The earlier you begin planning for Social Security and Medicare contingencies and strategizing to reduce the impact of government benefit erosion on yourself, the more choices you will have. (Photo: Shutterstock)

Like the proverbial fluttering of the butterfly's wings that may eventually combine to create a great hurricane, recent changes to Medicare and Social Security rules have gathered into a perfect storm that potentially affects the retirement security of millions.

Seven new requirements and administrative actions enacted over the past three years, each considered on their own to have little impact, add up to a significant erosion of the value of Medicare and Social Security benefits both to current and future retirees.

Three types of rule modifications have been responsible for eating into retirees' finances:

1. Medicare means testing (which determines how much a beneficiary will have to pay for Medicare Part B and Part D premiums, based on income).
2. Social Security cost-of-living adjustments (COLAs – benefit increases to account for inflation).
3. Social Security claiming strategies (that is, a beneficiary's ability to apply for, but defer receiving benefits to increase their future value).

The changes were initially intended to affect only wealthier Americans, but because some of these changes involved either reducing income thresholds or putting off automatic increases to the thresholds, the combined result is to push the impact to lower incomes.