Jean Chatzky sends strong message on Social Security, Medicare

As millions of Americans near retirement age, personal finance bestselling author Jean Chatzky offers guidance on preparing for realities ahead.

She focuses on Social Security, Medicare, and IRAs (Individual Retirement Accounts), with the goal of helping workers plan for a retirement lifestyle that meets their expectations of a comfortable and rewarding way of life after their careers are over.

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Chatzky outlines practical steps for maximizing retirement income and managing health care costs.

She addresses concerns many Americans have about Social Security, when to claim benefits, and worries about the federal program's solvency.

Chatzky cites projections from the Social Security Administration indicating that the program’s trust funds may be depleted by 2033. If no changes are made, benefits could be reduced by approximately 23%.

“Waiting to claim benefits until at least full retirement age is generally a good rule of thumb because your payments will be larger,” Chatzky said, according to AARP.

Full retirement age for Social Security benefits depends on one's birth year. For most people retiring today, it ranges from 66 to 67, with 67 applying to those born in 1960 or later.

Chatzky calculates that Americans could end up making as much as 30% less if they claim Social Security benefits too early. She emphasizes the fact that such a decrease in one's monthly benefit can impact people for the rest of their lives.

A retired couple is seen walking along a beach. Jean Chatzky offers important advice for Americans on Social Security and Medicare.

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Jean Chatzky talks Medicare enrollment options

Chatzky emphasizes the importance of understanding Medicare enrollment rules and coverage options. She notes that missing enrollment deadlines can result in penalties and higher premiums.

She outlines the differences between Medicare Parts A, B, C, and D, and advises retirees to evaluate their health care needs before selecting a plan.

Chatzky points out that Medicare Advantage plans vary in coverage and provider networks, while supplemental Medigap policies can help cover out-of-pocket costs.

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Medicare Part A is hospital insurance, covering inpatient care in hospitals, skilled nursing facilities, hospice, and some home health services. Most people don’t pay a premium for Part A if they or their spouse paid Medicare taxes while working.

Medicare Part B is medical insurance, which covers outpatient care such as doctor visits, preventive services, durable medical equipment, and some home health care. Unlike Part A, Part B requires a monthly premium.

Medicare Part C, also known as Medicare Advantage, is an alternative to Original Medicare offered by private insurers. These plans bundle Part A and Part B, and often include Part D prescription drug coverage and extra benefits such as vision, dental, and wellness programs. Costs and coverage vary by plan.

Medicare Part D provides prescription drug coverage through private plans approved by Medicare. It helps pay for medications, though beneficiaries still face premiums, deductibles, and copayments.

To fill gaps in Original Medicare, many people also purchase Medigap policies — private supplemental insurance that helps cover out-of-pocket costs such as coinsurance and deductibles, but cannot be combined with Medicare Advantage plans.

Chatzky cites data indicating that only 44% of U.S. households utilize IRAs, despite their potential benefits. She views IRAs as a flexible option for retirement savings, particularly for people without access to employer-sponsored plans.

She recommends investing in diversified mutual funds and maintaining a mix of stocks, bonds, and cash. This approach, she says, can help retirees avoid selling investments during market downturns.

Chatzky also highlights the importance of catch-up contributions for individuals over age 50, which allow for higher annual deposits into IRAs.

Individuals aged 50 and older can make catch-up contributions to IRAs.

In 2025, the standard IRA contribution limit is $7,000, with an additional $1,000 allowed as a catch-up contribution for people over 50 years old.