If you are turning 65 in the near future and considering enrollment in Social Security and Medicare, you should be aware of their distinct age differences. There is a lot of confusion now between the enrollment ages for both programs, and it has left many people wondering what they should do with Medicare. In fact, “Time Magazine” reported Social Security experts are still unclear about the new law.
Social Security age changes
The Social Security landscape has changed significantly in recent years. According to the National Academy of Social Science, the full benefit age for Social Security eligibility is now 66 for people born between 1943 to 1954. However, the age will eventually increase to 67 for people born after 1960. This represents a significant change in the traditional full benefit age because it was previously 65, with early retirement benefits available at 62.
It is also important to point out that when 67 becomes the full benefit age, early retirement benefits at 62 are set to decrease to 70 percent of the full benefit age and to 86.7 percent for age 65.
What to do with Medicare when you’re still working
While we are not qualified to provide any insights as to how and when to sign up for Social Security benefits, we can shed some light on what you should do with your Medicare and health insurance if you are still working.
Many people come to us with two common questions about this:
- How does the Social Security age change affect Medicare?
- I’m working beyond 65, so what do I do with my Medicare? Do I keep working, or should I take Medicare Part A because it’s free? And can I contribute to a health savings account (HSA)?
The answer to the first question is that the Social Security age change does not impact the Medicare eligibility age. Medicare enrollment is still 65 years of age. Many people assume the Medicare age has adjusted because the Social Security age has changed, but this is not the case.
The answer to the second question is more complex. Simply put, because you are 65 does not mean you are required to sign up for Medicare Part A. If you are still employed and have a qualified employer sponsored health insurance plan, you do not need to enroll in Medicare.
Furthermore, you cannot contribute to your HSA tax-free if you have signed up for Medicare Parts A or B.
The bottom line is that while this may clarify some of the age eligibility rules, everyone’s situation is different. You may not need to make any Medicare or Social Security decisions now, but you should consider consulting with Medicare experts before you retire so you are aware of your best options.
For more information, contact Tony Montgomery or Tom Kennedy at medicare@murrayins.com or call 717.397.9600.
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