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Ask Rusty – Should I Claim Early Due to Social Security Financial Status? Should you enroll in Medicare at age 65?

By Special at AFRO

As Financial Literacy Month continues, AFRO wants to pay special attention to the financial health of seniors. In this month’s special edition, we have included two relevant questions on planning and using social security benefits.

In response, we have expert Russell Gloor, who is National Social Security Advisor for the Association of Mature American Citizens Foundation (AMAC Foundation), the nonprofit arm of the Association of Mature American Citizens (AMAC ).

Dear Rusty: I plan to retire at 62, in a year. I have been coached (if financially possible) to leave my social security earnings to my wife to collect in the future if I die, given that she was a homemaker during majority of his earning years. My instinct is to bring in Social Security (I understand I’m settling for a lesser amount at age 62) as soon as possible given the forecast of our government’s inability to fund Social Security for the rest of my life. . No one has a crystal ball and no one knows what our government will or will not be able to fund even next week, so we weigh what we know and see, and then we decide. Is my question clear?



Dear Skeptic,

Your question is clear but contains two opposing factors: you say that you wish to support your wife well if you die, but you also say that you wish to apply at 62 because you are not sure that the security Social (SS) will be there in the future. Still, applying at age 62 will mean the lowest possible survivor benefit for your wife, because her widow’s benefit will be the amount you’ll receive when you die. I will try to put all of this into perspective for you.

Although Social Security faces future financial problems, it will never go bankrupt and be unable to pay benefits. The worst that could happen, if Congress takes no action first, would be that benefits would be reduced by about 22% if the SS Trust Fund were fully depleted by 2033 (currently, the reserves of the trust funds are used to supplement SS expenditures because SS revenues are currently lower than program costs). If this happens, Social Security can only pay what it reports. But that certainly won’t happen, because Congress won’t allow it.

Congress already knows how to solve Social Security’s financial problems – they currently lack the political will and bipartisan spirit to implement the necessary changes. But there is no doubt that they will fix the problem before allowing a general reduction in benefits to more than 65 million recipients (because the elderly vote). For your information, there were $2.9 trillion in reserves in the Social Security Trust Fund at the end of 2020.

I don’t recommend that you base your decision to apply for Social Security on fear that the program will go bankrupt — it won’t. Even if Congress does not act and a benefit reduction is imposed in 2033 (which is highly unlikely), a 22% reduction in your benefit amount at age 62 would be more painful than a 22% reduction. of your benefits at full retirement age (FRA) which would be approximately 30% higher than the amount of your benefits at age 62.

The longer you wait to apply, the higher your benefits and your spouse’s survivor benefit will be, even in the unlikely event of a later reduction in benefits. Instead, I suggest you make your claim decision based on

only on your personal situation. If you want to increase your spouse’s survivor benefit, waiting longer to claim it is the best way to do it. If you retire at age 62, the Social Security earnings test will not apply to you (the earnings test limits how much you can earn while collecting early SS benefits), so you can certainly claim at 62 if you wish. But it’s important to consider the consequences of applying early (including a lower survivor benefit for your widow) and make a decision based on facts, not fear of Social Security bankruptcy – because it won’t.

Ask Rusty – My husband is still working; Should he enroll in Medicare at age 65?

Dear Rusty: There is confusion between my husband and I about when he should file for health insurance. My husband will be 64 in July. Although he plans to continue working until age 67 and continue with his employer’s insurance plan, I believe he needs to file for some portion of the Medicare retirement plan at age 65, or else there will be a penalty at some point in the future after retirement. There is a lot of confusion about this, and I hope you can explain exactly what the process is for applying for Medicare at age 65 and after reaching full retirement age. Please also indicate if maintaining employers’ insurance is an option or if you must file for health insurance at age 65.


Confused about health insurance

Dear confused,

There are two main parts of Medicare to know about for this discussion – Part A, which covers inpatient services, and Part B, which covers outpatient services (doctors, medical tests, etc.).

Health insurance part A

Assuming your husband is eligible to collect Social Security when he turns 65 (he wouldn’t need to collect it, only eligible), there will be no premium associated with Medicare Part A (so no penalty if he is late in claiming it). If his employer’s coverage is “creditable” (i.e. a group plan with at least 20 participants), then he can defer enrollment in Part A until 1) the his employer’s hospitalization ends, or 2) he begins to collect his Social Security benefits (registration in Part A is mandatory for those collecting Social Security after age 65). He may also want to check with his employer’s human resources department if his employer’s plan requires him to enroll in Part A when he turns 65. , any contributions made to his HSA account after the month before he turns 65 will be subject to an IRS penalty and become taxable income.

As retirement approaches, many people wonder when and how to apply for Social Security benefits. (Photo by

Health insurance part B

There is a monthly premium associated with Part B, but if your husband has “creditable” health care coverage from his employer when he turns 65, he can simply defer enrolling in Part B. B until their employer’s coverage ends and there will be no late enrollment penalty for waiting. When his employer’s coverage ends, he will enter an 8-month Medicare Special Enrollment Period (SEP) during which he can enroll in Part B without penalty. But if he does not enroll during (or before) his SEP and enrolls in Part B later, he will be subject to a late enrollment penalty which will increase his Part B premium by 10% for each full year without “creditable” coverage. after 65 years.

For your information, your husband can also sign up for Part B shortly before his employer coverage ends and specify that he wants his Medicare coverage to start on the 1st of the month after his employer coverage ends (to avoid any gaps). cover). When your husband registers for Part B, he must also register for Part A (at no additional cost). Part B premiums may increase each year – the standard Part B premium for 2022 is $170.10 per month.

There is another element of Medicare called “Part D” which covers prescription drugs. Prescription drug costs are not covered by Medicare Parts A/B and such coverage must be purchased separately if desired. When your husband’s prescription drug coverage from his employer ends, he will have to separately purchase (through a private insurer) drug coverage during his MS, or there will be a late enrollment penalty of separate Part D for acquiring drug coverage afterwards.

The bottom line is this: If your husband’s health care coverage through his employer is “honourable,” he can simply defer Medicare enrollment until his employer’s coverage ends, and he doesn’t. there will be no late registration penalty for doing so (unless he waits beyond his SEP to register).

About AMAC and the AMAC Foundation

The 2.4 million members of the Association of Mature American Citizens (AMAC) is a dynamic and vital advocacy organization that takes its marching orders from its members. AMAC Action is a nonpartisan, nonprofit organization that represents members in the nation’s capital and local congressional districts across the country. The AMAC Foundation ( is the Association’s nonprofit organization dedicated to supporting and educating America’s senior citizens.

This article is intended for informational purposes only and does not represent legal or financial advice. It presents the opinions and interpretations of AMAC Foundation staff, trained and accredited by the National Social Security Association (NSSA). The NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other government entity. To submit a question, visit our website ( or email us at [email protected]

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