Fact is, many seniors continue to work after the so-called “normal retirement age” of 65. Age 65 is often considered “retirement age” because that was once (no longer) when 100% of Social Security became available, and it is still – even today – the age at which Medicare benefits become available to most seniors. So, if age 65 is the normal age for availability of Medicare benefits, why must one continue to pay into Medicare from their paycheck after that age? Many senior choose to continue working well beyond age 65, and Medicare premiums are automatically deducted from everyone’s paycheck.
It may seem logical that paying into Medicare should stop when one is enrolled in the program, even if they continues to work, but that isn’t how the program works.. First, the Medicare premium each worker must pay is only for hospitalization coverage, not for outpatient healthcare services which is what Medicare Part B covers. So that means that outpatient Medicare Part B coverage is funded in some other manner. To fully understand what the “Medicare premium” deducted from each workers paycheck is for, and why it’s necessary to continue paying a premium for Medicare Part B while you are working, click on this Encore edition of Ask Rusty: Or to listen to the Encore article by clicking on this link.
Dear Rusty, I am in my last stretch , 4 more months until FRA 66.8mo Nov 2024. It’s time to decide if i will start my retirement or hold off and work. The decision of when i retire depends on my benefit amount. 1. Is my SS estimated benefits based off total life earnings retirement age of 62, if my W2 earning / income remains the same until FRA of 66.8mo?
2. My W2 earnings increased very significantly after my age of 62 until now, present time, will those higher earnings increase the estimated FRA amounts on the SS.gov web site?
3. Assuming my benefit is higher then the estimations, how do i get a more accurate estimation if my FRA , or workin longer benefits? This information would be very helpful in making my decision on the time of my retirement.
Thank you for your time to help me and all your SS Matters Info.
Arthur
You become eligible for 100% of your Social Security benefit at your FRA of 66 & 8 months. It is based on your highest 35 years of earnings. Your earnings through age 59 have been adjusted for inflation, meaning they are worth more now than you earned them. These adjustments are not shown on your earnings report. If your current earnings are your highest, they have increased your Social Security benefit. In November, you will no longer be subject to an earnings limit, so if you want to continue to work you can also collect your Social Security benefits at the same time. If you continue to work beyond your FRA their benefits are recalculated every year to determine if their benefit is due an increase. As it is only 1/35 of your benefit, it is usually not a very high increase.
If you decide to continue working, you also have the option to delay taking your Social Security benefits until age 70. If you do so, and they are increasing due to your wages, you will also earn delayed retirement credits (DRCs). DRCs grow at the rate of 2/3 of 1% per month for a total of 8% per year. As your FRA is 66 & 8 months, your benefit would increase another 26.67%.
Please use your earnings statement and the following calculator to run an estimate of your benefit if you continue to work: https://www.ssa.gov/benefits/retirement/planner/AnypiaApplet.html
You may contact us by emailing [email protected] or calling (888)750-2622.
Sharon Kleczka, Social Security Advisor