income comes in between $32,000 and $44,000 on your joint return, you may owe income tax on up to 50 percent of your Social Security benefits. Couples who earn more than $44,000 may have to pay taxes on as much as 85 percent of their benefits. Married people who file separate tax returns and receive Social Security typically have to pay some tax on their benefits. This is because for people in this category, the limits are zero, meaning that up to 85 percent of Social Security benefits may be subject to the income tax. 3. Determine exactly how much of your benefit may be taxed. This can get complicated, depending on your personal situation, especially if you have to include 85 percent of your benefits as part of income for tax purposes. To do it right, you need to fill out a step-by-step worksheet, or rely on tax software or your accountant. You can find a worksheet at the IRS website. Every January, you should receive a Form SSA-1099 that tells you your total Social Security benefits for the prior year. You need this information for your federal tax return. Here’s an example: Tom and Carol are a married couple who file jointly. Tom’s Social Security benefit comes to $7,500, and Carol’s spousal benefit adds another $3,500. Tom also gets a taxable pension of $22,000 from his former job with an automaker and interest income of $500 from some certificates of deposit. Tom and Carol figure out their provisional income by adding $22,000 plus $500 plus $3,750 (half of Tom’s benefit) plus $1,750 (half of Carol’s benefit) for a total of $28,000. Tom and Carol pay no federal income tax on their Social Security benefits, because their provisional income of $28,000 comes in below the $32,000 threshold for a married couple filing jointly. But suppose they had more income. What if Tom’s pension came to $30,000? That extra $8,000 would boost the couple’s provisional income to $36,000 — well above the $32,000 threshold for married couples. In this case, Tom and Carol would owe income tax on about 18 percent of their Social Security benefits. As of this writing, U.S. citizens who live in certain countries, including Canada, Chile, Germany, Greece, Ireland, Italy, Japan, Switzerland, and the United Kingdom, don’t have to pay income tax on Social Security or are subject to low rates, no matter how big their income. This is because of tax treaties between the United States and those nations. (The list may change over time.) Paying your taxes ahead of time You may be required to send quarterly estimated payments to the IRS if you have tax liability that isn’t handled through withholding from an employer. Separately, you may request to have federal taxes withheld from your Social Security payments. You can get the IRS Form W-4V to request voluntary withholding or call the IRS at 800-829-3676 (TTY 800-829-4059). There’s also a link to the form through the Social Security Administration (SSA). If you choose to withhold federal income taxes, you can select only among certain percentages: 7 percent, 10 percent, 12 percent, or 22 percent of your monthly benefit. You should return the signed form to your local SSA office.

Article / Updated 03-10-2021

Copyright © 2020 AARP. All rights reserved. If you have years until retirement, you have a vital stake in the future of Social Security, and this article explores many of the reasons why. For starters, proposals to modify benefits — such as by raising the retirement age or reducing benefit levels — usually are designed with younger workers in mind. (Policymakers have traditionally felt that changing the rules for current retirees or workers who will soon join their ranks is unfair and that young people have time to plan.) Whatever you may think of the nation’s budget issues and how best to address them, it’s worth knowing that future beneficiaries would feel the brunt of proposals aimed at curbing Social Security benefits. If you’re a young person, that future beneficiary is you. But younger Americans have a stake in Social Security that goes beyond even the benefits they’ll get one day. Benefits that go to older family members — and others in the community — help all of us by fostering independence and reducing poverty. If such support were to be decreased, we would pay the price in other ways. If You’re Lucky, You’ll Be Old Someday What kind of world awaits you in old age? Who can say? But if you believe in planning, you can’t ignore sweeping trends that have eroded retirement benefits and retirement security for hardworking Americans. Private pensions have become much less common. Wages have grown little. Financial markets are volatile. Health care gets more expensive all the time. Meanwhile, gains in longevity mean you may be old for decades. The odds of reaching 100 are better than ever. Maybe envisioning old age is difficult if you’re still young. But no matter how old you are, you can probably agree with the following: You want to be secure in your later years. You want to be as independent as you can. You don’t want to worry about the necessities. You don’t want to lean on others to help pay your bills. That gives you a stake in preserving a strong Social Security program. Social Security benefits don’t just go to someone else. Someday, they’ll go to you. Your Parents Will Be Old Even Sooner Even if Social Security still seems like some far-off concern to you personally, it may already be helping support your parents. As a loving child, presumably you want your parents to have independence and dignity after a lifetime of hard work. For most middle-class families, Social Security makes that possible. Yet that’s not the whole story. By helping your parents stay independent, Social Security may offer you an advantage you don’t much think about. There’s no delicate way to put this: Do you want your folks to move in with you? Of course, some adult children would be happy for that. Intergenerational families are a growing phenomenon, particularly during tough economic times. It’s safe to say, though, that ideally such households should be created through voluntary choice, not as a last resort in desperate circumstances. Besides, even if you’re game for mom and dad moving in, who’s to say they want that? Older Americans typically prefer to have their own space, as long as they can afford it and have the physical ability to manage on their own. That’s the arrangement most adults — parents and grown kids — want. Social Security plays a critical role in preserving your parents’ independence — and yours as well. You’re Paying into the System Now One easy-to-grasp reason young workers have a stake in Social Security is that they’re helping to pay for it. Social Security payroll tax contributions come straight out of your paycheck and add up to many thousands of dollars over the years. Many people, particularly those of moderate income, pay more money in Social Security taxes than they do in income taxes. The basic Social Security tax rate is 6.2 percent of earnings up to a certain limit ($137,700 in 2020), each paid by the employee and the employer, for a total of 12.4 percent. The payroll tax means that young workers pay a lot of money into the system in the course of their lifetimes. In return, they earn Social Security benefits for themselves and their dependents — benefits they may need long before retirement if misfortune strikes. Young workers have a personal financial stake — perhaps larger than they recognize — in keeping Social Security strong for the day they receive benefits. You Benefit When Social Security Keeps People Out of Poverty Social Security keeps more people out of poverty than food stamps, earned income tax credits for the poor, and unemployment insurance combined. As a result, all of society benefits. Before Social Security, needy older Americans could end up in the county poorhouse, where they lived out their final days in misery. Social Security has become the nation’s most successful anti-poverty program, keeping about 22 million older Americans out of poverty, and perhaps significantly more, according to some measures. That includes more than 1 million children and more than one-third of older Americans. Helping people stay self-sufficient isn’t just humane. It also solves problems that would have to be dealt with one way or another and at potentially significant costs to the public. If Social Security were to play a smaller role in easing hardship, demand would soar for other services provided by the federal government and the states, creating pressure to raise taxes. If you’re a middle-class worker, Social Security’s role in combating poverty may not be the first thing you think about when it comes to the program. But you benefit as a result. You May Need Benefits Sooner Than You Think Even when you’re young, you may be covered by Social Security for important benefits. These protections may apply not only to you but also to your immediate family. It’s natural to think of Social Security as a retirement program. But millions of people benefit from protections that were created with the young in mind. For example, Social Security may provide survivor benefits to young families if a breadwinner dies. These benefits may last until the worker’s child reaches the age of 18. A widow or widower who is caring for the child may get benefits until the child reaches age 16. Similarly, you can build up disability benefits that you also may need at a young age. Such benefits also may go to dependent family members. The Social Security Administration (SSA) recognizes that cases of death and disability can create extreme need when you and your family are still young. As a result, the eligibility requirements are designed with that in mind. You can become eligible for certain benefits after a relatively brief period of covered work, compared to the rules for retirement. If you’re still in your 20s, you can build up some eligibility for survivor and disability protections with as little as six credits — typically, 18 months of work. (Requirements vary based on age and tenure in covered work, but the idea is to give some protection to workers before they’re old.) By contrast, you have to work about ten years to build up the earnings credits required for retirement benefits. Bottom line: Social Security is set up to protect people of all ages. Social Security Ensures That Time Doesn’t Eat Away at Your Benefit I bet you’ve heard your parents or grandparents reminisce about the “good old days” when bread cost a quarter and candy cost a penny. Maybe they even told you how proud they were to get that first job that paid a grand total of $10,000 a year. (I sure was.) Just as the prices and wages our parents experienced 20, 30, or 40 years ago seem quaint today, without certain adjustments that are built into the Social Security program, our benefits would seem like a pittance to us 20, 30, or 40 years in the future. Social Security shields benefits from economic erosion in two primary ways: The benefit formula makes sure that payments increase from one generation to the next with growth in average wages. It achieves this goal through indexing and other adjustments that can add hundreds of dollars a month to future benefit amounts. Social Security is designed to keep up with rising prices (a feature that isn’t part of most pension plans). This protection can make an enormous difference in your future standard of living, because inflation eats away at the dollar as the years pass. For example, if you’re 35 years old, a 3 percent rate of inflation would mean that a dollar you have today will be worth only about 40 cents when you’re 65. To shield your benefit from inflation, Social Security applies a cost-of-living adjustment (COLA) to benefits, so that a dollar in benefits today will still be worth a dollar 10, 15, or 35 years from now. Social Security benefits are supposed to be meaningful, not quaint relics of the past. The built-in wage and inflation protections mean that the benefits you earn while you’re younger will retain real purchasing power when you need them. Social Security Benefits Are One Thing You Can Hang Your Hat On Retiring with financial security is increasingly difficult. You probably don’t have a pension. If you own a home, it may have dropped in value, possibly below what you paid for it. Health care costs continue to rise, as do other necessities of life, including energy costs and food. Meanwhile, the gift of longevity means that old age can last a very long time. How will you pay for all those years? Hopefully, you have various resources to draw on, and you keep your living expenses in line with income. Hopefully, these resources can endure, rewarding you for years of hard work and thinking ahead. But for many older people, it’s a struggle. Account balances decline. Income fails to keep up with inflation. And you can’t control these things. Social Security’s guaranteed income stands out as the one thing you can count on — a reliable monthly foundation of income that will last the rest of your life. And Social Security’s inflation protection helps preserve its value no matter how long you live. Unfortunately, the trends undermining retirement security are well established, and there’s little reason to believe that they’ll vanish anytime soon. Young workers need something they can count on to help them achieve financial security when they’re old. Social Security remains the bedrock. The System Works Social Security isn’t perfect. But by and large, it makes the right benefit determinations. Its administrative costs are low. Payments go out on time. You know what you’ve got coming, and you get it. This predictability is part of the value of Social Security. I’m not saying that young people today know precisely what they’ll get in the future or that Social Security will never be modified. But the enduring outlines of Social Security are apparent: It’s an efficient system of guaranteed benefits that can last a lifetime, with some inflation protection. It’s designed to replace more income for modest earners, but some income for all who pay in. It will remain a foundation for retirement security that people can count on every month for as long as they live. Social Security isn’t based on theories of human behavior, such as the idea that you’ll save more or that you’ll save wisely, or expectations of how Wall Street will perform in the future. It isn’t an experiment. Social Security works. The Alternatives Are Worse You can bolster your retirement security in many ways. It was never Social Security’s intended role to do the job alone. Saving over a lifetime can make a tremendous difference. Postponing retirement and extending your work life is a powerful way to nurture your nest egg for the long haul. Investing with care (and patience) can help savings grow significantly over time. If you have many thousands of dollars, you may consider buying an annuity to guarantee more monthly income when you’re older. None of these strategies, however, can match the broad, guaranteed protections of Social Security. For most people, savings rates are too low to protect them in a protracted old age. About a third of workplaces offer no retirement savings programs at all. When programs such as 401(k) plans are available, many workers fail to take full advantage of them, despite tax incentives and payroll deductions to encourage enrollment. Financial investments — important as they may be — come with risk. When markets collapse, they pull down retirement assets with them. If that’s your fate, it can take years to recover. Working longer can be enormously helpful in boosting economic security later in life. But research has shown that many older people retire sooner than they had planned on. Various reasons account for this, including layoffs in a tough labor market, personal health problems that make it difficult to keep up the daily grind, and the need to serve as a caregiver for an ailing spouse. An assortment of strategies can combine to strengthen economic security in retirement. Hopefully, some of them are part of your own family plan. For most people, however, Social Security remains the linchpin of well-being in retirement. Life Is Risky When you’re young, the fact that life is risky may be hard to grasp, especially if you’ve been spared tragedy. But that’s one of the reasons Social Security was created — as a form of insurance to help ease some of the bad things that can happen in life. Out of all the young men entering the labor force, 35 percent will become disabled or die before reaching retirement age, according to an analysis by the SSA. Among young women, the figure is 30 percent. And the chances of becoming disabled are a lot higher than the chances of dying, for both men and women. Bottom line: Devastating events happen, perhaps more frequently than you realize, especially when you consider a period of many years. And when bad things happen, the tragedy may affect not only the victim, but the victim’s entire family, whose livelihood may also be put in jeopardy. The protections that Social Security offers for survivors and disabled breadwinners can be a lifeline for families of all ages. They help households stay afloat financially at a time of grave crisis, providing the foundation they need to rebuild their economic plans for the long haul. They’re an important reason that young people have a stake in a strong program of Social Security.