I was home in Pennsylvania a couple of weeks ago and noticed a social security statement in my Father-In-Law’s drawer in the kitchen. That got me thinking; he is coming up to the age at which he can start benefiting from social security as well as Medicare. What will he need to be mindful of to maximize his retirement benefits?
There are a few age-related things to clarify about social security and Medicare: The earliest age you can receive social security for your retirement benefit is age 62, and for Medicare, it is age 65. If you are receiving social security before age 65, you are automatically enrolled into Medicare by the Social Security Administration. However, if you are delaying social security, but still want to get on Medicare, you’ll need to apply about 90 to 180 days in advance of your 65th birthday.
Medicare premiums are variable depending upon your income. Medicare has a 2-year look-back period at income to see where you fall in Part B and D premiums. This is also adjusted for inflation each year. Click here for a helpful page centered around income-related monthly adjustment amount (IRMAA) for 2023 Medicare Part B & Part D premiums. For 2023, Part B premium is $164.90 per person if your income was below $194k (married filing jointly) or $97k (single). Anything above that adjusts fairly quickly. As mentioned above, this expense is variable so if, for example, you had some high-income earning years before Medicare, those will eventually wash off the 2-year look back and lower your premiums.
Individuals should begin examining the annual benefits they are entitled to from the United States government well before they reach retirement age. Taking Social Security right at age 62 is rarely the most efficient option. Schulz Wealth is here to help you and your family feel secure as the huge professional and personal adjustment of retirement becomes more and more of a reality.
If you are nearing retirement and want to look at your options, or want to start preparing early to help you and your family to be as financially prepared as possible when that time comes, please do not hesitate to contact the financial planning professionals at Schulz Wealth.
These are our thoughts, have a great Thursday.
~ Jared Pestcoe, CFP®