Without Medicare, millions of older Americans would struggle to afford healthcare. As it is, Medicare comes with a host of expenses that can be burdensome for retirees, from deductibles to premiums. Still, many seniors are relieved to be able to sign up for Medicare once they turn 65.

Key Points from 24/7 Wall St.

• Social Security benefits can be claimed as early as age 62.
• Medicare eligibility begins at 65.
• Signing up for Social Security at 65 could reduce your benefits for life, but it’s possible to enroll in Medicare alone.

If you’re gearing up to sign up for Medicare on time, you may be wondering whether you should also claim Social Security. If you’re old enough for Medicare, you’re old enough to start collecting your Social Security benefits. But whether it’s the best idea to sign up for both at the same time is a different story.

How Social Security works — and why it pays to wait on it

Social Security pays you a monthly benefit in retirement that’s calculated based on your personal wage history. But your filing age is also a factor in how much money you get each month.

If you sign up for Social Security before reaching full retirement age (FRA), your monthly benefit gets reduced. So while you’re allowed to claim Social Security as early as age 62, if you’re 65 right now, it means you were born in 1959 and have an FRA of 66 and 10 months.

Filing for Social Security now while enrolling in Medicare could mean reducing your monthly benefits by about 13% (the exact amount depends on whether you just turned 65 or not). And remember, that’s a permanent reduction, not a temporary one.

So if you need Social Security at the time of your Medicare enrollment, you can file for benefits and accept those lower monthly payments. But if you’re not ready for Social Security, then by all means, don’t sign up. It’s that simple.

Waiting until FRA will give you a larger monthly benefit. And delaying your filing beyond FRA could put even larger checks in your pocket. Social Security boosts your monthly benefit by 8% for each year you delay your filing past FRA, up until age 70.

How to sign up for Medicare alone

What’s confusing about signing up for Medicare is that you do so through the Social Security Administration’s website. But rest assured that you’ll be given the option to enroll just in Medicare.

In fact, you don’t even have to sign up for both Parts A and B if you don’t want to. Medicare Part A, which covers hospital care, is generally free for enrollees, while Part B, which covers outpatient care, charges a monthly premium. If you’re still working at 65 and/or have health coverage through an employer, you can opt to enroll in Part A alone and use it as secondary insurance since there’s no cost.

One thing you do need to know is that if you enroll in Medicare without Social Security, you’ll have to pay your Part B premiums yourself. Medicare allows enrollees to set up automatic payments, though, to ease the process.

Once you’re on Social Security, your Part B premiums will come out of your monthly benefits automatically. But if you don’t need the money from Social Security just yet, then it pays to sit tight and sign up for Medicare alone.

 

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