Medicare and Social Security are 2 different programs.
Social Security pays retirement, disability, or survivor benefits.
Medicare pays for inpatient hospital care, nursing care, doctor’s fees, drugs, and other health related costs for those aged 65 or over.
Means-Assessed
Means assessed means that something is based on your means.
It’ll be based on your ability, or means, to take care of yourself with your own assets instead of relying on Social Security or Medicare, neither of which are currently means-based.
If someone, say, has $10 million in assets, should they receive the same level of medicare or social security as someone who is less able to pay their own way through retirement?
A Way To Fix Social Security
Although Social Security is not means assessed, it could be in the future. If it was, it would help keep Social Security funded.
Given the magnitude of obligations the Baby Boomer generation will require from Medicare and from Social Security, there’s a strong case for it.
Means assessed Social Security would result in those with more means would have a lower Social Security benefit.
It may be wise to anticipate this change for anyone who is an high income earner or has a balance sheet that is expected to provide high income in retirement.
Means assessed Social Security could definitely be a solution in the future.
Next Step
Ready to take the next step and work with a fee-only CFP? Reach out to schedule a Discovery Meeting to learn more.