We frequently receive questions on Medicare and Social Security. Here are five of the most common questions with our answers.
When Should I Sign Up for Medicare?
If you’re not already receiving benefits, you should contact the Medicare office about three months before your 65th birthday. You need to sign-up for Medicare even if you don’t plan on retiring at age 65 to avoid a late enrollment penalty.
Here is the contact information:
Toll-free number: 1-800-633-4227
When Should I Start Taking My Social Security Benefits?
The short answer is it depends on your situation. You can start taking Social Security (assuming you’re worked the required number of years), as early as age 62. You can also wait until age 70 and for every year past your full retirement age (FRA) you wait to start taking benefit, your Social Security benefit increases by 8%. This incentive to wait ends at age 70. Here’s a key point to keep in mind: if you start taking your Social Security benefit before your full retirement age, the benefit is reduced. For example, if you turn age 62 in 2021, your benefit would be about 29.2% lower than it would be at your full retirement age of 66 and 10 months.
If you haven’t done so already, go to the Social Security website and register for a my Social Security account.
What Is the Monthly Premium for Medicare Part B?
In 2021, the standard Medicare Part B premium is $148.50 per months. Since 2007, Medicare Part B premiums are higher if your income is higher. For example, if you file a joint tax return and your yearly income is between $138,000 and $165,000, your Medicare Part B premium is $386.10/month. You can learn more at this LINK.
What Social Security Benefits Will My Spouse Receive?
Again, it depends on your personal facts and circumstances. For example, if your spouse never worked or had low earnings, she/he can receive up to one-half of your full benefits. If you were born before January 2, 1954, special rules apply. There are also special rules for former spouses, spouses younger than age 62 if they are taking care of a child younger than age 16 or is disabled. Make sure you contact the Social Security Administration office to obtain information about spouse’s benefits.
Toll free number: 1-800-772-1213
Will Social Security Be Around When I Retire?
A variation on this question is “Will Social Security run out of money?” Here is an answer from the AARP website:
“As long as workers and employers pay payroll taxes, Social Security will not run out of money. It’s a pay-as-you-go system: Revenue coming in from FICA (Federal Insurance Contributions Act) and SECA (Self-Employed Contributions Act) taxes largely cover the benefits going out.
Social Security does face funding challenges. For decades it collected more than it paid out, building a surplus of $2.9 trillion by the end of 2019. But the system is starting to pay out more than it takes in, largely because the retiree population is growing faster than the working population and living longer. Without changes in how Social Security is financed, the surplus is projected to run out in 2035.
Even then, Social Security won’t be broke. It will still collect tax revenue and pay benefits. But it will only have enough to pay 79 percent of scheduled benefits, according to the latest estimate. To avoid that outcome, Congress would need to take steps to shore up Social Security’s finances, as it did in 1983, the last time the program nearly depleted its reserves. The steps then included raising the full retirement age, increasing the payroll tax rate, and introducing an income tax on benefits.”
If you want to read more about Social Security myths from the perspective of AARP, follow this LINK.