Medicare typically kicks in at age 65, a milestone that often coincides with a key question for many retirees: Should you begin claiming Social Security at the same time?
While both Medicare and Social Security are critical aspects of retirement, they differ in important ways, especially when it comes to when and how you can start receiving benefits.
Medicare vs. Social Security: Different Start Dates
For most people, Medicare begins at 65. However, Social Security offers more flexibility. You can begin claiming benefits as early as age 62, but your Full Retirement Age (FRA), if you were born in 1960 or later, is 67.
Claiming Social Security before your FRA results in a permanent reduction in monthly payments. If you claim at 65, your benefit is reduced by approximately 13.3% compared to waiting until 67. For many retirees, this reduction can feel like a significant pay cut for the rest of their lives.
Why Claiming Social Security at 65 May Not Be Ideal
While it may seem convenient to start both Medicare and Social Security at 65, doing so can lock in a lower benefit amount.
If Social Security is an important source of retirement income, taking a reduced benefit at 65 can limit your financial flexibility later. Even if you’ve saved for retirement, the lower monthly payment could impact your long-term plans.
Medicare Doesn’t Require Social Security: How to Keep Them Separate
It’s a common misconception that you need to claim Social Security to get Medicare. This is not true. You can enroll in Medicare at 65 and pay your premiums directly (or have them deducted from your bank account) without applying for Social Security benefits.
If you do claim Social Security, your Medicare Part B premiums will automatically be deducted from your monthly payments, but this is not a requirement for enrolling in Medicare.
Delaying Social Security: A Strategy to Boost Your Benefit
Delaying your Social Security benefits past your FRA can significantly increase your monthly payment. For every year you wait, your benefit grows by about 8%, up until age 70. This increase is permanent, and it can result in a much higher check over the long term, especially if you live into your 80s or 90s.
Some retirees choose to use savings or part-time work as a “bridge” between Medicare enrollment and waiting to claim Social Security, allowing their benefits to grow. Financial advisors often recommend this strategy, especially for healthy individuals with longer-than-average life expectancies.
Social Security’s Future and the Benefits of Waiting
If you’re concerned about the future of Social Security, with the trust fund reserves projected to run out around 2033, delaying your claim still holds advantages.
Even if future changes are made to the system, waiting to claim Social Security ensures that you start with the highest possible benefit, which can still be valuable even under potential reforms.
Keep Medicare and Social Security Separate
While Medicare and Social Security often go hand-in-hand at 65, they are distinct programs with different rules and strategies. You don’t have to start Social Security just because you sign up for Medicare.
If you can cover your expenses without Social Security for a few more years, delaying your claim could result in a larger monthly payment and greater peace of mind for your retirement.
