Social Security and Medicare: The Two Decisions That Shape Your Retirement Timeline

Alexis Zuccaro, CWS®, AIF® |

You’ve spent years working, saving, and paying taxes; now you’re approaching retirement, and it’s time to make sure all your benefits and sources of income are in place. You also need to be thinking about healthcare costs, since these are likely to be an increasing factor as you age. For the vast majority of retirees, Social Security benefits make up a sizeable portion of the funds you’ll need to maintain your retirement lifestyle, and Medicare is likely to be the cornerstone of your healthcare management strategy. But there are a lot of things to consider related to your Social Security benefits and Medicare enrollment, and you probably need to start the process well in advance of when you actually intend to retire. You also need to be well informed about all your options and how these choices will impact your (and, if applicable, your spouse’s) Social Security income and your out-of-pocket healthcare costs.

How can I access my Social Security account?

If you’re thinking about retirement and you haven’t already done so, the first thing you need to do is create your free online access to your Social Security account. It’s easy, it’s free, and maybe most important, setting it up properly makes it more difficult for hackers to steal your identity and, potentially, your Social Security benefits.

To get started, go to https://www.ssa.gov/myaccount/. There, you’ll be able to click on a button, “Create an Account,” and the program will walk you through the process. You’ll need to provide some basic information and create a user name and password. When you’ve done that, you’ll be able to log in to the site and view your Social Security statement and earnings record, use various online calculators, and access information you’ll need in order to make informed decisions and plans regarding your Social Security benefits. When the time comes, you can also use your online access to submit your application for Social Security benefits.

When should I file for Social Security benefits?

To qualify for benefits, you must have at least 40 credits: these are accounting units used by the Social Security Administration (SSA) to assess how much and for how long you or your employers have been paying into the Social Security system. There are various types of benefits available, and each has different requirements for qualification:

  • Retirement income benefits: You must have 40 credits to qualify.
  • Survivor benefits: Paid to the spouse or children of a deceased worker, the amount of the benefit is determined by the length of time the worker or their employer paid into the system. Qualification for survivor benefits can begin with as few as six credits.
  • Disability benefits: If a worker is disabled, they may qualify for Social Security Disability Insurance (SSDI). Qualification depends on the age at which the disability occurred. For workers disabled at age 24 or younger, as few as six credits may be needed. For those 31 and older, a minimum of 20 credits will usually be required.
  • Spousal benefits: A spouse who has little or no Social Security wages or earnings may qualify for a benefit on the basis of a spouse’s earnings record. Even if you are divorced from the spouse, if the marriage lasted at least ten years and you have not remarried, you may qualify to receive a spousal benefit, subject to age requirements.

You can begin receiving benefits as early as age 62 (“early retirement”), but your benefit will be reduced permanently. Your full retirement age (FRA), at which you will receive your full benefit, is determined by your date of birth.

You do not have to begin taking your benefit at full retirement age, however. In fact, if you delay receiving benefits past your full retirement age, your benefit will increase by 8% per year (for those born 1943 or later) until age 70. Once you reach age 70, your benefit will not increase, no matter how long you wait. So, for example, if you are at full retirement age at 66 and your benefit is $2,500 per month, by waiting until age 70 to claim your benefits, the monthly amount would increase to around $3,300.

For spousal benefits, you may apply as early as age 62, but the benefit will be reduced, as discussed above. If you have your own earnings record and your benefit would be greater based on that, you will receive your own benefit instead of a spousal benefit. Your spousal benefit will not increase past full retirement age, regardless of whether your spouse delayed receiving benefits or not. Spousal benefits do not affect the amount of benefits payable to the spouse on whose earnings record they are based.

When should I enroll in Medicare?

Medicare is available to Americans age 65 or older, in addition to younger persons receiving Social Security Disability Insurance (SSDI) benefits. Generally, you should apply for Medicare during your initial enrollment period, which runs from three months before the month of your 65th birthday to three months following. If you do not enroll during your initial enrollment period, you may become subject to penalties—in the form of higher monthly premiums—when you do enroll.

Whether you are registered for Medicare, you’re not registered but eligible (age 65 or older), or you’re already receiving Medicare benefits but you’re thinking about changing your plan, you need to know that the current enrollment period for Medicare coverage in 2027 runs from October 15, 2026, to December 7, 2026. During this period, you have the opportunity to enroll or make changes to your plan for 2027, and the chance won’t come again until October 2027.

If you aren’t yet receiving Medicare benefits and you are eligible, it’s important to enroll before December 7 in order to avoid a penalty for the months you could have had coverage but didn’t. However, if you are already covered by another healthcare plan that provides “creditable coverage,” you will not be penalized for deferring your application for Medicare. “Creditable coverage” means coverage that provides benefits equal to or better than those provided by Medicare. Generally speaking, employers with 20 or more employees, as well as certain government employers and organizations, offer coverage that meets these requirements. If you work for such an employer and are age 65 and otherwise eligible to enroll in Medicare, you may be exempt from the penalties for deferred enrollment. This consideration is especially important for persons with younger spouses who do not yet qualify for Medicare. If your spouse’s health insurance coverage is being provided through your employer, it may not be to your advantage to enroll in Medicare and drop your other coverage until your spouse qualifies either for Medicare or other coverage.

If you are approaching the age of eligibility for Medicare and are unsure whether your employer offers “creditable coverage,” you should ask for a notice of creditable coverage. If your employer cannot provide such a notice, you should enroll for Medicare during your initial enrollment period in order to avoid penalties later.

At Bloomfield Hills Advisory, we understand that staying organized with all the dates, deadlines, and other information you need to make good retirement decisions can become stressful. If you have questions about coordinating your application for Social Security or Medicare with your overall planning for retirement, we can help you find the answers you need. Please let us know how we can help.

What do I need to know about Trump accounts for my child or grandchild?