The regulations governing Social Security and Medicare may seem similar because of their interdependence. This isn’t true, though.
As early as age 62, you are eligible to begin collecting Social Security benefits. Alternatively, Medicare requires proof of age 65 before any benefits can be obtained. Although it’s not mandatory to register in Medicare at age 65, there are situations when not doing so could result in lifetime penalties on your Part B costs.
The Part B premiums for seniors who are simultaneously registered in Social Security and Medicare are deducted straight from their monthly benefits. Consequently, you could be more likely to enroll in Social Security than Medicare for that reason.
But from a financial perspective, this might not be the best course of action.
Never give up convenience for money
The concept of having your Part B payments paid immediately when you enroll in Medicare may appeal to you if you are on Social Security at that time. However, even though it could be a practical way to pay the premiums, you would lose out on monthly Social Security income for what you earn in that area.
Until you reach full retirement age (FRA), you are not eligible for your entire monthly Social Security benefit according to your individual earning history. Furthermore, based on the year of your birth, FRA can be between 66, 67, or anywhere in between.
Your monthly payments will be reduced if you file for Social Security before you reach full retirement age (FRA); the exact amount of the decrease will depend on when you file. However, to put things in perspective, your monthly payments could be reduced by 30% if you enroll in Social Security at age 62 with an FRA of 67.
For this reason, you might want to postpone applying for Social Security after you’ve qualified in Medicare. You won’t attain FRA before the time you’re eligible to enroll in Medicare, regardless of the year of your birth.
Moreover, Social Security permits you to postpone filing past FRA. Additionally, your benefits increase by an amazing 8% for every year you work past the age of 70.