Q & A

Ask Rusty – I Need Guidance on Social Security and Medicare

Dear Rusty: I am turning 67 in October and as of today am still employed full time. I really do not plan on retiring unless I am forced to. But how do I arrange my Social Security and Medical care stuff. It seems this subject is like a color, and everyone has a different color they like. Is there any way for me to figure this out with help or on my own? I could really use some guidance. Signed: Perplexed

Dear Perplexed: Okay, let’s look at your Social Security and your Medicare separately, because they’re two totally independent programs.

You do not need to do anything about Social Security until you are ready to start collecting your benefits. Since you have already reached your full retirement age (FRA) of 66, you are now earning Delayed Retirement Credits (DRCs) at the rate of .667% per month. That means that your benefit in October, if you were to claim it then, would be 8% more than it would have been at age 66. If you continue to delay applying for SS benefits, you will continue to earn those DRCs up to age 70, when your benefit amount would be 32% more than it would have been at your FRA. The choice of when to claim your Social Security is yours to make, considering your need for the money, your health, and your expected longevity. The longer you wait (up to 70) the more your benefit will be, and if you expect at least average longevity (about 84 for a man your current age) then you’ll get both a higher benefit amount and more in cumulative lifetime benefits by waiting to claim your Social Security.

As for Medicare, if you are now covered by your employer’s “creditable” healthcare plan, you can delay enrolling in Medicare until your current employer coverage ends (when you stop working). “Creditable” is a group plan with more than 20 participants. If you now have “creditable” employer healthcare coverage (including drug coverage) you won’t be liable for a Late Enrollment Penalty for enrolling in Medicare (or a drug plan) later. If you are still working and know your creditable employer coverage will end soon, you can enroll for Medicare benefits to start coincident with the end of your employer coverage. Or, after you stop working, you can enroll in Medicare during a “Special Enrollment Period” (or “SEP” for those transitioning from employer coverage to Medicare coverage). Your SEP for Medicare will last for 8 months after you stop working, but you only have 63 days after the end of your employer drug coverage to enroll in a Part D prescription drug plan.

The bottom line is this – you don’t need to enroll in Medicare until your creditable employer healthcare coverage ends. And you don’t need to apply for Social Security until you wish to start receiving benefits (just don’t wait beyond 70).

One final point because you were born in 1953: if you are now married and your wife is already collecting her SS, you can file a “restricted application for spouse benefits only” and collect only a spouse benefit from your wife, while still allowing your own benefit to continue to grow until you are 70. But this option is only available to you because you were born before January 2, 1954.

This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (amacfoundation.org/programs/social-security-advisory) or email us at ssadvisor@amacfoundation.org.

Comments On This Topic

  1. Hi Rusty,
    I am 55 years old and have numerous health conditions/disease. I am still working, however, it is getting harder each new day to continue at full speed. I have been told that in order to file for Disability I would have to become unemployed for a whole year before they will even look at my case. Is this true? How do they expect folks to survive w/out income for a year? Or Do I make an appointment and go in the SSA and apply w/out representation of a legal professional as some folks have done and been awarded benefits? Also, does a spouses income play a part into how much your benefits are that you get awarded? is there back pay? I was directed to apply in 2005 after a very long stay in the hospital and a near death event, I did and was denied, would there be any back pay from the original date I applied? I appreciate your guidance in understanding how this all works. God Bless you for helping all of us nearing retirement or trying to prepare for retirement in our future.

    • Barbara,
      You do not need to be unemployed for a year before applying for Social Security Disability Insurance (SSDI), but you must be considered totally disabled, unable to work, and expected to remain so for at least a year. And that must be substantiated by your medical service providers for you to be successful applying for SSDI benefits. You can apply for SSDI benefit online by going to this website: http://www.ssa.gov/disability. Here you will find complete instructions as well as a link to complete the online application. You do not need an attorney to apply, but may wish to engage one later if your application is denied (as it was once before). Just be sure to engage an attorney who specializes in SSDI, because their fees are limited by Federal law to a percentage (25%) of anything they can recover for you in back benefits, or a maximum of $6000, whichever is less. It should not cost you anything for an initial consultation (find an SSDI attorney by doing a search for “SSDI attorneys near me”), and you can usually assess the strength of your application based upon whether an SSDI attorney will accept your case.
      SSDI is a worker’s benefit (not a dependent benefit) so your spouse’s income does not come into play when your SSDI application is evaluated. As for back pay, Social Security will determine if that is appropriate if you are awarded SSDI and they determine a “disability onset date” which is prior to your application, in which case they will pay benefits back to that date. But SS is the sole decision-maker for that. Be aware that, even if approved, SSDI does not pay benefits until 5 months after SSDI benefits are awarded.
      Be aware too that it takes several months for an initial determination by SS, and about 60% of all initial applications are denied. There is, however, a multiple-level appeal process which you should use if your application is initially denied and you believe that is an unfair decision. That would be the appropriate time to engage an SSDI attorney.
      Barbara, if you have any further questions about SSDI or your Social Security options in general, please contact us via email at SSAdvisor@amacfoundation.org, or by phone at 1.888.750.2622.
      Russell Gloor
      National Social Security Advisor
      The AMAC Foundation

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