Optimizing Social Security and Medicare
June 6, 2019
Maximizing your Social Security benefits is typically top of mind for those who are approaching retirement age. However, optimizing is just as important. It’s not always about getting the highest monthly payout; sometimes it’s just as important to think about the longevity of your participation in the program along with your lifespan. In Honkamp Krueger’s webinar, Learn how to gain financial independence, retirement planning consultant, Terry Kane, breaks down the importance of optimizing your Social Security benefit to meet your goals and the critical components of the Medicare program.
Kane discusses the history of the Social Security program, the average lifespan of Americans today, and how/when you become eligible. Understanding the program and how it relates to your life in this way can help you to determine what makes the most sense for your unique situation. Your age, marriage status and more can all affect your Social Security benefit.
Kane cautions that, “If you draw early before full retirement age (FRA), you must watch your earned wages… If you earn more than the annual maximum, the Social Security Administration will hold some of your benefits.” This applies to W-2s, self-employed and schedule F for farmers, etc. Furthermore, if you take a survivor’s benefit before your FRA, you are also subject to the earnings limit.
Social Security is not just about retirement; benefits for death and disability each have strict caveats. Kane outlines the requirements including length of the medical condition for disability, required work credits, eligibility criteria, age, etc.
“About 70% of enrollees take their benefit early,” which drastically reduces the payout, Kane explains. However, he adds, “Some will take the benefit out at age 62 to create a family asset if they don’t really need the funds.” Conversely, if someone waits until age 70 to draw but passes early, Kane discusses the need for a strategy to protect those lost benefits, such as life insurance.
Social Security and Medicare go hand-in-hand, and Kane breaks down the differences between Parts A-D, the eligibility requirements that go with each, and the importance of Medicare supplement plans. “As we know, Medicare doesn’t pay for everything. So, it’s important to consider a supplement plan,” Kane points out. He stresses that it’s important to consider the providers in your area that take supplement plans, the coverage area, out-of-coverage area, and that you must be covered by Parts A and B. And don’t forget to sign up on time for Part D to avoid penalties.
Before you’re eligible for Medicare, it’s important to stay covered, and Kane discusses the ways you can get coverage either through COBRA, the marketplace or other avenues.
Overall, it’s important to remember that retirement planning is a lifelong event, Kane says, and HK can help develop a plan keeping Social Security/Medicare in mind that makes sense for you.
To get more details on optimizing your Social Security and Medicare experience, watch the webinar: https://register.gotowebinar.com/recording/7824889301583155459