I will soon be 65. Working part time. I cannot afford to pay part B for Medicare. Would it be best to take Social Security now and have it come out of my check instead of waiting until age 66 and seven months? Thank you.
— Social Insecurity
Dear Insecurity,
The payment for Medicare Part B will be automatically deducted from your Social Security payment once you begin receiving Social Security benefits. If you’re having trouble paying for that health insurance coverage, Social Security could be the solution. Just understand the impact of filing before full retirement age (FRA, 66 and seven months in your case).
“Deciding whether to take Social Security benefits before reaching full retirement age (FRA) is a big financial choice that depends on your circumstances,” said Nick Enzweiler, a CFP and 15-year wealth advisor.
Enzweiler noted that early filing permanently reduces the amount you receive each month. The longer you wait to file, to a maximum of age 70, the larger your monthly payment will be.
Enzweiler also explained your income could affect how much you receive from Social Security until you reach FRA. The earnings limit for 2025 is $23,400; $1 will be deducted from your payment for every $2 you earn over that limit until you’re age 66 and seven months. (Once you reach FRA, you’ll receive full benefits no matter what you earn.)
However, optimizing your Social Security benefits might not be the highest priority if you’re unable to receive health care without Medicare Part B coverage.
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“If you have a health need, or need Social Security to make ends meet, please take your Social Security now,” said Eric Steffy, founder of the retirement planning firm Federal Solutions Support.
Steffy acknowledged the monthly payment reduction, but added, “Here’s the kicker: You won’t necessarily earn less money by collecting Social Security before your full retirement age.”
The Social Security Administration budgets for the full amount of your benefits, accounting for you living into your late 70s. You’ll receive that total over time regardless of when you file; monthly payments just get smaller if you file early to spread that amount over a longer period.
If you want to hold off on Social Security benefits for as long as possible, you could also look into options to reduce or get help with the cost of Medicare. You can learn more about these at Medicare.gov.Dana Miranda is a Certified Educator in Personal Finance® and author of YOU DON’T NEED A BUDGET. She writes Healthy Rich, a newsletter about how capitalism impacts the ways we think, teach and talk about money.
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