Can Working Past 65 Affect Your Medicare Premiums?

August 27, 2021

Fresno Financial Consultant News

More than half of Americans age 40 and up expect to continue doing paid work after retirement, according to TD Ameritrade. This includes 86% of people in their 50s, while a remarkable 92% of people in their 40s expect to keep working after dialing back their main career. If you plan to work into your retirement years, financial advisors say there are a few factors to keep in mind.

Hold off Drawing Social Security

Drawing Social Security earlier than full retirement age (that’s 67 years old for people born in or after 1960) reduces your monthly payment, so conventional wisdom says you should wait until full retirement age to claim if possible.

If you plan both to earn income and draw Social Security between the ages of 62 and when you reach full retirement age, take note: For that period of time, your Social Security benefits will drop by $1 for every $2 earned above $17,640, and $1 for every $3 earned above $46,920. These deductions stop after you reach full retirement age.

If you work for a big company

The general rule for workers at companies with at least 20 employees is that you can delay signing up for Medicare until you lose your group insurance (i.e., you retire). At that point, you’d be subject to various deadlines to sign up or else face late-enrollment penalties.

While everyone’s situation is different, there’s a good chance your current insurance through work is a more cost-effective option, said Danielle Roberts, co-founder of insurance firm Boomer Benefits in Fort Worth, Texas.

This may be due to lower premiums and other cost-sharing aspects such as copays or co-insurance, or lower costs for prescriptions under the group plan.

Do the Medicare Math

How much you earn also impacts how much you pay for certain parts of Medicare. “Your Medicare Part B premium is based on your taxable income,” Russell says. An individual with an income of $87,000 or less pays $144.60 a month in 2020 for Part B, but someone with income from above $87,000 up to $109,000 pays $202.40 a month. The highest monthly premium, for individuals making $500,000 or above, is $491.60 (Note that your 2020 Part B premium is based on your 2018 income.)

Fresno Financial Planner Takeaways

When it comes to Fresno retirement planning Soutas Financial puts your future first. If you plan to work into your retirement years, financial advisors say there are a few factors to keep in mind. Drawing Social Security earlier than full retirement age (that’s 67 years old for people born in or after 1960) reduces your monthly payment, so conventional wisdom says you should wait until full retirement age to claim if possible until you lose your group insurance (i.e., you retire). At that point, you’d be subject to various deadlines to sign up or else face late-enrollment penalties.

via If you’ll still be working at age 65, here’s how to handle Medicare

via How Working Past 65 Can Affect Your Social Security Benefits and Medicare Premiums

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