As we start to age, we tend to focus on the issues that start to present themselves, such as finances, cognitive decline, aging, aches, and pains. Although health concerns and other issues come with aging, there are many positive things that come with getting older such as senior discounts and benefits. Most times these perks are for people ages 50 and older. You can take advantage of benefits like senior discounts, certain tax deductions, and travel deals. Oftentimes, seniors aren’t aware of the available to them so we are going to explore some of the great benefits you can get.
Being older is awesome! Next time you go grab a bite to eat or make a retail purchase, ask to see if they offer senior discounts. Most times, the retail store or restaurant won’t promote it, but if you ask, you just may be in luck. Places such as museums, movie theaters, and other entertainment venues often offer reduced admission to those over a certain age. Another way to save money is with an AARP membership—you need to be at least 50 to join and you can save on things such as car rentals, hotels, and grocery shopping. Just ask the business you visit; show proof of age and you’d be pleasantly surprised at how many senior discounts are available to you.
Seniors are eligible for different tax deductions. If you are over a certain age, you could qualify for property or school tax exemptions based on your income level.
Senior deductions and tax credits:
⦁ Social Security Tax Exemption – Typically, social security earnings are exempt from income taxes. Depending on the state you live in and how much you earn through social security, you may not have to pay taxes if you file as an individual. If your earnings are between $25,000 and $34,000, you may only have to pay income tax on 50% of your benefits. Remember to always check with a tax professional.
⦁ Medical Expense Deduction– Generally you are not allowed to deduct general health expenses, such as vitamins or health club fees. You may deduct most professional medical fees that are paid to a doctor or dentist, such as:
o Prescription drug cost
o Mental health expenses
o Health insurance premiums
o Cost of glasses and dentures
⦁ Elderly/ Disabled Tax Credit – To be eligible for this particular credit, you need to be over the age of 65 or permanently disabled. This credit allows you to deduct money owed to the IRS. This credit can also get you a refund if the deducted amount is greater than the amount you owe to the IRS. The deduction is phased out at certain income thresholds, so speak to your accountant to see if you qualify for a tax credit based on your income and the current year’s income threshold.
⦁ Home Ownership Benefits – Owning a home is most definitely an asset that can be used in many ways, including a tax deduction. If you are a senior who still pays a mortgage, you may deduct all mortgage interest on mortgages that do not exceed $750,000. When it is time to sell your home for whatever reason, you may use the profits to pay for senior living facilities, which then you may be able to deduct as a medical expense.
⦁ Charitable Deductions – Not many seniors know about this one. If you have donated clothing, for example to Goodwill, you can deduct the sale value of the clothing to charity. Typically, you are only able to deduct 50% of your adjusted gross income, so if you donate a hefty amount, speak with a tax professional to know about your options on how to maximize your tax benefits
Affordable Health Insurance
Since doctor visits are more common as we age, being able to afford health insurance is key. Medicare is a great option for seniors over the age of 65. This program is divided into different parts A, B, C, and D. Different Medicare plans parts cover different medical expenses—doctor visits, and medications that make health coverage more affordable.
⦁ Medicare Part A – Known as hospital insurance, this part of the insurance covers in-patient hospital stays. This coverage is free of charge and most seniors are eligible. Another bonus is, if you are already receiving social security coverage, you’re automatically enrolled in parts A and B
⦁ Medicare Part B – This part covers different outpatient services such as doctor’s visits, medical equipment, and different diagnostic tests. This part of the insurance typically isn’t free. It has both monthly premiums and small deductibles, but you can choose to opt-out at any time.
⦁ Medicare Part C – These plans are usually called Medicare Advantage plans. It serves as an alternative to parts A and B. They are offered by private insurance companies that contract with and receive compensation from the federal government.
⦁ Medicare Part D – Part D covers the medication expenses if you are enrolled in parts A and B.
Nearly all seniors know about Social Security payments. You can start receiving payments at the age of 62, but some people wait until the age of 70 to increase the amount of money they will receive each month. The payments you receive are based on how long you have worked and how much income you made during that time. If you have very few assets and are older than age 65, you may qualify for supplemental security income.
Life Insurance Policies
Many seniors find they no longer need or want their life insurance policy or find that the premiums are too expensive in retirement. There are better options than to just stop paying the premiums and lapsing or surrendering their policy to the insurance company for the accumulated cash value if any. More and more seniors are selling their policies through a life settlement. A life settlement is when you sell your policy to a licensed third party called a life settlement provider. They pay you a lump sum and pay the premiums going forward until they collect the death benefit. If you qualify, your cash payout will always be more than the cash surrender value and can often be much more. Your life insurance policy is one of the most valuable assets you have. Here are a couple of options.
⦁ Borrowing the cash in your life insurance policy: If you own a permanent policy such a whole life or universal life, you may be able to borrow against the accumulated cash value in the policy. These loans can have some disadvantages, but they do give you access to cash without having to sell the policy. While the loan would be deducted from the death benefit upon your passing, and is subject to interest, it would allow you to leave the remainder of the policy’s proceeds to your beneficiary but you must to continue to pay the premiums.
⦁ Life settlement or viatical settlement: For those over 65 or have a terminal illness, this is a popular option where you could sell your life insurance policy for a cash payout and you can use the cash for whatever you choose…Travel, paying off debts, long-term care, memory care, whatever you desire and you no longer have expensive premiums to pay. If a life settlement interests you, speak to the team at MRE Finance LLC. They specialize in life settlements and can help you determine if your policy qualifies for a life settlement and can guide you through the process of selling your policy. Contact MRE Finance today at 1-800-521-0770 or click here to use our free life settlement calculator to find out the value of your life policy and start your journey to financial freedom
Getting older doesn’t have to be a negative, use age to your advantage and be proud. You can enjoy benefits younger people can’t access and most times seniors aren’t aware of. So, next time you are out eating at your favorite restaurant or shopping at your favorite store, see if they offer senior discounts. When the time comes to do your taxes, find someone who specializes in helping seniors take advantage of tax credits and deductions. Also, take a look at your life insurance policy, you may be surprised at the value it has and the options available to you. Finally, be sure to share this information with your friends so they can get in on the action too!