The Financial Realties of Retirement

Since Mr. Fixit retired six years ago, I have been dealing with the financial realities of retirement. We are almost completely dependent on Social Security. Mr. Fixit has had to work part-time in order to get medical insurance for me. He, of course, is covered by Medicare and a Medicare supplement. His insurance costs are high, but manageable. The problem is that I am eight years younger than he so I have to wait to get Medicare. He is spending his retirement working instead of enjoying a much-deserved rest. During his full-time employment years, he worked all the over-time he could get when he was an hourly worker. After he became a salaried employee, he worked the same long hours with very little remuneration. It was seldom that he worked less than 50 hours a week.

At the beginning of the year, his current employer changed medical insurance carriers. The new coverage is a few dollars more a month and covers very little of the costs of my expensive medications and frequent visits to the doctor. In fact it only covers $75.00 of the almost $500.00 expense that I incur every month. Also since Mr. Fixit’s heart problem, he is taking a very expensive medicine. His Medicare supplement will only cover his cost if we first run it through his group insurance. The limits on that insurance are very low. If something happened that I had to go to the hospital, the limit would be met within two hours in the emergency room. Did I mention that the cost of his Medicare supplement almost tripled this year and they have the nerve to insist that his claim for prescription be submitted to the group insurance first? If we do that, that means that we have met the maximum amount for the month and I will have to pay for all my meds.

The only solution that I can see is dropping out of the group insurance and getting private, individual medical coverage. I have a feeling though with my pre-existing condition and my age, it will be hard to get coverage, and if coverage is available, the cost of the insurance probably will be over $1,000.00 a month. We simply can’t pay that.

In short, we are up the proverbial creek without a paddle. If we can just hang on for another year and a half, I will be able to apply for Medicare. But until then I don’t know what to do and the worry is getting to me. It seems that it’s all I think about, and I can’t find an answer.

Insurance is our biggest expense. We have to pay his Medicare, his Medicare supplement, the group insurance, house insurance, and insurance on two vehicles.

Then come taxes. There are house taxes, car taxes, income taxes, FICA, and sale taxes. To add insult to injury, if you have rolled over your 401K after retiring into an annuity as we did, you might be surprised to learn that the Federal government requires that you, after age 71, withdraw a portion every year and pay taxes on that money. Last year I began receiving my SS at age 62 and we had the money we had been forced to take from the annuity. As a result, this year for the first time, we have to pay several thousand dollars in income taxes instead of getting our usual hefty refund. The amount we must withdraw from the annuity will be used to pay income taxes. Somehow that doesn’t seem quite fair.