Dear Rusty: I am turning 67 in October and as of today am still employed full time. I really do not plan on retiring unless I am forced to. But how do I arrange my Social Security and Medical care stuff. It seems this subject is like a color, and everyone has a different color they like. Is there any way for me to figure this out with help or on my own? I could really use some guidance. Signed: Perplexed
Dear Perplexed: Okay, let’s look at your Social Security and your Medicare separately, because they’re two totally independent programs.
You do not need to do anything about Social Security until you are ready to start collecting your benefits. Since you have already reached your full retirement age (FRA) of 66, you are now earning Delayed Retirement Credits (DRCs) at the rate of .667% per month. That means that your benefit in October, if you were to claim it then, would be 8% more than it would have been at age 66. If you continue to delay applying for SS benefits, you will continue to earn those DRCs up to age 70, when your benefit amount would be 32% more than it would have been at your FRA. The choice of when to claim your Social Security is yours to make, considering your need for the money, your health, and your expected longevity. The longer you wait (up to 70) the more your benefit will be, and if you expect at least average longevity (about 84 for a man your current age) then you’ll get both a higher benefit amount and more in cumulative lifetime benefits by waiting to claim your Social Security.
As for Medicare, if you are now covered by your employer’s “creditable” healthcare plan, you can delay enrolling in Medicare until your current employer coverage ends (when you stop working). “Creditable” is a group plan with more than 20 participants. If you now have “creditable” employer healthcare coverage (including drug coverage) you won’t be liable for a Late Enrollment Penalty for enrolling in Medicare (or a drug plan) later. If you are still working and know your creditable employer coverage will end soon, you can enroll for Medicare benefits to start coincident with the end of your employer coverage. Or, after you stop working, you can enroll in Medicare during a “Special Enrollment Period” (or “SEP” for those transitioning from employer coverage to Medicare coverage). Your SEP for Medicare will last for 8 months after you stop working, but you only have 63 days after the end of your employer drug coverage to enroll in a Part D prescription drug plan.
The bottom line is this – you don’t need to enroll in Medicare until your creditable employer healthcare coverage ends. And you don’t need to apply for Social Security until you wish to start receiving benefits (just don’t wait beyond 70).
One final point because you were born in 1953: if you are now married and your wife is already collecting her SS, you can file a “restricted application for spouse benefits only” and collect only a spouse benefit from your wife, while still allowing your own benefit to continue to grow until you are 70. But this option is only available to you because you were born before Jan. 2, 1954.
Russell Gloor is an Association of Mature American Citizens certified social security advisor. To submit a question, visit amacfoundation.org/programs/social-security-advisory or email email@example.com.