When To Enroll In Social Security & Medicare

Social Security and Medicare are often misunderstood for social programs that only aid the low income and disabled in our society.

However, these multi-use programs are mainly intended for the retired, or aging population who have paid into these systems throughout their working lives in advance. The funds paid in are used to support those using social benefits currently with the promise that funds would be there for them in their retirement too. These funds are the cornerstone to retirement for many people, so having accurate and accessible information available is vital.

Social Security was created in the mid-1930s, under President Roosevelt’s term, in response to the devastation seen during the great depression. Social security was the government’s response to fighting the destitution and poverty that was present throughout many families and individual lives. As the years have gone by, social security programs have progressed and reformed to include more groups of people and varying circumstances.

Medicare was created in the mid-1960s as a way to help provide medical care to people (mainly of an aging population) that could not otherwise get health insurance. Medicare, like social security, has expanded over the years, and while it has grown to provide resources to disabled, ill, and low-income people, it is still intended to serve the aging population as a way to have guaranteed health coverage in their later years as well.

Now that we have covered some of the history around social security and Medicare, let’s hop into the who and when of the social security system.

According to ssa.gov, people eligible for social security benefits would be able to start collecting as early as 62. However, if you start collecting benefits before “full” retirement age (67 for those born after 1960 and varied ages if born previous to ‘60) your benefit will be reduced comparatively. This SSA publication (https://www.ssa.gov/pubs/EN-05-10035.pdf) states your benefit at 62 will be 27.5% less than if retiring at your indicated full retirement age. You will also need 40 credits (approx 10 working years) of paying into social security in order to qualify to receive benefits.

While you *can* start receiving a higher benefit at full retirement age, if you can swing it, it may be advantageous to wait until you reach age 70. If you can’t wait until you reach age 70, there is still positive outcomes to waiting even a few months longer to collect. For every month that you postpone collecting earnings (up until 70, there is no increased benefit thereafter) you will see an increase in your future monthly check. For every year past full retirement, you can receive an additional 8% benefit. This can add up to be a huge plus for the long term by delaying the collection of benefits even slightly. For many people, especially those who are still earning, it is realistic to put off benefits for a higher long term amount. There are also benefits for widows and widowers as well as minor children in some cases, so be sure to inquire directly with questions around those circumstances. For other considerations and guidelines to be considered, follow the link at the end of the article to connect to the ssa.gov website publication directly.

When it comes to Medicare benefits, things will work a bit differently. Waiting longer than the Medicare eligibility age doesn’t benefit you and can, in fact, cause premiums to go up. The SSA suggests signing up for Medicare approx 3 months before your 65th birthday. If you are already enrolled in social security, this will be automatic. However, if you are delaying social security benefits, you will need to sign up for Medicare manually. If you are late to sign up, you may also have to pay a late enrollment penalty.

When preparing for retirement, get your facts early and research wisely. There is a lot of misinformation around social security and medicare floating around. Seek counsel directly from the administration for any ambiguous questions and feel more confident in your ability to retire.

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