Can you get claim Medicare benefits without claiming Social Security? You sure can, and we’re going to outline the reasons to consider this option along with some of the pros and cons of delaying your claim to Social Security benefits.
First, let’s look at some important information about Medicare and Social Security. Then, we can better understand why it makes sense to enroll in Medicare without claiming Social Security.
Medicare vs Social Security
Health insurance is offered through the Center for Medicare and Medicaid Services (CMS). Social Security provides people with a monthly stipend.
Medicare Part A is free for most recipients and Part B is usually deducted from your monthly social security check.
When beneficiaries enroll in Medicare at full retirement age, they may enroll through one of the online options. However, be careful if you do not want to activate your Social Security Income, or SSI benefit.
Follow the options that allow you to enroll in Medicare separate from your Social Security benefit.
Starting Medicare Benefits
With Medicare coverage, it’s important not to miss any of the deadlines or you’ll be penalized. The most important deadline is the Initial Enrollment Period, or IEP. This is a 7-month period that starts 3 months before the month you turn 65, includes the month you turn 65 and the 3 months after your birth month.
Even if you have creditable coverage through an employer, you will still want to enroll in Part A.
Part A is the hospital coverage. Since you are not enrolling in Social Security, that automatic trigger will not occur. You, as the Medicare beneficiary will need to enroll in Medicare only.
Part B, the medical coverage does have a premium that is imposed. When you decide not to claim your Social Security Income benefits, you will need to complete the enrollment form for Part B, and you’ll need to pay the monthly premium.
For most beneficiaries, it’s easiest to have the bill set as an automatic draft from a bank account.
Medicare Part D is the prescription drug coverage and you will need to select a drug plan and pay that premium directly to your insurance company.
In addition to your drug coverage, you’ll need to consider what type of coverage you want to fill the holes left by Original Medicare. A licensed agent can help you review your options, enroll and assist you in getting your reoccurring premium payments set up.
It’s imperative that you address how you will pay for Medicare Part B as delaying your Social Security benefit prevents SSI from paying that premium out of your monthly check.
Social Security
In this instance the Social Security benefit would be the SSI or Supplemental Security Income, commonly known as retirement benefits. SSI will serve as a monthly income when you’re ready to apply and start receiving benefits. Social Security benefits can be claimed as early as age 62 or as late as age 70.
If you claim social security benefits before you reach full retirement age, you will receive a reduced benefit for a longer period. If you wait until full retirement age (66 years and 4 months) or later, you will receive a higher benefit for shorter period.
This is a situation where you have to make a best guess. Consider some of the following:
- Are you working?
- How is your health
- Does your family history indicate longevity of life
- Do you have other income to support you if you delay taking your SSI benefit
If you apply to start receiving benefits before full retirement age, you’ll receive a reduced monthlybenefit. Your monthly benefit amount will always be reduced. Hence the reason so many beneficiaries opt to delay filing a claim with Social Security.
Furthermore, if you can delay applying for Social Security benefits until after “full retirement age”, your benefits are increased based on your birth year and the number of months you delay.
Once you reach age 70, the benefit increase no longer continues to grow. Currently, beneficiaries who delay receiving Social Security Income benefits are making about 8% more per month.
My Dad and his decision
My own dad, Joe, is receiving his social security income and started taking benefits when he was 65 years old.
Having been diagnosed with COPD in his late 20’s, then Atrial Fibrillation in his 50’s and a few other health conditions, Joe crunched the numbers around age 62. He decided that in order to get the most money from his years of paying into social security, collecting at age 65 presented the best-case scenario.
One in every four 65-year-olds will live past the age of 90. While it’s a tough pill to swallow, Joe doesn’t expect to live to 90.
So, in order to maximize his retirement earnings, he filed his claim for SSI at age 65. Yes, he filed prior to full retirement age. However, he now has the time and income to enjoy his golden years.
This is the reason why
Most people outlive their retirement savings and studies show we’re living longer than previous generations. With this in mind, we need to prepare for a longer retirement period.
That means if you can delay receiving benefits past age 65, you would receive a higher monthly payment. For most folks, that higher monthly payment would kick in around the time their personal savings has been exhausted.
Although you’re evaluating your life expectancy, you need would do well to keep in mind the life expectancy of your spouse. Especially if that spouse plans to collect Social Security Income based on your benefits.
Deciding when to collect your Social Security Income benefit will impact your retirement income as well as your spouse’s retirement income.
If your spouse plans to make a claim for Social Security Income based on their own benefits, then this is a moot point; your spouse would need to make these same decisions that you now face.
The short and skinny, there is no right or wrong answer. It’s never too soon to start considering your personal situation and begin evaluating where you are in life right now; measure that against how you want to live when you retire.
Every person is unique, and you need to weigh your options before deciding. Take heed of the call to action sang by the band Rush, “If you choose not to decide, you still have made a choice”.
It’s a lot to take in and it should take you more than an afternoon to decide if it’s in your best interest to claim Medicare without claiming your Social Security retirement income.
When in doubt, break out a pencil and paper and crunch the numbers.
Tip the scales in your favor and start planning for your future while it’s still in the future. After all, Medicare and Social Security have been planning how to fund your retirement since your parents were still part of the work force.