Back in the olden days, when 65 was the age to apply for full Social Security retirement benefits, Medicare and Social Security seemingly went hand-in-hand. At the same time that you applied for Social Security retirement benefits, you would also apply for Medicare – all at age 65. With changes to Social Security, these two programs have become decoupled. (Of course you always have had a choice of filing for SS earlier or later, but most folks went at 65 nonetheless.)
In the continuous evolution of the Social Security system, as we all know, the age for full retirement benefits has increased – up to age 67 for some folks now. Plus you have the option of applying early for your retirement benefit, as early as age 62. While all this has been going on, Medicare… didn’t change. For most folks, access to Medicare begins at age 65, which is now decoupled from the ages for Social Security benefits. If you’re actively collecting Social Security benefits at age 65 (or you just signed up for Social Security at 65), Medicare comes automatically, and the premium is deducted from your SS check. But if you’re not on Social Security, you have to file for Medicare on your own. And pay for it separately as well, since you don’t have a Social Security check for it to be deducted from.
So, with this decoupling, it is important to keep Medicare in mind as you reach age 65 – because applying late will cause a possible 10% penalty per 12-month period that you delay applying. This penalty will continue for the rest of your life. You can enroll in Medicare as early as 3 months before your 65th birthday – and it makes a lot of sense to get started early, because the process can take quite a while to complete, depending upon your circumstances.
Sterling Raskie, MSFS, CFP®, ChFC®
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And if you’ve come here to learn about queuing waterfowl, I apologize for the confusion. You may want to discuss your question with Lester, my loyal watchduck and self-proclaimed “advisor’s advisor”.
A mistake I made when I was 65. I had, and still have, very good employer-based health insurance. But I could get Medicare A for free, so I thought why not get it and I got it.
A couple of years later my employer started offering a High Deductible Health Plan with a Health Savings Account. I would have liked to choose that option but as I had the free Medicare A, which I actually did not need, I could not do that.