Turn 65 in 2022? Should you apply for Medicare and Social Security?
For many people, turning 65 is a big deal – and a birthday worth celebrating. If you’re going to be 65 this year, here are some key things to keep in mind.
1. You are eligible for Medicare
Medicare eligibility begins at age 65, and you can even purchase coverage starting three months before your 65th birthday. It pays to register for Medicare on time, because if you don’t, you could find yourself subject to costly penalties that will make your Part B premiums more expensive.
If you are purchasing original Medicare (as opposed to Medicare Advantage), you will also need a Part D plan for prescription drug coverage. Medicare Part A will cover your inpatient care and Part B will cover outpatient care, but drug coverage is separate.
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2. But you don’t have to register for Medicare
Just because you’re 65 this year doesn’t mean you’re quitting your job. And if you plan to continue working, you can continue to have access to a group health insurance policy through your employer.
If you’re happy with this coverage and want to keep it, you can delay your Medicare enrollment and avoid a late enrollment penalty. But if you’re not happy with this group plan, know that you’re allowed to work and have Medicare coverage at the same time.
Additionally, if you maintain your group health coverage throughout your work, you may still want to enroll in Medicare Part A. Although you will pay a premium for parts B and D, part A is generally free for registrants. Membership can give you access to secondary insurance that can pay the bill for hospital care that your primary insurance does not cover.
However, once you enroll in Medicare, you will no longer be able to contribute to a health savings account. And so, if you are currently taking advantage of this option, you may want to forgo this free Part A coverage if you keep your group plan while working.
3. You can claim social security, but you may not want
The youngest age at which you can register Social Security is 62, so if you turn 65 this year, claiming benefits is definitely an option. But that doesn’t mean you have to rush to deposit.
You will not be eligible for all of your monthly benefits based on your income history until you reach full retirement age. If you were born in 1957, the full retirement age does not come into effect until 66 and 6 months. Applying for benefits at age 65 will mean reducing them in the process – for life.
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Whether it pays to apply for social security at age 65 will depend on different personal factors, such as whether you are still working full time and what is your retirement savings balance looks like. If your medical condition requires you to reduce your part-time working hours, you may need your Social Security benefits to supplement your income.
On the flip side, if you’re still working full time and aren’t happy with how much you’ve saved for retirement, you might want to sit still and wait until full retirement age ( or even beyond) to claim social security. . Getting a higher monthly benefit could help compensate for having less money than you would like in your IRA or 401 (k).
As you prepare to celebrate your 65th birthday, be sure to keep these important details in mind. They could help you make sound financial decisions that will come in handy throughout your old age.
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