Medicare and Social Security make up the tax-paid benefits of post-retirement healthcare coverage and income in the United States. Though distinct programs, they are highly interrelated and Medicare premiums are, in fact, deducted from Social Security payments.
A high-level comparison includes:
Timing
- Initial Medicare enrollment generally occurs in the 6-month period around the 65th birthday. Exceptions include individuals with disabilities or certain illnesses who may receive benefits sooner, as well as those with employer-provided health insurance who may enroll later.
- Social Security eligibility begins at age 66 if you were born from 1943 to 1954, between 66 and 67 for people born from 1955 through 1960 and 67 for everyone born after 1960. You may choose to delay your Social Security retirement up to age 70 for increased monthly benefits.
Benefits/Payments
- Some Medicare benefits, such as coverage amounts and covered events, drugs and/or devices, depend upon the programs you enroll in. Premiums for Part B and Part D will vary based on your income.
- Social Security payments are calculated using the 35 highest-earning years of your career and are adjusted for inflation. Those who don’t work for 35 years have zeros averaged into the Social Security calculation and get smaller payments. As mentioned above, the age of retirement also impacts your monthly benefit.
The choices you make about Medicare and Social Security can truly impact your quality of life in retirement, so it is important to make informed decisions. We encourage you to first educate yourself by reading about the basics (see some reference sources below) and then speak to the experts. For Medicare, contact us when you’re approaching 65 or have a change in healthcare coverage needs. We’ll help you factor in all your personal variables. For Social Security, go to www.ssa.gov or speak to a trusted financial advisor.
Resources:
Retirement Information for Medicare Recipients
Will my Social Security Benefit Decrease if the Medicare Premium Increases?
Social Security Online Benefit Calculators