Personal Finance
I'm 65 and Need Medicare. Should I Claim Social Security, Too?
Published:
Right now, a lot of older Americans have Medicare on the brain because we’re in the midst of the program’s fall open enrollment period. But one misconception about open enrollment is that it’s when you’re supposed to sign up for Medicare coverage.
Fall open enrollment is for current Medicare participants only. Your initial window to sign up for Medicare starts three months before the month of your 65th birthday, and it ends three months after that month. And your coverage itself begins at 65.
Key Insights from 24/7 Wall St.
If you’re 65 and entitled to Medicare, you may be wondering whether you should sign up for Social Security benefits at the same time. But it’s important to understand the consequences of doing so.
The monthly benefit Social Security pays you throughout retirement will hinge on your earnings history and filing age. You’re eligible for that monthly benefit without a reduction once you reach full retirement age.
If you’re 65 already and were born in 1959, full retirement age for Social Security is 66 and 10 months. If you were born in 1960 and turn 65 soon, your full retirement age to get benefits is 67.
Claiming Social Security before reaching full retirement age will result in a reduced benefit. So that’s a not good reason not to sign up for Social Security in conjunction with your Medicare enrollment at 65. However, you’ll need to consider your personal situation when making that choice.
Filing for Social Security ahead of full retirement age can be problematic when you don’t have much savings and your monthly benefit constitutes the bulk, or all, of your retirement income. The average retired worker on Social Security today collects about $1,924 a month. Living on your complete monthly benefit alone is hard enough, so you don’t want to make life more difficult by filing early and getting less.
But if you have income available to you in retirement outside of Social Security, then signing up at the same time as Medicare isn’t such a terrible idea. First of all, you’re not facing the largest reduction possible to your monthly benefit — that only happens if you file at the earliest possible age of 62.
Also, if Social Security is only one of several income sources at your disposal in retirement, then a modestly reduced benefit may not be so detrimental. It may be that you have a decent-sized nest egg, a second home you rent out for money, and a family business that cuts you a check every month. In a situation like that, a small hit to your ongoing Social Security payments may not matter. And that way, if you decide you’re ready to retire at 65, you’ll have more options for replacing your missing paycheck.
To be clear, there’s no need to sign up for Social Security at the same time as Medicare. Many people get health coverage through Medicare for years before taking benefits. And there’s an upside to waiting on Social Security beyond full retirement age. For each year you do, up until age 70, your benefit gets an 8% increase.
But you should also know that you don’t have to claim Social Security when you sign up for Medicare. And in some cases, waiting is the more financially sound move.
Start by taking a quick retirement quiz from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes, or less.
Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future
Get started right here.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.