As people get older, it gets tougher to pay the bills, maintain their health, and eat healthily. Thankfully, many elders can get assistance from government programs. Such a program includes Medicaid. By 2021, it will help 7.2 million Medicare beneficiaries and low-income seniors.
While waiting longer for bigger sums, retirees who have paid into Social Security can choose to start receiving monthly checks at age 62. This post will go over a few financial options that can assist you in paying for your aging in place expenses.
Tax Credits and Deductions for Senior Citizens
When filing taxes, there are multiple ways seniors can reduce their tax burden, including:
Earned Income Tax Credit (EITC)
One of the most potent anti-poverty strategies in the nation is frequently cited as the EITC. If the credit exceeds your tax liability, you will get a refund because it is refundable.
The eligibility for the EITC was temporarily increased in March of last year, making taxpayers 65 and older who earned income (under $57,414) and had investment income (under $10,000) during the 2021 tax year eligible to claim the credit on their tax return. For the 2021 tax year, those without dependents may deduct up to $1,502 or $543.
Credit for the Elderly or Disabled
The IRS makes this tax credit available to help people who qualify reduce their overall tax burden. Those who will be 65 or older at the end of 2021 or those who will be retired due to a permanent and total disability and have taxable disability income will both be eligible for the credit. Depending on your filing status, the credit can be between $3,750 and $7,500.
Depending on whether the filer has an adjusted gross income (AGI) or nontaxable Social Security, pension, annuity, or disability income equal to specific amounts, there are income requirements to qualify for the credit.
For instance, single filers are not permitted to have an AGI of $17,500 or higher or $5,000 in additional nontaxable income. For further information on assessing eligibility, refer to IRS Publication 524. To claim the credit, fill out Form 1040.
Standard Deduction for Seniors
When filing taxes, most taxpayers choose the standard deduction, which immediately lowers taxable income without requiring itemized deductions. The standard deduction is larger for seniors 65 or older after the tax year. For single taxpayers in 2021, the standard deduction for seniors is $14,250.
Instead of accepting the standard deduction, seniors with significant medical expenses may profit from itemizing their deductions on their tax returns. They can write off any medical and dental costs exceeding 7.5% of their AGI, including Medicare premiums and insurance premium payments.
Low Income Home Energy Assistance Program (LIHEAP)
The U.S. provides Federal funding for the Low Income Home Energy Assistance Program (LIHEAP). Health and Human Services Department. It assists low-income families with their energy bills at home, including their heating and cooling expenses (but not water or sewer bills).
SSI recipients may be automatically accepted into this program. For one-person households, the annual maximum income is $20,385 before taxes; the amount rises in proportion to the number of people you live with.
However, LIHEAP is meant to only pay for some of your energy expenses, and it most likely won’t. Since each state receives funding for the LIHEAP program, each has its requirements for qualifying.
The amount of help a household will be eligible for will depend on several factors, including its location, income, energy demands or prices, and the size of its family. Refer to this LIHEAP map to find your state’s website for more information on eligibility criteria and how to apply.
Nutrition Assistance Programs
Seniors can access multiple food assistance programs to help with food costs, including:
Supplemental Nutrition Assistance Program (SNAP)
Millions of Americans get SNAP payments, sometimes known as food stamps, to help them afford food. In the fiscal year 2021, approximately 42 million Americans will get SNAP benefits, according to the USDA. For the fiscal year 2022, a single household’s maximum monthly benefit is $250. Think about being 60 years of age or older or disabled.
If so, you may be eligible for specific SNAP deduction benefits, such as deducting medical costs that total more than $35 per month from your gross income, such as those for nursing care, prescription drugs, and health insurance, between October 1, 2021, and Sept. For single households, the gross monthly income on December 30, 2022, is $1,396.
To learn more about SNAP and your eligibility, you may visit their site. To apply for benefits, you may contact your local SNAP office. Check the SNAP State Directory for contact and application information of your state. Every state has its own application form. You may need to contact your local SNAP office to request one if your state’s form is unavailable online.
The Emergency Food Assistance Program (TEFAP)
TEFAP provides local organizations that directly serve the public, such as soup kitchens, and food banks, with wholesome meals from the USDA. Depending on local availability, the menu offers wholesome options, including fresh fruits and vegetables, meat, milk, and cheese.
Although the program is free, each state has its own criteria for eligibility, such as limiting household income. To know if you are eligible you may contact your state distributing agency to look for your state’s TEFAP eligibility requirements and for further assistance on the application process.
Seniors Farmer Market Nutrition Program
Seniors can receive locally farmed fruits, vegetables, honey, and herbs through this USDA-run program. Seniors with low household earnings who are at least 60 years old and whose incomes do not exceed 185% of the federal poverty level ($23,184 per year for families with one person) are eligible. The cuisine is frequently available at senior centers and residences.
The USDA website has links to further information about the SFMNP that you may check to learn more about your eligibility and how you may apply.
Meals on Wheels
This nationwide nonprofit organization provides seniors—typically those 60 and older—daily meals through regional programs. The cost of the meals varies depending on the individual and might range from free to full price. Each program has certain requirements for participation, such as a meal need assessment or a letter of recommendation from a physician or social worker. The organization also emphasizes preserving senior freedom and dignity through its daily checkups.
The Meals on Wheels Program has an online directory that you may use to find providers near you.
Healthcare Costs Assistance
There are Medicare programs that can help cover health care costs, including:
Extra Help Program
People can afford prescription medicines thanks to the Medicare Extra Help program. You earn up to $20,385 per year ($27,465 for married couples) and have up to $15,510 in assets, such as cash in a checking or savings account, stocks, or bonds ($30,950 for a married couple); you may be eligible. The Extra Help Program limits prescription drug expenditures of $3.95 for generic medications and $9.85 for name-brand medications covered by Medicare.
You may check the Medicare website to check if you are eligible for the program and to find other important information that you should know.
Medicare Savings Program
This state program assists people unable to pay their Medicare premiums independently. There are four distinct Medicare savings plans; each has a unique monthly income cap and a list of expenses it helps cover. Read more to learn how to apply for the Medicare Savings Program.
Employment and Income
Many programs assist seniors in acquiring new skills and locating employment that fits their lifestyles. Seniors can make money, make friends, pursue their passions, and give back to the community by working or volunteering. Programs like the following may be of use to you:
Senior citizens can receive employment assistance at any of the 2,500 American Job Centers nationwide. The services offered at each center may differ, but the majority offer employment skill assessments, senior training services, follow-up services for at least a year, job search aid, and access to job banks. You can learn computer skills here to broaden your skill set and find employment more quickly.
The Department of Labor’s initiative aids senior citizens in finding stable employment. The SCSEP offers training assignments where you can develop your computer programming and office management knowledge.
Through community service work with government and nonprofit groups, you receive on-the-job training. Participants put in around 20 hours each week while getting paid and learning new skills.
A job placement and training plan can be created with the help of lectures and seminars on employment. You must be 55 years old, unemployed, and have a certain income. To find older worker programs in your area, use the Older Worker Program Finder.
If you meet the requirements of this government program, which include being 65 or older and having income and assets that don’t exceed specific thresholds, you will get monthly benefits. In some circumstances, several states augment federal SSI payments. It is possible to get both SSI and Social Security benefits simultaneously.
Other Aid Programs
Here are several other programs that are unique and worth looking into.
To receive a lifetime permit to all U.S. national parks, you must be 62 years old. The pass costs $90 ($80 plus a $10 processing fee as of 2021) and isn’t free, but it’s a decent deal. Additionally, some park amenities are discounted by up to 50% with the pass.
This tax credit, available to low-income seniors 65 and older in 2021, ranged from $3,750 to $7,500. Seniors who qualify for it pay less federal tax, but only some are eligible to do so. To determine your eligibility, do a quick interview on the IRS website.
Look into this Department of Justice effort if you are experiencing abuse of any kind, whether physical, emotional, verbal, sexual, or other types. There are several ways to report abuse, and resources are close by. Additionally, the program enhances the results of investigations, prosecutions, and victim recovery.
Through this program, you can speak with counseling services about the advantages and disadvantages of a reverse mortgage. A reverse mortgage may be advantageous to you depending on experts’ examination of your living condition. You must be the only joint homeowner, and you must be at least 62 years old. In a reverse mortgage, a portion of the value of your house is turned into monthly payments. This search for counseling is a fantastic method to make sense of things because it becomes complicated.
Retirement ought to be a period of complete relaxation and comfortable living. However, 15% of Americans have no retirement savings, and 22% have savings for less than $5,000.
Additionally, one in four seniors have less than $500 in savings to pay for medical expenses, and aging always involves expenditures, regardless of where and how you choose to be cared for.
Fortunately, there are numerous programs and financial resources that can assist you as you get older, especially at a time when practically everyone is having difficulty. They can be a lifeline for older adults in need, even though they might not be sufficient to close the financial gap completely.