It is important to understand your Medicare and Social Security benefits post-retirement. Typically, retirees become eligible for Medicare and Social Security at age 65, though your precise eligibility age will depend on the year you were born. You can calculate your full retirement age under the law and see at what percentage your benefits will be reduced if you retire before typical retirement age.
What is Medicare?
The Medicare health insurance program was introduced in 1965 because many private insurance agencies were refusing to cover people over 65. It was originally implemented to help the elderly save money on their hospital bills. The National Academy of Social Insurance says that Medicare has improved the health and longevity of Americans age 65 and older by providing universal healthcare rights to them. By 2015, 46.8 million Americans were enrolled in Medicare because of their age. By 2050, 92.8 million Americans are projected to be enrolled in Medicare. This means that Medicare will likely be the most used health insurance in the United States in the future, so it’s even more important to learn all there is to know about this government program in order to prepare yourself.
How Do I Apply for Medicare?
As people live longer and longer, the need for extended medical care grows. Because of this, it’s important not to leave any government assistance on the table when it comes to your retirement. Make sure that you know what your options are in choosing Medicare insurance for you or your loved one. Your choices for Medicare are:
- Apply for Part A (Hospital Insurance).
- Apply for Part B (Medical Insurance): If you have Part A already and want to sign up for Part B.
- Help with prescription drug coverage: If you need assistance affording prescription drugs, you can apply for “Extra Help.”
- Apply Online for your spouse’s Medicare benefits.
- Apply for Disability and Survivors Benefits.
What Is Social Security?
President Roosevelt signed The Social Security Act into law in 1935, in the throes of the Great Depression. This social insurance program for retirees was a new concept then, but over time the number of citizens eligible for the program has increased. Social Security checks make up the majority of many elderly recipients’ incomes (that was the case for 64% of aged beneficiaries in 2011). How many retirement-age citizens receive Social Security? Well, 20% of the US population (61.9 million Americans) received Social Security benefits in 2012. 55% of those recipients were women. In 2014, about 64.2 million people received a payment from one or more programs administered by the Social Security Administration. 56% of those recipients were women (aged 62 years or older). This shows that the group of SSA recipients (whether retirees, dependents, or those on disability) is growing steadily. Another important fact: the Social Security tax rate is 6.2%, but this is only taxed on the first $113,700 of your employee income. You should already be contributing to your Social Security for the duration of your working years, so that is why it is so important to cash in on your investment. Don’t miss out on this integral part of American retirement! Not sure if you have enough Social Security credits to qualify for benefits yet? Or want to see what your estimated monthly benefits would be? Estimate Your Retirement Benefits. Want to Apply for Social Security Benefits now? Apply Online for Social Security Benefits.
Are you a federal or state government employee? If so, you might qualify for WEP benefits. WEP stands for Windfall Elimination Provision. This means that if you already receive a government pension, your Social Security or Disability benefits might be reduced depending on the size of your government employee pension. Find your eligibility for WEP benefits.Keep in mind that this number can vary greatly depending on how many years you paid into Social Security and how much was withheld by your employer. This list isn’t completely comprehensive, but it is a good place to start. Talk to a financial advisor or call the Office of Social Security to make an appointment if you have more detailed questions. By taking the time to plan for your post-retirement lifestyle now, you’ll be better able to enjoy your golden years.
It Pays to Delay Social Security
It is, of course, your choice when you would like to start receiving your Social Security benefits, but it’s important to consider how your decisions will affect your monthly check.
If you opt to receive your benefits BEFORE your full retirement age, your benefit will be smaller, but you will receive Social Security for more years. If you opt to receive your benefits AFTER your full retirement age, your benefit will be larger, but you won’t receive Social Security for as many years. This start date is crucial, because the base amount you receive for your first monthly Social Security benefit is capped indefinitely.
Find out what your Full Retirement Age is and how much your Social Security benefits will be reduced if you retire before that time.
Who Qualifies for Medicare and Social Security?
Although Medicare, a United States health insurance program, is predominantly for adults 65 or older, you might qualify if you are younger than 65. This qualification would apply to you if you have disabilities and/or permanent kidney failure. If you have a physical or mental illness that keeps you from working, you might be able to receive Social Security disability benefits. Some qualifying ailments include:
- Musculoskeletal issues (from back injury to torn ACL)
- Cardiovascular issues (from heart disease to blood disorders)
- Speech and sense issues (from hearing loss to vertigo or blindness)
- Respiratory issues (from asthma to lung cancer)
- Neurological issues (from Parkinson’s to epilepsy)
- Mental disorders (from anxiety to autism)
- Immune system disorders (from Crohn’s to HIV/AIDS)
- Various other disorders (from celiac to Asperger’s)
- Skin disorders
- Digestive issues
- Kidney disease and other genitourinary disorders
- Hematological disorders
- Endocrine disorders
Find out if your disability qualifies for coverage. Wounded or injured military personnel may also apply for disability benefits through the Social Security benefit program. This might apply even if they are performing limited work, on active duty status, or receiving limited pay. Social Security staff will evaluate your work ability and decide whether or not you can receive Social Security disability benefits. Find out how much your wounded warrior Social Security benefit will be, whether your family will also receive benefits, and other questions.
Spousal Social Security Benefits
If you are married, your spouse has a right to a Social Security check on your record. Don’t worry, though: his/her benefits will not affect the amount of yours. This spousal benefit Social Security applies…
- If he/she is 62 years old or over
- Whether or not he/she has worked under Social Security
- Only if you are receiving retirement or disability
- If he or she cares for a child under 16 years old and/or a child receiving disability
Remember: If your spouse qualifies for Social Security benefits on their own record and the benefit they receive on yours is higher, they will receive the benefit they qualify for on your record in addition to their own benefit.
Your spouse’s Social Security benefit amount can be up to half of your benefit amount. If your spouse wants to receive Social Security benefits prior to the “normal/full retirement age,” their benefit will be reduced. If your spouse is caring for a child that is under 16 years old and/or receiving disability, however, this reduced benefit rule does not apply. The age for spousal Medicare benefit qualification is 65 years old. Here is more information on Spousal Benefits.
Ex-Spousal Social Security Benefits
Be aware that even if you are remarried, your ex-husband or ex-wife may be able to receive Social Security benefits on your record. Remember though, this will not cut into the benefits that you receive. The ex-spousal Social Security benefit applies if…
- He/she is 62 years or older
- He/she is unmarried
- Your marriage lasted 10 years or more
- You are entitled to Social Security retirement or disability benefits
- You don’t receive benefits but have been divorced for 2+ years
Remember: If your ex-spouse qualifies for Social Security benefits on their own record and the benefit they receive on yours is higher, they will receive the Social Security benefit they qualify for on your record in addition to their own benefit. Here is more information on Ex-spousal Benefits.
Child Social Security Benefits
Children that might qualify to receive Social Security benefits on your record include:
- Biological children
- Adopted children
- Dependent grandchildren
To receive Social Security benefits, your child must be:
- Unmarried and under 18, or
- 18-19 years old and a full-time student in K-12 (not college), or
- 18 or older and disabled from a disability incurred before 22 years old.
Be aware that if your family contains multiple individuals that qualify for Social Security benefits on your record, your family most often can only be awarded a total of 150% – 180% of your full retirement benefit.
Remember: If your child is working, their benefits will be limited based on their earnings.
Looking for more financial resources?
Here are links to more calculators to help you understand your options:
Retirement Age Calculator
The Retirement Age Calculator helps you to decide when would be the optimal age to retire. Think about the situation you or your family is in and which option works best for you.
Benefits for Spouses Calculator
It’s all in the name. The Benefits for Spouses Calculator will show you what your spouse’s benefit would be based on your Social Security record.
Earnings Test Calculator
The Earnings Test Calculator estimates how your earnings will affect the amount of Social Security retirement benefits you receive.
Online Calculator of Social Security Benefits
The Online Calculator of Social Security Benefits allows you to estimate your approximate Social Security benefit by entering multiple factors.
Early or Late Retirement Calculator
The Early or Late Retirement Calculator is a great way to see how much money you would gain by retiring late versus retiring early or right at 65.
Life Expectancy Calculator
The Life Expectancy Calculator helps you plan how many years you need to budget in order for your Social Security retirement benefit to last you through the end of your life.
Already Applied For Social Security?
Have you applied for Social Security and want to check on the status of your application? Checking the status of your Social Security application is quick and easy.
Already Receiving Social Security Benefits?
Are you already receiving Social Security benefits, yet have questions about a card replacement, changing your address, receiving copies of your verification letter, or any other concern?