Medicare and Social Security: in the minds of many these twin pillars of retirement seem to go together. Yet in fact, signing up for Medicare and starting Social Security benefits are separate decisions, and if you’re one of the millions who plan to delay beginning Social Security until after age 65, there are some important things you need to know about Medicare in order to get the coverage you need without costly lifelong penalties.
Social Security Enrollment More Flexible Than Medicare
Since we get plenty of questions about this topic here at AgingOptions, we were drawn to this recent article on the USNews website. Written by staff writer Emily Brandon, the article is specifically targeted at seniors who plan to wait until at least age 66 – full retirement age for most boomers – to begin taking Social Security, yet who also plan to sign up for Medicare at the age of eligibility, which is 65. This one-year difference between Medicare’s age of eligibility and Social Security’s full retirement age causes confusion in the minds of many people – a confusion compounded by the fact that, while people generally have plenty of flexibility concerning when they start taking Social Security, Medicare’s rules are much more restrictive and penalties for non-compliance more burdensome.
Many have expressed frustration over the government’s unwillingness to resolve this confusion between the rules governing two programs essential to the health and wellbeing of just about every senior in America. For instance, we found this quote from the website of the Center for Medicare Advocacy:
“While most Americans are eligible for Medicare at age 65, full retirement under Social Security is increasing over time to age 67. Further, while individuals can choose to take early Social Security retirement, at age 62, Medicare will still not begin until age 65. In addition, many people choose not to collect Social Security until they reach full Social Security retirement age, or beyond. All this can create significant confusion about enrolling in Medicare. An error in timing can mean individuals will be subject to premium penalties, limited enrollment opportunities, and/or delays in coverage if they do not enroll in Parts A and B when they are first eligible. Yet, little or no notice about Medicare enrollment is provided to the ever-increasing number of individuals who don’t collect Social Security retirement when they turn 65.”
Medicare Before Social Security? Things to Remember
That being said, if you’re among the many about to turn 65 and ready to enroll in Medicare without Social Security, here are some important things you need to know, according to USNews.
- Social Security and Medicare are separate decisions. As we said above, while you typically have to enroll in Medicare once you turn 65, it’s fine to delay Social Security. But be prepared to research each program separately and choose wisely.
- Some people are automatically enrolled in Medicare. Because most people start Social Security at 65 or sooner, it’s important to know that most Social Security recipients are automatically enrolled in Medicare, with coverage beginning the month they turn 65. Three months before your 65th birthday, says the article, you’ll receive a Medicare card in the mail along with a welcome packet. Most noticeably, you’ll begin to see that Medicare will start deducting premiums from your Social Security check.
- Remember to sign up for Medicare on time. The critical thing to remember here is that, if you’re not on Social Security, you have to be proactive and deliberate about Medicare enrollment. “You first become eligible to sign up for Medicare during the seven-month period that begins three months before your 65th birthday,” says USNews. “If you don’t sign up for Medicare during this Initial Enrollment Period, you could be charged a late enrollment penalty for as long as you have Medicare.” This can get complicated, so we urge you to contact us at AgingOptions so we can help make sure you get the right information.
- Beneficiaries who work can avoid the Medicare late enrollment penalty. Odds are, if you’re delaying Social Security, it’s because you’re still working. If you (or your spouse) are on the job and covered by an employer health insurance plan, you’ll avoid late enrollment penalties so long as you sign up for Medicare within eight months of leaving the job or losing coverage. Retiree health insurance and COBRA benefits from a former employer don’t count.
- Be prepared to get a bill. Once again, most Social Security beneficiaries have their Medicare Part B premiums automatically withheld from their checks. If you sign up for Medicare but not Social Security, you will get a bill for $135.50 per month, the standard Part B premium in 2019. Higher income seniors ($85,000 for individuals and $170,000 for couples) will pay more – between about $190 and $460 monthly.
- Don’t wait until age 65 to start researching your Medicare options. This is great advice. “Signing up for Medicare requires you to make a variety of important decisions,” says USNews. “Thinking about it two or three years out makes a lot of sense.” Our advice is to start planning, preparing and information-gathering early. “Shopping around and meeting the enrollment deadlines will help you cover your health care needs at the lowest possible cost.”
Planning and Preparation are Key Elements
Planning and preparation are essential to making good decisions about all aspects of retirement, not just Medicare and Social Security. Medicare is a vital component of ensuring good health, and Social Security is essential to the financial well-being of the majority of seniors, yet successful retirement involves more than health care and a predictable income. You should also look ahead to the kind of housing choices you’ll want to make in the future. You should think about the sort of legal protection that might be necessary to safeguard your estate and protect your wishes. You also need to take your family into account and make certain they know how you want to live in retirement. Is there one approach to retirement that encompasses all these vital facets of retirement? Fortunately, the answer is yes: a LifePlan from AgingOptions.
The best way to learn more is to join Rajiv Nagaich at a free LifePlanning Seminar. There you’ll discover the answer to many of your retirement questions and you’ll gain valuable insight to help you plan for the secure and fruitful retirement you’ll always hoped for. For a calendar of upcoming seminars, visit our Live Events page and enroll in the event of your choice. It will be a pleasure to meet you!
(originally reported at https://money.usnews.com)