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Social Security is intended to support America’s senior citizens—but the monthly payments are so low that many of them live in poverty.
The estimated average Social Security benefit for retirees was $1,565, according to the Social Security Administration (although that will increase to $1,657 in January, thanks to a high COLA increase). That means in one year, many of the nation’s elders received a little less than $19,000 as their single largest source of income. Florida, a popular spot for retirees, has an annual living wage of $63,645—leaving a huge gap for seniors living on Social Security to fill.
As a result, many senior citizens struggle to get by financially. In 2019 alone, 8.9% of seniors had income below the poverty thresholds, according to the Congressional Research Service.
There are many programs to help seniors with everything from medication to food to energy. While they may not be enough to fully bridge the financial gulf, they can be a lifeline for struggling seniors.
Seniors Are Eligible for the Low Income Home Energy Assistance Program (LIHEAP)
Energy costs can easily become a major financial burden on low-income households. According to the U.S. Energy Information Administration, households spent an average of $117 per month in 2020 on home energy costs, although prices vary by state; Connecticut, for example, had an average monthly energy bill price of $162, whereas District of Columbia residents paid $89
The Low Income Home Energy Assistance Program (LIHEAP) is a federal program through the U.S. Department of Health and Human Services. It helps low-income households with their home energy bills, such as heating and cooling costs and bill payment assistance (but not water or sewer bills).
Households that participate in other benefit programs, such as Supplemental
Security Income (SSI), may be automatically eligible.
However, LIHEAP isn’t intended to cover all of your energy costs, and likely won’t cover a household’s entire energy bill for the month. Since each state is granted funds for the LIHEAP program, they have different eligibility criteria. Various factors will determine the amount of assistance a household will be eligible for, including where it’s located, income, energy costs or needs and family size.
Not every state has online applications, so you might have to call or schedule an appointment at an agency depending on where you live. Refer to this LIHEAP map to find your state’s website for more information on eligibility criteria and how to apply.
Tax Credits and Deductions for Senior Citizens
When it comes to filing taxes, there are multiple ways seniors can maximize savings on their tax bill, including:
- Credit for the Elderly or Disabled: The IRS offers this tax credit to help lower a qualifying person’s overall tax bill. There are two types of people eligible for the credit: Those age 65 or older at the end of 2021 or those who are retired on permanent and total disability and have taxable disability income. The credit ranges between $3,750 and $7,500. There are income requirements to qualify for the credit, depending on whether the filer has an adjusted gross income (AGI) or nontaxable Social Security, pension, annuities or disability income equal to certain amounts. Single filers, for example, cannot have an AGI equal to or more than $17,500, or other nontaxable income equal to or more than $5,000. See IRS Publication 524 for more details on how to determine if you’re eligible, and you’ll fill out Form 1040 to claim the credit.
- Standard Deduction for Seniors: Most taxpayers take the standard deduction while filing their taxes, which automatically reduces taxable income without making any itemized deductions. Seniors who are 65 and older at the end of the tax year are eligible for a higher standard deduction than other taxpayers. For 2021, the standard deduction for seniors is $14,250 for single filers.
- Medical Expenses: Seniors with high medical expenses may benefit from doing an itemized deduction, rather than a standard deduction. They can deduct both medical and dental expenses that exceed 7.5% of their AGI, including insurance premiums, payments to Medicare and long-term care insurance premiums.
How Seniors Can Apply for Nutrition Assistance Programs
Senior citizen hunger is real. One in 14 seniors aged 60 and over faced hunger in 2019, according to Feeding America, and the pandemic exacerbated the issue of food insecurity among seniors. Research also shows that many of those who are eligible for nutrition assistance don’t receive benefits, either because they aren’t aware that they’re eligible or fear judgment of turning to assistance programs for help.
There are multiple food assistance programs, including:
- Supplemental Nutrition Assistance Program (SNAP) – SNAP benefits, also known as food stamps, help millions of Americans afford food. Approximately 42 million Americans are receiving SNAP benefits in the 2021 fiscal year, according to the USDA. But many seniors who qualify aren’t receiving benefits. The average monthly benefits now sit at $157 per person, accounting for the largest permanent increase in the program’s history. In SNAP, individuals who are 60 years or older, or disabled, qualify for special provisions, such as deducting medical expenses that are more than $35 per month from their overall income in order to be eligible—including health insurance premiums, prescription drugs and nursing care. Read more about SNAP for seniors and how to apply.
- The Emergency Food Assistance Program (TEFAP) – TEFAP distributes nutritious foods from the USDA directly to local organizations, such as soup kitchens and food pantries, that directly serve the public. The food offered is subject to local availability but goes beyond canned products and includes healthy options such as fresh fruits and vegetables, as well as meat, milk and cheese. The program is free, but each state has its own eligibility criteria, such as maximum household income, for people to be eligible. Contact your state distributing agency for more information about how to qualify and apply.
- Seniors Farmer Market Nutrition Program – This program, also run by the USDA, provides seniors access to locally grown fruits, vegetables, honey and herbs. Low-income seniors—those who are at least 60 years old and have household incomes not more than 185% of the federal poverty income guidelines ($23,828 annually for households with one person)—are eligible. Common locations to pick up the food include senior centers and housing. Read more about how the program works and how to apply.
- Meals on Wheels – This national organization delivers daily meals directly to seniors, usually 60 years and older, through local programs. The meal prices are based on individual circumstances, which can be on a sliding scale from no cost to full price. Each program has its own eligibility criteria, such as an assessment of the need for meals or a referral letter from a doctor or social worker. The organization also focuses on maintaining senior independence and dignity through its daily checkups.
Financial Help for Senior Health Care Costs
Health care costs can shape up to be one of the most detrimental financial burdens for senior citizens. Fidelity estimates that a retired married couple, aged 65 in 2021, would need $300,000 saved to cover health care expenses in retirement, even with Medicare coverage.
There are Medicare programs that can help cover health care costs, including:
- Extra Help Program – The Medicare Extra Help program helps individuals afford prescription drugs and applies to individuals who have up to $19,320 in yearly income ($26,130 for married couples) and up to $14,790 in resources, such as money in a checking or savings account, stocks and bonds ($29,520 for a married couple). The Extra Help Program caps prescription drug costs at $3.70 for generic drugs and $9.20 for brand-name drugs covered under the Medicare plan. Read more on the Extra Help program and how to apply.
- Medicare Savings Program – This state program helps individuals who can’t afford their Medicare premiums on their own. There are four different Medicare savings programs and each has different monthly income limits, as well as differences in what it helps pay for. Read more about the Medicare Savings Program and how to apply.
Are Seniors Getting Left Behind?
Forbes Advisor has received mail from older readers expressing the feeling of being left behind by the federal government regarding financial aid and resources. While Social Security saw a huge cost of living increase for 2022 (5.9% compared with 1.3% in 2021), the added funds will barely keep up with skyrocketing inflation.
This negligence is a trend that has been ongoing through several administrations.
Former President Donald Trump failed to lower drug prices. Former President Barack Obama implemented the Affordable Care Act, which helped older Americans who didn’t have employer coverage, and were not yet eligible for Medicare get coverage, get health insurance—but failed to deliver on other promises, such as finding a solution to future Social Security benefits cuts or expanding long-term care coverage.
President Joe Biden campaigned on an assortment of promises for seniors, including lowering prescription drug costs, providing higher Social Security benefits and supporting older workers that remain in the workforce. As of now, though, these topics have received little limelight compared to Biden’s other priorities.
Biden’s Build Back Better plan, which is currently being negotiated on by Democrats, doesn’t include many provisions to help seniors. An increase to SSI could be left out, and a plan to lower prescription drug prices failed to pass a Democratic committee, threatening its future implementation.
While various programs that can help senior citizens with tight finances, they don’t cover all seniors, and they only cover small fractions of what’s actually needed. Will Congress implement stronger programs to help aging Americans’ finances during their golden years? It remains to be seen.