When most people think about government help with retirement, they think about Social Security and Medicare. This isn't necessarily surprising since nine out of 10 retirees receive Social Security benefits, and virtually all retired Americans age 65 or older are enrolled in Medicare.
Other government programs are also available, but many older citizens do not participate for a variety of reasons, including lack of knowledge about available programs and the complexity of the application process. Read on to learn about what's available, who qualifies, and how to obtain help, along with information about how the COVID-19 pandemic has impacted many of these programs.
- Government programs are in place to help many individuals adjust to—and live through—retirement.
- Income programs include Social Security, the Senior Community Service Employment Program, and the Federal Employee Retirement System.
- You can take advantage of tax services through a wide variety of tools and programs.
- Vouchers and subsidies can help individuals transition to different housing.
- Federal and state governments have a series of healthcare- and nutrition-related programs underway to help older citizens stay healthy.
Your retirement income likely arrives in your bank account from more than one source. The primary income source for most retirees is Social Security or a pension. Other sources include investment income, full or part-time employment, and government programs designed to help supplement (or help you supplement) your retirement income. Here are the most common government programs that affect your retirement income.
Social Security is an earned benefit, meaning you pay into it during your working years and receive a monthly payment after you retire for the rest of your life. Your lifetime earnings impact the amount you receive, as does your age when you retire. The longer you wait to retire, up to age 70, the more you receive when you claim your benefits.
Your spouse or widow(er), at least 62 years of age, can collect based on their earnings or on yours. The same applies to a divorced spouse if the marriage lasted at least ten years. A widow(er) only has to be 60—50 if they are disabled—to collect.
Supplemental Security Income (SSI)
This is one of the most well-known government programs that provide additional financial support to low-income citizens who are blind, have disabilities, or are 65 or older. If you qualify for SSI, you may receive help from both the federal government and your state. Unlike Social Security, you must continue to qualify to receive benefits. Income and living arrangements will determine how much you will receive.
SSA Benefit Eligibility Screening Tool (BEST)
The Social Security Administration's Benefit Eligibility Screening Tool (BEST) provides an easy way to find out if you qualify for any additional programs run by the SSA. In addition to Social Security and Medicare, programs covered include SSI, disability, family, spousal/widow(er), and special benefits for veterans. BEST lets you make sure you don't miss any benefits for which you qualify; the screening can all be done online.
Senior Community Service Employment Program (SCSEP)
This Department of Labor (DOL) program helps seniors obtain long-term employment through the learning of new skills such as computer programming and through paid community service at public facilities, including schools, hospitals, daycare centers, and senior centers. The idea is that, through this subsidized on-the-job training, you will eventually gain unsubsidized employment.
Federal Employee Retirement System (FERS)
The Federal Employees Retirement System (FERS) is for anyone who worked for the federal government. There are three sources of benefits in FERS:
- A basic benefit
- Social Security
- The Thrift Savings Plan (TSP)
These three parts provide you with a regular annuity payment each month after you retire.
Retirement Savings Plans
Work-related retirement savings plans such as 401(k)s, individual retirement accounts (IRAs), 403(b)s, or 457(b)s are not government programs per se, but the government is involved with them through Internal Revenue Service (IRS) regulations. These rules affect the amount of money you can set aside for retirement each year, when you can take it out, and what the tax consequences will be.
To learn more about available retirement savings plans, how they work, and how not to run afoul of government regulations, refer to the IRS Choosing a Retirement Plan website.
COVID-19 Relief for Retirement Plan Withdrawals
The COVID-19 pandemic exacerbated the shortcomings in the Social Security system's customer service. It also encouraged fraudsters to target senior citizens, causing the Social Security Inspector General to issue a warning about Social Security scams. Section 2202 of the CARES Act expanded distribution options, eased rollover rules, and provided favorable tax treatment for withdrawals of up to $100,000 related to COVID-19 from 401(k) plans and IRAs. CARES also increased the loan limit for some retirement plans.
Tax Assistance Programs
As a retiree, the taxes you pay will depend on the amount of income, the income source, and the degree to which you take advantage of available deductions. Government programs are available to help you prepare your taxes and, in some cases, offer additional assistance if you qualify. Additional information about your taxes is available in IRS Publication 554: Tax Guide for Seniors.
Tax Credit for Older People and Those With Disabilities
The IRS offers a tax credit if you are older or have disabilities, which is outlined and explained in IRS Publication 524. Basic qualifications include being 65 or older at the end of the tax year or being retired with a permanent disability, and having taxable disability income. There are also income limits that further restrict eligibility.
Tax Counseling for the Elderly (TCE)
The Tax Counseling for the Elderly (TCE) program offers free help with your taxes if you are age 60 or older. While the program is sponsored and funded by the IRS, it is conducted by qualified organizations that apply for an IRS grant to run the TCE program in a local area.
Volunteer Income Tax Assistance (VITA)
The IRS Volunteer Income Tax Assistance (VITA) program offers free basic tax return preparation to qualified individuals, including older people. General qualifications include an income of $60,000 or less, having a disability, or having limited English skills. As with TCE, VITA is funded by the IRS but run by local organizations.
IRS Publication 3676-B lists services provided by both TCE and VITA and also includes a handy list of the items and documents you need to bring for your session. The IRS also sponsors a Locator Tool you can use to find TCE or VITA programs near you.
Many people maintain the same housing in retirement they had while they were working, be it a single-family home, condo, or apartment. As you age, the decision to stay put may result in the need to adapt your housing to limited mobility or just to make major repairs.
You may also need to transition to different housing at some point, including assisted living, nursing care, or memory care. Many of these transitions are accompanied by government programs designed to help you as you age.
Housing Choice Vouchers
The U.S. Department of Housing and Urban Development (HUD) sponsors the Housing Choice Voucher program, formerly known as Section 8 Housing. This program offers housing assistance if you are at least 62 years of age and qualify due to low income. There is a long waiting list in many areas, so you may have to make other living arrangements until a spot opens up. You apply for the program at your local Public Housing Agency (PHA).
Private Rent Subsidies
HUD also makes it possible for owners of private rental units, including apartments and houses, to offer subsidized housing to low-income seniors. With this program, you find your own housing using the HUD Resource Locator and apply at the rental office. The Resource Locator allows you to target rental housing for seniors or look up housing near you that is available to all low-income clients.
USDA Housing Repair Program
This United States Department of Agriculture (USDA) program, also known as the Section 504 Home Repair program, sponsors grants and low-interest loans to repair or improve your home. You must be at least 62 years old and meet the program's low-income requirements. Grants do not have to be paid back, but loans do.
Low Income Home Energy Assistance Program (LIHEAP)
The U.S. Department of Health and Human Services (HHS) provides cash grants to help you pay your heating (and cooling bills) through the LIHEAP program. Grants can also be used to install insulation, floors, and ducts or repair or replace inefficient heating or cooling units. Grants for utility bills may be paid directly to your utility company.
This program has no age requirement and is based on income only, although older people and those with disabilities are part of the target population for LIHEAP. The HHS LIHEAP Resource Guide provides information about how and where to apply for assistance.
Home Equity Conversion Mortgages (HECMs) for Older Homeowners
Home Equity Conversion Mortgage (HECM) is the name of the Federal Housing Administration (FHA) version of a reverse mortgage. It's the only reverse mortgage insured by the federal government and is only available through an FHA-approved lender.
A reverse mortgage allows you to withdraw a portion of your home's equity in the form of a loan that you pay back over time or when you leave your home. The amount you receive depends on the amount of equity, the age of the youngest borrower, current interest rates, the lesser of the appraised value or HECM FHA mortgage limit, or the sales price of the home.
An explanation of the program can be found on the HUD website.
HUD also sponsors housing counseling agencies all over the country that can provide advice on buying or renting a home and how to deal with defaults, foreclosures, and credit problems. Agencies are listed by state on the HUD Office of Housing Counseling website.
If you want to zero in on a specialist, you can also look specifically for a reverse mortgage counselor or a foreclosure avoidance counselor, depending on your needs. If you prefer, you can also call HUD's interactive voice system at (800) 569-4287.
As with the LIHEAP program, the housing counseling program isn't just for older people. It also may not be free, although fees are based on what you can afford and may not apply depending on your income. Any fee is disclosed upfront.
COVID-19 and Government Housing Programs
One of the most significant actions taken by the federal government related to COVID-19 came in the form of a temporary moratorium on foreclosures and evictions from government-funded or sponsored housing.
The original FHFA moratorium on foreclosures and evictions for multi-family housing was extended in June 2020 via a three-month forbearance extension for landlords. This came with a stipulation that tenants could not be evicted during the forbearance for inability to pay rent.
The program was extended several times but expired at the end of July 2021. The enrollment window for the mortgage payment forbearance program, which was also part of the COVID-19 stimulus packages, expired on Sept. 30, 2021.
A moratorium was also in place for rent payments as a result of the COVID-19 pandemic, which was also extended several times since the first stimulus plan went into effect. Tenants may apply for emergency rental assistance to help cover the cost of their rent. The program, which totals $46.55 billion in aid, is administered through the U.S. Treasury. To find the program in your area, check out the Consumer Financial Protection Bureau website.
Housing discrimination is illegal. If you think you've been discriminated against based on race, religion, sex, marital status, use of public assistance, national origin, disability, or age, there are steps you can take. One such step is to file a report to the Consumer Financial Protection Bureau (CFPB) or with HUD.
Retirement healthcare is typified by Medicare in the same sense retirement income is associated with Social Security. As important as Medicare is, it's the tip of the iceberg when it comes to government healthcare programs.
Medicare is a long-running health insurance program provided by the federal government. It has four parts: Part A (hospital), Part B (medical), and Part D (drugs). Part C is commonly known as Medicare Advantage.
There is no cost for Part A for most people. Part B charges a monthly premium that is adjusted annually, with about 7% of plan participants charged more than the basic premium based on their income. The basic monthly cost of Part B for 2023 is $164.90, down from $170.10 in 2022. The cost of Part D varies with the plan you choose. The average basic monthly premium for standard Medicare Part D coverage is projected to drop to $31.50 in 2023 from $32.08 in 2022.
Medicare Advantage is a separate category of Medicare-approved plans from private insurers that typically provide coverage comparable to Medicare Parts A, B, and D. Medicare Advantage participants must still pay their Medicare Part B premiums, though some plans will offset some or all of that cost. The average monthly premium for a Medicare Advantage plan (excluding the cost of Part B premiums) is projected to drop to $18 in 2023 from $19.52 in 2022.
Medicare is available when you turn 65, and full information can be found on the Medicare.gov website.
Medicare Savings Programs
Medicare Savings Programs are run by each state. Depending on your financial circumstances, a savings program may pay your Part A and Part B Medicare premiums, deductibles, coinsurance, and copayments.
There are four types of Medicare Savings Programs—each with its own income and resource limits and each offering its own benefits. You may also qualify for Extra Help, which pays for Part D coverage. You apply for this coverage through your state Medicaid Program office.
If your income and resources are limited, you may qualify for Medicaid; a program paid for by both federal and state governments. Medicaid pays for visits to healthcare providers, hospital services, x-rays, transportation, drugs, and certain home health services, as well as nursing home care. Benefits vary from state to state. You apply through your local Medicaid office just like you do with the Medicare Savings Program.
VA Health Care Programs
Military veterans also have access to the VA health care system. Depending on your age and military service, you may qualify for hospital coverage, home health services, hearing aids, dental benefits, mental health programs, and more.
The VA does not require you to enroll in Medicare Part D since pharmacy services are included with VA coverage. You will need to provide proof of service (usually by producing a copy of your DD214). In order to qualify, you must complete the application on the Veterans Administration website, by phone, by mail, or in person.
COVID-19 and Government Healthcare Programs
COVID-19 has led to a number of changes in government healthcare programs, including coverage of various coronavirus-related tests and treatments by Medicare. This includes the relaxation of various standards and requirements for Medicaid and other programs. In addition, the CARES Act provides additional coronavirus-related funding for government healthcare programs mentioned here.
Government programs provide support for proper nutrition care for low-income seniors and others nationwide. Many of these programs are run by states with federal support.
Supplemental Nutrition Assistance Program (SNAP)
SNAP, formerly known as Food Stamps, provides eligible low-income seniors with a stipend to spend on food. The amount you get depends on your income level and can vary by state since states run the program. The SNAP program can also have different names in different states. To find out if you are eligible, you must apply with your local SNAP office. There are special rules for older people and those with disabilities.
Senior Farmers' Market Nutrition Program (SFMNP)
This USDA program issues coupon booklets to older people with low incomes that can be used to pay for fresh fruit, vegetables, and other foods at local farmers' markets and outdoor stands. These coupons are not usable for nonperishable foods and are available on a first-come, first-served basis. Not all farmers' markets accept them, so it's wise to check in advance.
The Emergency Food Assistance Program (TEFAP)
TEFAP is also administered by the USDA, which distributes food to each state to be handed out at food banks and soup kitchens, where the food is provided to eligible low-income older people. States set the eligibility criteria, including income standards. The State Distributing Agency in your state can provide details about availability in your area.
Child and Adult Care Food Program (CACFP)
Another USDA food program, CACFP, provides nutritious meals and snacks to eligible adults enrolled in adult daycare centers. Adults at least 60 years old or living with a disability may be eligible for this program. To locate an adult daycare center that offers this program, contact your state agency.
Commodity Supplemental Food Program (CSFP)
The USDA Commodity Supplemental Food Program (CSFP) differs from the Child and Adult Care Food Program in that it provides foods (commodities) instead of meals. To be eligible, you must be at least 60 years old and qualify as low-income, according to guidelines in the state where you live. Program guidelines and application information are available on the CSFP website.
COVID-19 and Government Nutrition Programs
Food and nutrition programs, including SNAP and TEFAP, are major beneficiaries of both funding from the CARES Act and rules changes to make food distribution easier during the pandemic.
Where to Look for Help
As noted above, one of the main reasons older people don't take advantage of government assistance is a lack of knowledge. There are resources to help you find government assistance programs for which you qualify.
BenefitsCheckUp from the National Council On Aging (NCOA) is one such tool. Use this service to find out which of more than 2,500 public and private benefits programs may apply to you. There are programs for prescription drugs, nutrition, help with utility bills, income assistance, healthcare, and much more.
The Eldercare Locator service, sponsored by the U.S. Administration on Aging, helps you locate agencies near where you live that provide a variety of services to older Americans. Services include meals, transportation, home-based care, and other caregiver support services. If you prefer, you can call Eldercare Locator at 1-800-677-1116.