Financial Benefits For Seniors
While there are many financial benefits for seniors, these thirteen listed below may surprise you. Although many of these financial benefits are small in number individually, cumulatively they represent substantial savings.
Tax Breaks
Tax breaks, in fact, are some of the most substantial benefits for seniors. Your local tax assessor can give you more guidance regarding the specific tax breaks for which you are eligible. Potential tax breaks for seniors in every state include medical and dental expenses, retirement plan contributions, investment expenses, business expenses, charitable contributions and, of course, standard deductions.
● Medical & Dental Expenses: Though you’re limited to a cap of 7.5% of your total income if you’re over 65, and 10% if your are under this age, it’s prudent to deduct from your taxes the costs for expenses like nursing home care, prescription drugs, long-term care insurance premiums, and health insurance premiums.
● Retirement Plan Contributions: Retired and semi-retired persons can still take advantage of tax reductions for IRAs and other retirement plans. If you own your own business, you have a variety of options, such as solo 401(k) plans.
● Investment Expenses: If you made the smart move of investing when you were not retired, you undoubtedly understand the benefits of collecting capital gains and dividends during retirement. This is one of the best financial decisions you can make for retirement, so if you are semi-retired or if you have funds to invest, speak to a broker about how to best grow your existing funds.
● Business Expenses: Are you one of many seniors that own a business? If so, it’s important to make sure you are always deducting everything you can from your taxes. Often overlooked deductions include work vehicles, home offices, your cell phone bill (if more than half of it is used for business), web hosting, and the cost of reading materials.
● Charitable Contributions: Seniors often contribute to charities, but tax deductions give you the ability to either donate more or recoup some of what you gave. Cash donations can be written off by as much as 50% and property can be written off for its market value, while vehicles, boats and airplanes can be written off for their gross sales value.
Local Resources
Do you need educational, safety, health, social, or recreational programs? Councils on Aging, or Area Agencies on Aging, are perfect local organizations for assistance in this area.
● Vocational Schools: Vocational students need hands-on training, and as a result the costs of their services are extremely low and always supervised by expert instructors. For example, at your local technical high school you can find a manicure, massage, and wax treatment likely under $10 per service.
● Legal Services: Everyone needs legal help at some point in their lives, and often seniors don’t have the income to pay for assistance when handling noncriminal issues. Search directories to find free legal help in your area. The National Senior Citizens Law Center makes it its mission to help low-income seniors battle legal issues.
● Education & Entertainment: Discounts, free class audits, and free tuition, as well as some scholarships, are available via many state schools. Entertainment is perhaps the easiest thing on which to get a discount for seniors, including restaurants, movies, museums, and more. Senior pricing or senior days are common at most entertainment venues.
● Drugstores, Department Stores, & Banking: Walgreens offers discounts to those over 55 each month, Kohl’s offers 15% off every Wednesday for those over 62, and many banks provide checking and savings accounts to seniors with no fees.
Medical Expense Reductions
Medical expenses are a challenge for Americans of all age groups, but seniors particularly struggle. They have a greater need for these services as well as a propensity to rely on their fixed incomes.
● Health Care Reform Bill: This bill activates a plan to reduce, between now and the year 2020, Medicare drug costs. By 2020 the so-called “donut hole” in coverage is projected to have closed. In 2011 seniors received a 50% discount on name-brand drugs and 7% on generics, which increased to 75% in 2010, and will continue to increase until the need is eliminated. This discount arrives in the form of a rebate.
● Generic Drugs: Speaking of generic drugs, ask your doctor about how you can save money with this medicinal option. The FDA has the same requirements of generic drugs as brand-name drugs, so they must act in the same manner. All drugs eventually go generic after the patents held by pharmaceutical companies expire.
● Government-Backed Reductions: The government backs many programs that help people pay for their medical coverage. This includes Medicaid, Medicare Savings Programs, PACE, and Supplemental Security Income, which does pay out to seniors if their incomes meet the threshold requirements.
● Prescription Drug Assistance Programs (PAP): These programs help those who cannot afford medications, obtain the ones they need. Pharmaceutical companies provide patient assistance programs for this purpose, which you can learn about via your health clinic, pharmacist, or doctor. Organizations like The Partnership For Prescription Assistance coordinate assistance programs with patients in need. To learn which drugs qualify for PAPs and whether or not you are eligible, simply visit the website for Medicare (www.medicare.gov).
Conclusion
When you take advantage of tax breaks, local resources, and medical expense reductions, you help reduce your costs as a senior. If you are a caregiver for an aging parent, this aide not only benefits your budget, but your endurance as well. Best of all, applying for assistance, in most cases, is only a click away. If you do not have access to a computer, your local Area Agency on Aging is staffed with volunteers who can help. The opportunities to save are out there, so enjoy these years with a little more money in your pocket!
What other benefits have you gotten that we haven’t listed?
