Some people equate age 65 with retirement age, even though it’s common to retire before or after 65. But age 65 is significant regardless of your retirement plans. And if that’s the age you’ll be reaching in 2023, here are a few important points to keep in mind.
1. You can sign up for Medicare — but you don’t necessarily have to
You’re eligible to get health coverage under Medicare once you turn 65. In fact, your initial Medicare enrollment window spans seven months, beginning three months before the month of your 65th birthday and ending three months after then.
If you don’t sign up for Medicare on time, you could face a lifelong surcharge on your Part B premiums. But you also don’t necessarily have to enroll in Medicare at age 65.
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Some people opt to continue working into their late 60s or even 70s. If you’re still working at age 65, you might still have health insurance through your employer. And as long as you’re enrolled in a qualified group plan, you can delay your Medicare enrollment without having to worry about surcharges.
2. You can sign up for Medicare Part A alone
Medicare Part A, which covers hospital care, is free for most enrollees. As such, even if you have access to an employer health plan at age 65, you might choose to sign up for Part A alone because it won’t cost you anything. The benefit to doing so is that Part A can serve as secondary insurance in case you incur hospital costs that your primary insurance won’t cover.
That said, you should know that once you sign up for Medicare, you’ll no longer be able to contribute money to a health savings account (HSA). This holds true even if you’re only enrolling in Part A and are waiting to sign up for Part B. So if you want to keep funding your HSA and enjoying the tax benefits involved, it could pay to delay your Part A enrollment.
3. You can file for Social Security — but you’ll get a reduced benefit
You’re allowed to file for Social Security once you turn 62. But you’re not entitled to your full monthly Social Security benefit based on your personal wage history until you reach full retirement age (FRA).
If you’re turning 65 in 2023 and were therefore born in 1958, your FRA is 66 and 8 months. Claiming Social Security at age 65 will reduce your benefits by roughly 9%. And that reduction will remain in effect for the rest of your life.
Now if you need your Social Security benefits at age 65 because you’re retiring, you may not be able to delay your claim. But if you’re still plugging away at a job, you may want to sit tight on Social Security so you don’t shrink your monthly benefits for life.
Furthermore, if you start collecting Social Security at age 65 and continue working, you’ll risk having some benefits withheld if your income exceeds a certain threshold. So that’s another good reason to delay your claim.
Age 65 is a big milestone worth celebrating. Keep these points on your radar as you gear up for your next birthday.
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