Ask Rusty – Should I claim early due to Social Security’s financial situation? Do you need to sign up for Medicare at age 65?
Ask Rusty – Should I claim early due to Social Security’s financial situation?  Do you need to sign up for Medicare at age 65?

Ask Rusty – Should I claim early due to Social Security’s financial situation? Do you need to sign up for Medicare at age 65?

By Special for AFRO

As Financial Literacy Month continues, AFRO would like to place special emphasis on the financial health of senior citizens. In this month’s special edition, we have included two relevant issues regarding the planning and use of social benefits.

In response, we have expert Russell Gloor, who serves as the National Social Security Adviser for the Association of Mature American Citizens Foundation (AMAC Foundation), the non-profit arm of the Association of Mature American Citizens (AMAC).

Dear Rusty: I plan to retire at age 62, a year from now. I have been coached to (if financially possible) leave my social security earnings to my wife to collect in the future if I die, given that she was a homemaker for most of her income years. My instinct is to get social security to come (I understand that I settle for a small amount at the age of 62) as soon as possible given the prognosis of our government’s inability to fund social security for the rest of my life. life. No one has a crystal ball, and no one knows what our government will or will not be able to fund itself next week, so we weigh what we know and see and then decide. Is my question clear?



Dear skeptical,

Your question is clear, but contains two opposing factors – you say you want to support your wife if you die, but also say you want to make claims at age 62 because you are not sure that Social Security (SS) will be there in the future. Still, claims at age 62 will mean the lowest possible survivor benefit for your wife because her benefit as your widow will be the amount you receive at your death. I will try to put all this in perspective for you.

Although Social Security faces some future financial problems, it will never go bankrupt and be unable to pay benefits. The worst that could happen if Congress does nothing in advance would be that benefits would be cut by about 22 percent if the SS Trust Fund is completely depleted in 2033 (right now reserves in the Trust Fund are being used to supplement SS expenses because SS revenues are currently less than program costs). If that happens, Social Security can only pay out as much as it brings in. But it will almost certainly not happen because Congress will not allow it.

Congress already knows how to solve the economic problems of social problems – they currently lack the political will and bipartisan spirit to implement the necessary changes. But there is little doubt that they will solve the problem before allowing a general benefit cut to over 65 million recipients (because seniors are voting). For your information, there were $ 2.9 trillion in reserves in the Social Security Trust Fund at the end of 2020.

I do not recommend that you make your claim for social security based on fear that the program will go bankrupt – it will not. Even if Congress does not act and a benefit reduction is imposed in 2033 (which is highly unlikely), a 22 percent reduction to your 62-year benefit amount would be more painful than a 22 percent cut in your favor at your full retirement age (FRA). , which would be about 30 percent higher than your 62-year benefit amount.

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

only on your personal relationships. If you want to increase your wife’s survivor benefit, then waiting longer to apply is the way to do it. If you retire from work at age 62, Social Security’s earnings test will not apply to you (the earnings test limits how much you can earn while charging early SS benefits), so you can definitely claim 62 , if you want it. But it is important to consider the consequences of claiming early (including a lower survivor benefit for your widow) and making a decision based on facts, not fear of Social Security going bankrupt – because it will not.

Ask Rusty – My husband is still working; Should he sign up for Medicare at age 65?

Dear Rusty: There is confusion between my husband and me about when to seek Medicare. My husband will be 64 by July. Although he plans to continue working until age 67 and continue with his employer’s insurance plan, I think there is a requirement that he apply for a certain portion of the Medicare pension plan at age 65, otherwise there is a show punishment at some point in the future after retirement. There is a lot of confusion with this and I hope you can explain exactly what the process is when applying for Medicare at the age of 65 and after reaching full retirement age. Also comment on whether it is an option to continue with employer insurance or whether you should apply for Medicare at the age of 65.


Confused about Medicare

Dear confused,

There are two main parts of Medicare that one should be aware of in this discussion – Part A, which is coverage for hospitalization services, and Part B-, which is coverage for outpatient services (doctors, medical tests, etc.).

Medicare del A

If you assume that your husband is eligible for Social Security when he or she turns 65 (he or she does not have to collect it, only eligible for it), there will be no premium associated with Medicare Part A (hence no penalty if he delays in demanding it). If his employer coverage is “credible” (which is a group plan with at least 20 participants), then he may defer enrollment to Part A until 1) his employer’s hospitalization coverage ceases, or 2) he begins to collect his social benefits (enrollment). in Part A is mandatory for those who charge social security after the age of 65). He may also want to check with his employer’s HR department to see if his employer plan requires him to enroll in Part A when he turns 65. But if your husband enrolls in Part A and has a health savings account (HSA) through his employer, any contribution made to his HSA account after the month before he is 65 will be subject to an IRS fine and become taxable income.

As retirement approaches, many people have questions about when and how to apply for social benefits. (Photo by

Medicare part B

There is a monthly premium associated with Part B, but if your husband has a “creditworthy” health coverage from his employer when he turns 65, he can simply defer enrollment to Part B until his employer coverage ceases and there will be no penalty for late enrollment for waiting. When his employer coverage ends, he will enter an 8 month Medicare Special Enrollment Period (SEP) where he can sign up for Part B without penalty. However, 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 would increase his Part B premium by 10 percent for each full year without “credible” coverage. after 65 years.

For your information, your husband may also sign up for Part B shortly before his employer coverage ends, stating that he wants his Medicare coverage to start on the 1st of the month following the expiration of his employer coverage (to avoid any gap in coverage). When your husband signs up for Part B, he must also sign up for Part A (at no extra cost). Part B premiums may increase annually – the standard 2022 Part B premium is $ 170.10 per share. month.

There’s another Medicare item called “Part D,” which is coverage for prescription drugs. Expenses for prescription drugs are not covered by Medicare Parts A / B, and such coverage must be acquired separately if desired. When your husband’s prescription drug coverage from his employer plan expires, he must separately (through a private insurance company) acquire drug coverage during his SEP, or there will be a separate Part D late registration penalty to acquire drug coverage thereafter.

The bottom line is this: If your husband’s health coverage from his employer is “creditworthy”, he can simply defer enrollment with Medicare until his employer coverage expires and there will be no penalty for late enrollment for doing so (unless he waits for its SEP to enroll).

About AMAC and the AMAC Foundation

Association of Mature American Citizens (AMAC) with 2.4 million members is a vibrant, vital senior advocacy organization that takes its marching orders from its members. AMAC Action is a non-profit, non-partisan organization representing membership in our country’s capital and in local congressional districts throughout the country. AMAC Foundation ( is the association’s non-profit organization, dedicated to supporting and educating America’s seniors.

This article is for informational purposes only and does not represent legal or financial guidance. It presents statements and interpretations from AMAC Foundation 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 ask a question, visit our website ( or email us at [email protected]

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