Don’t Let Social Security Cuts Dig Into Your Retirement Income

Published on April 3, 2018

Hedge Against a Lower COLA and Higher Medicare Premiums with Self-Directed Retirement Savings Instead

Medicare recipients are being cut this year because of the increase in Part B of the premium, which covers outpatient care and other services. Unfortunately, the increase effectively wipes out the 2 percent cost-of-living adjustment (COLA) that began in January.

Social Security is undergoing a few other minor changes this year: the full retirement age is now 66 and four months, and, for higher earners who collect benefits at full retirement age, the maximum income increases from $2,687 to $2,788. Also, depending on their situation, many taxpayers may execute a “restricted application for spousal benefits.” In this scenario, the individual restricts the scope of the application to only spousal benefits and not their own; they can collect their own benefits later, with some delayed retirement credits.

Although the Social Security Trust Fund has about $2.8 trillion in assets on its balance sheet, the fund is projected to operate at a deficit starting in 2022-and be depleted by 2034. If this pans out, that will mean sizable decreases in Social Security checks in the future. So, anyone planning to retire in the next 15 years or so may be facing a lower benefit amount than anticipated. And with the Medicare Part B premium increase, many beneficiaries are already dealing with a little bit less in those checks. As a result, some economists fear that Medicare is at risk.

To combat these types of changes workers must save early and often, with discipline and—in today’s economy-with savvy and greater financial literacy. For those individuals who understand certain types of alternative investments and markets, they could be building up a healthier retirement savings account through a self-directed retirement plan.

All Americans should be worried about saving enough to cover out-of-pocket medical costs and be concerned about higher Medicare premiums eating up their Social Security benefit—just two reasons why establishing an IRA is so important during one’s working years. And for those who know and understand alternative assets, opening a self-directed IRA can help them build a more diversified retirement portfolio.

Read up about self-directed retirement plans, browse our white paper library, and get started with our helpful Starter Kits. Have a question and need an answer during business hours? Contact our helpful professionals at or 1-888-857-8058.

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