Social Security Q & A:Ask Rusty – Can I Get Medicare Without Claiming Social Security?

Dear Rusty: I am 63 and my full retirement age is 66 and two months. I want to try and hold out to 70 before I start collecting SS. My 2018 Social Security statement said I’m eligible to apply for Medicare at 65. Do I have to be receiving Social Security payments before I can be covered for Medicare? Or can I be covered beginning at 65 and not receive a Social Security check until I desire at 70? Signed: Approaching Medicare Age

Dear Approaching: You can do just as you wish – you can enroll in Medicare at age 65 without claiming Social Security until you are 70. If you wait until you are 70 to claim Social Security your benefit amount will be nearly 31 percent higher than it would be at your full retirement age of 66 + two months.

As you approach age 65 you should enroll in Medicare sometime during the seven-month window called your “initial enrollment period”, which starts three months before the month you turn 65 and ends 3 months after the month you turn 65. If you want your Medicare coverage to start on the first day of the month you turn 65, then you should enroll no later than one month prior to the month you turn 65; if you wait past that, the start of your Medicare coverage will be delayed. Note that while Medicare Part A (hospitalization coverage) is free for those who have earned at least 40 credits for Social Security eligibility, there is a premium for Medicare Part B (doctors and outpatient services). The base 2019 Part B monthly premium amount is $135.50 (may be more for higher incomes). If you are still working and have “creditable” healthcare coverage from your employer, you can choose to decline Medicare Part B coverage without risking a late enrollment penalty to get Part B after your employer coverage stops. If you want to decline Part B you can do so during the Medicare application process when you enroll in Part A.

You should also consider your prescription drug coverage needs once you’re eligible for Medicare. If you do not have “creditable” prescription drug coverage when you turn 65, you will be subject to a late enrollment penalty if you purchase a drug plan later. Although prescription drug plans are referred to as “Medicare Part D”, this coverage is purchased from private providers either as an individual plan, or as part of a Medicare Advantage (Part C) plan (VA drug coverage is also considered “creditable”).

Finally, if you aren’t collecting Social Security when you enroll in Medicare Part B, you will need to make separate arrangements to pay the Part B premium. This is quite easy to do in any of the following ways:

Use your bank’s auto-pay function to automatically send payments to Medicare.

Use Medicare’s Easy-Pay option to have them automatically debit your bank account.

Pay by check or money order via U.S. Mail, using payment coupons Medicare will provide.

Pay by credit card, using the payment coupons Medicare provides (enter card info on the coupon and mail to Medicare).

I suggest that as you approach age 65 you consider contacting a licensed Medicare insurance agent to explore your options for covering the medical expenses, which Medicare Parts A and B do not cover. A licensed Medicare Insurance agent can also help ensure you have prescription coverage.

 

Ask Rusty – Paying Social Security tax doesn’t increase benefit

Dear Rusty: If I started drawing Social Security benefits in May of 2007 at age 62 and continued to work and pay Social Security taxes to date, can I expect an adjustment in my benefits? Signed: Working Senior

Dear Working Senior: Not from simply paying the Social Security payroll tax, because paying your FICA taxes while you continue to work isn’t what will cause an adjustment in your benefit amount. Everyone who works and earns (except certain public sector employees) must pay the Social Security payroll tax, even if you’re collecting Social Security, and that has nothing to do with your personal Social Security benefit amount. Those Social Security FICA contributions you pay while you’re working go into the Social Security Trust Fund, which is a special fund from which all Social Security benefits (and only Social Security benefits) are paid.

Your benefit amount at age 62 was based upon your lifetime work record at that time – specifically, the 35 inflation-adjusted years in which you had the highest earnings. If you continued to work after you claimed your Social Security benefits, and your earnings for any current year are more than in any of those 35 years used to originally compute your Social Security benefit, then you would get a small increase in your benefit amount. But remember that to determine if an increase is appropriate, your earlier years’ earnings are adjusted for inflation. That means that your current earnings would need to be more than the inflation-adjusted earnings to cause a benefit increase.

Each year, Social Security looks at your earnings and determines whether your lifetime “average indexed monthly earnings” (AIME) number has changed, warranting a benefit increase. That annual review continues for as long as you are earning, and whenever you earn enough to replace one of those 35 years used to originally compute your AIME you will see an increase. But if your current earnings aren’t high enough to replace one of those earlier years, your benefit amount will stay the same. Except, of course, for any Cost of Living Adjustments (COLA) which may be granted annually (2018 COLA was 2 percent and 2019 COLA will be 2.8 percent).

This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (amacfoundation.org/programs/social-security-advisory) or email us [email protected].

The Association of Mature American Citizens [AMAC] [https://www.amac.us] is a vibrant, vital senior advocacy organization that takes its marching orders from its members. We act and speak on their behalf, protecting their interests and offering a practical insight on how to best solve the problems they face today. Live long and make a difference by joining us today athttps://amac.us/join-amac.