Retirement is a huge concern for many millennials nowadays. There are many things to think about, such as the amount of money required for retirement, healthcare, and housing. Thankfully, there’s a variety of government programs that can help us transition better towards retirement. Who knows, these programs might even help you retire much earlier.
The first thing you should know about retirement help from the government is individual retirement accounts (IRAs). These accounts are much better than your average savings account because they aren’t affected by tax deductions. Moreover, they have higher annual percentage yields (APYs).
However, there is a caveat to this. You have a limit on how much you can deposit in your IRA. You can only deposit up to $6,000 if you’re aged 50 below and $7,000 above that age limit. On average, IRAs have an APY of 2%, so if your IRA has $10,000 in contributions, you gain $200 in this account. It’s a worthwhile investment knowing that unlike other investment options out there that are affected by tax deductions, this one is yours to keep without any deductions.
Housing is one of the essential needs that every retiree has, but because of the current state of the economy, there’s a good chance you can’t afford one until you’ve retired. With a combination of your IRAs and investments throughout your career, you should be able to purchase a home with cash. However, if you’re part of the low-income bracket, then you can ask the government to help you out when it comes to housing.
Housing Choice Vouchers
Housing choice vouchers are for retirees who have a dire need for shelter but do not have the necessary income to afford one. Once you’ve reached the age of 62 and still can’t afford a home, you get access to this service. Essentially, the government lets you choose from a list of affordable homes. Then, they’ll pay for the subsidy of the selected home while you pay the difference. This drastically decreases your payments in the coming years.
When combined with the Low Income Home Energy Assistance Program (LIHEAP), you can drastically reduce your monthly utility expenses. Furthermore, you can also apply for a USDA house repair once you’ve saved enough money.
USDA House Repair
Homes depreciate, and there is no other way about it. If you’re a retiree and can’t afford to get your home fixed, then this program is for you. You can essentially apply for this once you’ve reached 62 years of age, so you can both have a housing choice voucher and USDA house repair as part of your loan package. This is crucial if you need to repair your home due to depreciation and damages.
You also have the United States Department of Veterans Affairs (VA) housing option. If you’ve been a veteran of the US Army, then you can apply for a VA-specific loan. These loans usually have lower interest rates than any other government loans out there, rivaling the Federal Housing Administration (FHA) loan. Additionally, the VA can also shoulder the down payments for certain homes, which means you’re only paying for the difference after the down payment. This drastically reduces the cost of the home you choose to buy.
Healthcare is essential for every retiree, but not everyone has access to good healthcare once they’ve retired. Many healthcare systems in the United States are controlled by privatized insurance companies, including those on this list. However, these two options are subsidized by the government, reducing their overall cost:
The most famous known government-related healthcare is Medicare. Medicare is available to any US citizen who has worked in the country for at least a year, owned a business, or invested in one. This is important for many retirees because there are a lot of costs that this program reduces, such as medicine, treatment, and check-ups.
However, you might have to look elsewhere when it comes to home care. The assistance of a home health aide is only available if you’ve been through rehabilitation services. If you need it immediately the moment you’ve retired without going through rehabilitation, then you’re going to need to apply to a privatized insurance company.
VA Health Care
Lastly, there is VA healthcare. VA healthcare is better than Medicare because it offers better discounts. However, much like VA housing, you need to be a veteran and have served for the US Army for at least two years.
Retiring might seem far away for you, but you’ll want to secure your future as early as now. With these government programs, you have a leg up for your future.