Monday, May 16, 2022

When To Enroll In Social Security

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Ensuring Your Benefits Don’t Become A Burden: Medicare Part A Social Security & Health Savings Accounts

How to Enroll in Social Security and Medicare

Why employed Americans with an HSA need to pay attention to Medicare and Social Security enrollment.

Kevin Robertson

Throughout the decades, American workers have come to rely on an ecosystem of public and private benefits that, for the most part, came together piece by piece. And while policymakers have tried their best to make these different moving parts work together seamlessly, sometimes these benefits clash in an unintended way that creates a financial burden to unaware participants. The confluence of Medicare Part A, Social Security, and Health Savings Accounts is an example of this.

More than 10,000 Americans per day turn age 65, and the vast majority of these people will enroll in Medicare. Many of these people are currently contributing to HSAs, and if not careful, hundreds of thousands of these Americans that age into Medicare each year could potentially be paying fees and penalties to the government because of the interaction of these benefits.

D You Can Stop Working And Not Begin Receiving Your Retirement Benefits

We calculate your benefits based on your highest 35 years of earnings. If you stop working before you have 35 years of earnings, or you have low earnings for some years, this will affect your benefit calculation. However, if you wait to start benefits after you reach full retirement age, your benefits will increase for each month you do not receive them until you reach age 70. There is no incentive to delay filing for your benefits after age 70.

If you are not receiving your Social Security benefits when you turn 65, you will need to apply for Original Medicare three months before you turn 65. If you dont sign up for Medicare Part B when youre first eligible at age 65, you may have to pay a late enrollment penalty for as long as you have Medicare coverage.

There are two primary ways to receive your Social Security benefit checks:

  • Direct deposit to your bank account, or
  • Direct Express debit card. In 2013, the Social Security Administration stopped mailing out benefit checks in order to reduce expenses.
  • To set up a direct deposit you have three options:

    • Configure through My profile tab in your online Social Security account
    • Ask your bank to do it

    If you choose to receive through a Direct Express debit card, your benefits will be placed directly onto the card. From there, you can withdraw cash, make purchases or pay bills. To sign up, call Direct Express at 800-333-1795.

    I Am Turning 65 In A Few Months And Want To Go On Medicare Will I Be Automatically Enrolled In Parts A And B Or Do I Need To Sign Up

    It depends. If youre receiving benefits from Social Security or the Railroad Retirement Board at least four months before you turn 65, you do NOT need to sign up youll automatically get Part A and Part B starting the first day of the month that you turn 65. You should receive your Medicare card in the mail three months before your 65th birthday. If you are NOT receiving benefits from Social Security or the RRB at least four months before you turn 65, you will need to sign up with Social Security to get Parts A and B. To sign up to receive Parts A and B, you can enroll online with Social Security, call Social Security at 1-800-772-1213, or visit your local Social Security office.

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    How Long Does It Take To Sign Up

    That depends on the method you choose. It can take as little as 10 minutes to sign up online, a month or more by phone or, if you prefer to sign up in person, it will depend on how long it takes to get an appointment.

    • Medicaid number, if applicable, with start and end dates.
    • Start and end dates for group health insurance through your employer.
    • Start and end dates of employment with the employer providing your group health plan.

    Once your account is set up, you can start the Medicare application process here. Its unlikely that youll need to sign anything physically.

    When youre finished applying online, youll get a confirmation number. Keep it handy and use it to check the status of your application through your My Social Security account. Social Security will let you know if more information is needed.4

    If You’re Not Sure Why You Received A Payment

    2014 Social Security &  Medicare Trustees Report

    Contact the authorizing agency directly to find out why they sent the payment. You may be able to find the authorizing agency in the memo line of the check. View this diagram of a sample Treasury check to help you locate the authorizing agency contact information on your own check. Scroll about half way down the page to see the diagram.

    If you’re unable to find which agency authorized the payment, . They can help you determine which government agency you need to contact. To find which RFC you need to call, look for its city and state at the top center of the check.

    Use the Treasury Check Verification System to verify that the check is legitmate and issued by the government.

    Read Also: How To Get Social Security Money

    How To Apply For Social Security

    If you’re approaching retirement age, you may have some idea of when you’d like to start receiving Social Security benefits. However, you may not know how the application process works or when you need to apply in order to start receiving benefits at a specific time. Here’s what you need to know about how to apply for Social Security, what information you’ll need to gather, and when to fill out the application.

    Three ways to applyWhen it comes time to apply for Social Security retirement benefits, you have three options. You can use the Social Security Administration’s online application process, which should take no more than 30 minutes as long as you’ve gathered all of the required information and documentation .

    You can also choose to apply by phone, or at your local Social Security office if you’d rather have someone there to assist with the process. Whichever method you feel most comfortable using, your application will be reviewed and processed as soon as all necessary documentation and information is received. And, the Social Security Administration will notify you if it turns out you could qualify for higher benefits on your spouse’s record, or if other family members can receive benefits on your work record.

    Bear in mind that Social Security benefits are paid in the month after they are due. So, if you start your benefits on your 62nd birthday, you won’t start receiving payments until the following month.

    • Your date and place of birth
    • Your Social Security number

    When Should You Retire

    To draw full retirement benefits, the following Social Security Administration age rules apply:

    Born in 1937 or earlier – Full retirement can be drawn at age 65Born in 1938 – Full retirement can be drawn at age 65 years and 2 monthsBorn in 1939 — Full retirement can be drawn at age 65 years and 4 monthsBorn in 1940 — Full retirement can be drawn at age 65 years and 6 monthsBorn in 1941 — Full retirement can be drawn at age 65 years and 8 monthsBorn in 1942 — Full retirement can be drawn at age 65 years and 10 monthsBorn in 1943-1954 — Full retirement can be drawn at age 66Born in 1955 – Full retirement can be drawn at age 66 and 2 monthsBorn in 1956 — Full retirement can be drawn at age 66 and 4 monthsBorn in 1957 — Full retirement can be drawn at age 66 and 6 monthsBorn in 1958 — Full retirement can be drawn at age 66 and 8 monthsBorn in 1959 — Full retirement can be drawn at age 66 and 10 monthsBorn in 1960 or later — Full retirement can be drawn at age 67

    Remember that while you can begin drawing Social Security retirement benefits at age 62, your benefits will be 25 percent less than what they will be if you wait until your full retirement age as shown above. Also keep in mind that no matter when you start drawing Social Security benefits, you must be 65 to be eligible for Medicare.

    For example, people who waited until age 70 to retire in 2017 could get a maximum benefit of $3,538.

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    Theres An Annual Social Security Cost

    One of the most attractive features of Social Security benefits is that every year the government adjusts the benefit for inflation. Known as a cost-of-living adjustment, or COLA, this inflation protection can help you keep up with rising living expenses during retirement. The Social Security COLA is quite valuable its the equivalent of buying inflation protection on a private annuity, which can cost a pretty penny.

    Because the COLA is calculated based on changes in a federal consumer price index, the size of the COLA depends largely on broad inflation levels determined by the government. In 2021, Social Security beneficiaries will see a 1.3% COLA in their monthly Social Security benefits.

    The Kiplinger Letter forecast in March that the 2022 COLA would be 3%, which would be the largest increase since 2012 when Social Security benefits ticked up 3.6%.

    Heres what COLAs have been in other recent years:

    • 2009: 5.8%

    How To Get A Social Security Card

    School enrollment FAQ: Social Security numbers
  • Gather your documents. Learn what documents you’ll need to get a card. Select your situation:
  • Adult or child
  • Original, replacement, or corrected card
  • U.S. born citizen, foreign born U.S. citizen, or noncitizen
  • Apply online for a replacement card. Apply online if youre not changing anything on your card and you are eligible. This option is available in most states. You will need to make a my Social Security account first. Or complete an application. If you can not apply online, fill out an application and return it to the SSA. Find out where to take it in person or mail it.
  • Read Also: Claim Social Security Benefits

    How Do You Apply By Phone

    Call 772-1213 or TTY 325-0778 between 7 a.m. and 7 p.m. from Monday through Friday.5 Keep in mind that this process takes longer because forms have to be mailed to you, which you then complete and send back. At peak times, applying for Medicare by phone could take a month or more.

    If you worked at a railroad, you can enroll in Medicare by calling the Railroad Retirement Board at 772-5772 or TTY 751-4701, 9AM 3:30PM, Monday Friday.

    How Much Can You Expect To Get

    Your Social Security retirement benefit payment is based on how much you made during your working years. The more you earned, the more you’ll get when you retire.

    Your Social Security retirement benefit payment is also affected by the age at which you decide to retire. You can retire as early as age 62, but if you retire before your full retirement age, your benefits will be permanently reduced, based on your age. For example, if you retire at age 62, your benefit would be about 25 percent lower than what it would be if you waited until you reach full retirement age.

    You also need to remember that monthly premiums for Medicare Part B are usually deducted from monthly Social Security benefits. Retirement is a great time to look into the pros and cons of a private Medicare Advantage plan.

    Retirement benefits are based on the recipients lifetime earnings in work in which they paid Social Security taxes. Higher income translates to a bigger benefit, up to a point. The amount to which retirees are entitled is modified by other factors, most crucially the age at which they first claim benefits.

    For reference, the estimated average Social Security retirement benefit in 2021 is $1,543 a month. The maximum benefitthe most an individual retiree can getis $3,148 a month for someone who files for Social Security in 2021 at their full retirement age.

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    Other Ways To Sign Up For Direct Deposit

    EI applicants

    Canada Pension Plan and Old Age Security applicants

    • From outside Canada and the United States, call 613-957-1954. Collect calls are accepted Monday to Friday, 8:30 a.m. to 4:30 p.m. Eastern time.
    • To sign up for direct deposit by phone, we usually have to speak directly to you. If someone calls on your behalf, make sure you are with them when they call. Keep in mind that we have to have trusteeship or power-of-attorney forms on file before we can take the call from your legal trustee or someone with power of attorney

    Complete and print a Direct Deposit Enrolment Request Form. This form is also available at Canadian banks and financial institutions.

    Mail your completed form to:

    Direct Deposit Matane, QC G4W 4R6 CANADA

    Canada Pension Plan and Old Age Security applicants living abroad or having a foreign bank account

    If you live outside Canada or have a foreign bank account, you can apply by phone or by mail.

    • From outside Canada and the United States call 613-957-1954. Collect calls are accepted Monday to Friday, 8:30 a.m. to 4:30 p.m. Eastern time.
    • To sign up for direct deposit by phone, we usually have to speak directly to you. If someone calls on your behalf, make sure you are with them when they call. Keep in mind that we have to have trusteeship or power-of-attorney forms on file before we can take the call from your legal trustee or someone with power of attorney

    International Direct Deposit Matane, QC G4W 4T5 CANADA

    Processing time

    What You Need Before You Sign Up

    Medicare Enrollment Maze Puts Seniors at Risk for ...

    To sign up for direct deposit, you will need to gather the following personal information:

    • the name of your bank or financial institution
    • the branch/transit number and
    • your account number

    Your banking information can be found at the bottom of any cheque for the account in which you would like to have your payment deposited.

    If you do not have a chequing account you can ask your financial institution for this information.

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    Timing And Your Health Coverage

    Your health insurance coverage can also play a role in deciding when to claim Social Security benefits. Do you have a health savings account to which you would like to keep contributing? If so, note that if youre age 65 or older, then receiving Social Security benefits requires you to sign up for Medicare Part A, and once you sign up for Medicare Part A, youll no longer be allowed to add funds to your HSA.

    The SSA also cautions that even if you delay receiving Social Security benefits until after age 65, you might still need to apply for Medicare benefits within three months of turning 65 to avoid paying higher premiums for life for Medicare Part B and Part D. If you are still receiving health insurance from your or your spouses employer, however, then you might not yet have to enroll in Medicare.

    On March 17, 2020, all Social Security offices were closed completely due to the COVID-19 pandemic. As of Aug. 5, 2021, they are only open by appointment, and to get an appointment, you need to be in a limited, critical situation. Most people will have to transact their business online, by phone, or through the mail.

    How Should I Decide When To Take Benefits

    Consider the following factors as you decide when to take Social Security.

    Your cash needs: If youre contemplating early retirement and you have sufficient resources , you can be flexible about when to take Social Security benefits.

    If youll need your Social Security benefits to make ends meet, you may have fewer options. If possible, you may want to consider postponing retirement or work part-time until you reach your full retirement ageor even longer so that you can maximize your benefits.

    Your life expectancy and break-even age: Taking Social Security early reduces your benefits, but youll also receive monthly checks for a longer period of time. On the other hand, taking Social Security later results in fewer checks during your lifetime, but the credit for waiting means each check will be larger.

    At what age will you break even and begin to come out ahead if you delay Social Security? The break-even age depends on the amount of your benefits and the assumptions you use to account for taxes and the opportunity cost of waiting . The SSA has several handy calculators you can use to estimate your own benefits.

    If you think youll beat the average life expectancy, then waiting for a larger monthly check might be a good deal. On the other hand, if youre in poor health or have reason to believe you wont beat the average life expectancy, you might decide to take what you can while you can.

    A quick note about life expectancy

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    What Will Happen To My Medicare Premiums If I Enroll In Medicare Before Social Security

    If youre already at least 65 and you havent yet enrolled in Medicare when you activate your Social Security benefits, youll automatically be enrolled in Medicare Part A at that point.

    Medicare Part A is premium-free in most cases. But your Part A coverage will be backdated by up to six months. Medicare Part A will disqualify Health Savings Account contributions for the part of the tax year you have Part A , so plan any contributions accordingly including contributions your employer makes.

    You will not automatically be enrolled in Part B if your initial seven-month enrollment window for Medicare has already ended. Youll have an opportunity to enroll in Part B during the general enrollment period, which runs from January 1 through March 31 each year, with coverage effective in July. And you may owe a late enrollment penalty for Part B once you enroll.

    If youre still working when you turn 65 and covered under your employers health plan, youll likely still enroll in at least Medicare Part A, which is premium-free for most people. If your employer-sponsored plan is considered primary coverage , you can probably delay your enrollment in Part B, and just have premium-free Medicare Part A. But if your employer is small enough that the coverage they offer will be secondary to Medicare, youll likely need to enroll in both Part A and Part B.

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