Medicare and Social Security are linked. Many beneficiaries do not find this out until they go to sign up for Medicare.
It is important to plan how you want to approach your Medicare and Social Security sign up dates – once you make a decision, you really can’t take it back!
Sign up for Medicare with the Social Security Administration
For both Medicare and Social Security, when you want to start your benefit, you are going to go to the Social Security Administration.
While the process of signing up for both of these happens at the same place, they do not, and for most people, should not, start at the same time.
When can Social Security start?
If you qualify for Social Security benefits, they can start anywhere from age 62 to age 70. If you qualify for widow’s benefits, they can start as early as age 60. You get to pick when you want your benefits to begin within this timeframe.
You will not receive your full Social Security benefit until you reach your Full Retirement Age (FRA). FRA is based on the year you were born, but for anyone born after 1943, FRA is no longer age 65.
Full Retirement Age for people getting ready to retire currently is anywhere from age 66 to age 67. You can find your full retirement age here.
Let’s say you were born in 1956. Your FRA is at age 66 and 4 months. If you take your benefit before you are 66 and 4 months, your benefit will be reduced.
If you take your benefit anytime after age 66 and 4 months, you will receive a larger benefit since you delayed.
Keep in mind, if you are married, when one spouse dies, the smaller Social Security check goes away. If you take your check early and reduce your benefit, you may also reduce the benefit the living spouse receives for the rest of their life.
When can Medicare start?
A common mistake we see people make is starting Social Security at age 65 because they think they will receive their full benefit. This misconception occurs since Medicare starts for many at age 65.
Most people are going to become eligible for Medicare on the first of the month of their 65th birthday.
It is important to note, if you have started your Social Security benefit early, before age 65, you will automatically get signed up for Medicare. You will have to contact Social Security if you do not want this to happen.
Do I have to start Social Security and Medicare at the same time?
No, you do not have to start Social Security and Medicare at the same time, and for most people, they should not start them at the same time.
Original Medicare consists of 2 parts: Part A and Part B. You can have different start dates for Medicare Part A, Medicare Part B, and your Social Security check.
Sign up for Part A
Part A of Medicare covers your hospital and skilled nursing. Part A comes at no cost to most people who are eligible for Medicare.
For this reason, we advise almost everyone to sign up for Part A right when they turn 65. Even if you have other health insurance, Part A is free and will provide you a little extra coverage when you might need it.
Sign up for Part B
Part B covers your doctor and outpatient services. It cost $144.60/month in 2020 for most people.
This $144.60 is going to come directly out of your Social Security check if you are already taking your benefit. If you are not taking Social Security, you will be billed for it. You can also request to be billed for it if you’d prefer that over it being automatically deducted from your Social Security.
If you have a high income, you might be subject to IRMAA (Income Related Monthly Adjustment Amount) charges, which is a surcharge on Part B. Cardinal can help you with possibly lowering this charge.
If you are not working at age 65, then you are going to want to sign up for Part B right away. If you still have work coverage at age 65, you are going to want to delay until you retire and lose this coverage.
There are significant lifetime penalties, as well as the possibility for delayed enrollment, if you make a mistake when signing up for Part B. Make sure to consult a professional and research your decision before age 65.
Sign up for Social Security
As we mentioned above, signing up for Social Security is going to happen whenever you elect to take your benefits, whether that is before, during, or after your full retirement age. For most people, their start dates for Part A, Part B, and Social Security are all going to differ.
We see this happen everyday in our practice. We have clients elect 3 different dates because that is what works best for their situation.
For example, we had a client Beth. She was still working when she turned 65, but we advised her to still sign up for Part A since it was going to be free for her.
When she retired at age 66, she started her Part B coverage since she lost her work coverage.
At age 70, she turned on her Social Security check. She wanted to delay her benefit because she did not need the money right away, and this let it grow to a much larger monthly check.
While Social Security and Medicare are linked, you still have the power to decide when to turn each one of these on. It is important to make educated decisions though, because you really don’t have the opportunity to go back and change your mind.
Make Social Security and Medicare decisions based on what is right for you, your situation, and your family. Cardinal can help you figure this out.