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If she is truly low income, she can live very well as long as she owns no property. Medicaid will pay her Medicare premiums and give her a free cell phone. No copays and everything is free. Being on Medicaid opens up the food banks for free food and she can apply for SNAP(food stamps). Then she can sign up for low income senior housing. Some are fixed rate but many charge 30% of your income. All bills paid. It's not as gruesome as you think!
I dont know the details but this might be reasonable at some stage. Until then she should make the most out of her job and find a way to save a little if working...at least an emergency fund. cutting expenses or sharing expenses with a live-in might help if she can handle a roommate.
How's her health?? What is family longevity history? Depending on those answers, she could be retired and in real poverty for very long while.
Also, there's no way she should be paying for medical insurance until she reaches 65. If her job pays health insurance, she can't afford to quit.
Imo, she should work as long as she can and defer SS until age 70-1/2, if at all possible. Unless she absolutely hates her job and it is detrimental to her health, working will keep her healthier and younger longer. If she isn't even 62 yet, she has a long way to go. I worked until age 67-1/2 without a problem - and could have worked a few more years easily but for the recession and job elimination in 2009.
By waiting until age 70-1/2, her SS benefit will be over 60% higher than what she'd collect at age 62. Just between FRA - which in her case is 66 - and 70-1/2 - SS increases 32%. That is huge. Unless her health precludes working, no way should she begin benefits at age 62.
As others have said, if income is still too low at 70-1/2, she goes on Medicare and Medicaid. Medicaid will pay the Medicare Part B premium which will not be insignificant at that time - probably over $150/mo. Then, there are food stamps, housing assistance, etc. Housing assistance has wait lists, however, so she should plan accordingly as the time approaches.
The free cell phone program, Lifeline, is provided through private telecom companies but is a Federal program funded by fees paid by telecoms. The phones are basic, the call times are limited but texting is usually unlimited. People often call these "ObamaPhones," but the program was started during the administration of President George W. Bush.
People can apply for the phones through the companies that participate; you put your zipcode in a search engine to see if they cover your area. (Google "free cell phones.") If you have already proven you are qualified for one or more of the following aid programs, then you are qualified for the Lifeline program. Its purpose is to help people with financial need apply for jobs, keep in touch with family, supervise their children, etc. Note, these are cell phones, not landlines.
Supplemental Nutrition Assistance Program (Food Stamps or SNAP)
Medicaid
National School Lunch Program’s Free Lunch Program
Supplemental Security Income (SSI)
Federal Public Housing Assistance (Section 8)
Low-Income Home Energy Assistance Program (LIHEAP)
Temporary Assistance to Needy Families (TANF)
Bureau of Indian Affairs General Assistance
Tribally-Administered Temporary Assistance for Needy Families (TTANF)
Food Distribution Program on Indian Reservations (FDPIR)
There are also income limits that qualify some people who are not on any of the above programs, The income limits vary by state. A list can be found here:
I don't know if there's a "better" answer. She will get more money if she waits until FRA and doesn't take her SS at age 62. It may not be much more but it wil be more. When you're on a low income, even a few dollars count.
It will be considerably more.
Retiring at 62 would cost the sister 25% of her SS benefit at FRA. Retiring at 70 would add about 30% to it. A FRA benefit of $1000 would be reduced to $750 if taken at 62 and increased to about $1300 if not taken until 70. That's about $550/month difference. For a person with no other income/assets that's significant money! That she also has health insurance at work and enjoys her job are other pluses.
I would have to pay $400-$650 just for rent for an apartment. Then the utilities, then gas, insurance (Car&renters) then food then cable, then internet....
Instead, I live out of my van.
No rent
Showers/wifi/workout $37 a month (I'd do Planet Fitness but they are across town)
Gas $160 a month
food $75-125
Vehicle Insurance $34 a month ($206 every 6 months)
Mailbox $75 a year ($6 a month)
Some other expenses, but can crunch $450 easy.
Changing job to $1,450 a month....So if careful, save $800 a month?
Thing is, if I work till 62, I'll get $759 a month. I can easily survive at that rate as I have shown....
I know folks getting $700-$800 a month. None of them live very well. Or maybe you're just more creative than they are.
Here's an interesting point about the day of the month that regular Social Security benefits are paid: It used to be at the beginning of the month for everyone; then they started paying it on the first, second, third, or fourth Wednesday depending on birth date. Not only that, but I think they also pushed everyone's first payment back a month. This means the government is saving itself one or two payments for everyone getting Social Security. For example, my husband started getting his benefits at 62. He turned 62 on February 24, but he didn't get his first check until April 27. I believe that under the old system, he would have gotten his first check at the beginning of March, but instead he had to wait until the end of April (almost two full months).
Retiring at 62 would cost the sister 25% of her SS benefit at FRA.
Not only that, but the sister would also be working part time. If she earns over about $16,000 per year and is collecting Social Security before FRA, she will lose $1.00 in Social Security benefits for every $2.00 she earns above that $16,000 threshold.
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