An Update on My Medicare Application
As you know, I applied for Medicare at the beginning of this month. This week, I was going to write on freeing up cash for Required Minimum Distributions for the new year. But we have time on that. This is important. So, here’s an update:
It’s useful to note that applying for Medicare is a two-part process. First, you apply for Medicare Part A, and then you apply for either Part B (and D/G-N) or Part C, once your Part A application is approved. I applied for Part A.
I received an email indicating my application is in process. When I logged in, I was told it will take about 30 days and it’s being processed in Pennsylvania. Great! But, before I read this, I had a momentary scare.
You see, you sign up for Medicare Part A on http://www.socialsecurity.gov and NOT on www.Medicare.gov. Counterintuitive, right? After I successfully completed my application, I received a confirmation email with my future Medicare number. All good. BUT, today, when I opened my email and received my progress report, the email said that my SOCIAL SECURITY APPLICATION is “in process.”
What? Noooooo! Is someone at Social Security scaring me for Halloween?
I didn’t apply for my Social Security benefit because my Full Retirement Age (FRA) is 67! I had planned to evaluate taking it year over year until I get to 70, just like I recommend for clients.
Well, the good news is that it’s merely a template and my application is for Medicare Part A only. However, I did not need the rush of adrenaline while seated at my computer first thing in the morning.
But that got me thinking. I bet one of the reasons people file for their Social Security benefit too early is that the system pretty much guides them to do so. The Medicare application gives you the option to click the button for a monthly cash payment. It does NOT say that this is your Social Security Benefit. It calls it something different.
I think it’s a terrible design mistake; possibly a legacy from the original 65 full retirement age. I think people are being misled into applying EARLY for their Social Security benefit because Medicare instructs them to click the option.
Anyone who turns 65 in November 2024 has a Full Retirement Age (FRA) of 66 and 10 months. If they opt-in to their monthly cash payment because Medicare says they can, they will deprive themselves of 12.22% of their FRA benefit. Well, 12.22% of a $2,000 monthly benefit is $245 per month! People shouldn’t be offered the option of this until they understand what it will mean to them financially. That’s a lot of monthly money to give up permanently.
So, while I’d love to report that the website is well-designed and easy to follow, I won’t make that claim. If you’re applying for Medicare Part A, you should ONLY apply for Medicare Part A.
As I tell Madrina Molly™ Community members, the decisions of when to retire and when to claim Social Security are separate decisions. Likewise, the decisions of when to claim Social Security and applying at 65 for Medicare are ALSO separate.
And they should stay that way. Stay tuned for Required Minimum Distributions (RMDs) soon.
Copyright © Madrina Molly, LLC 2024. All rights reserved.
The information contained herein and shared by Madrina Molly™ constitutes financial education and not investment or financial advice.
Sherry Finkel Murphy, CFP®, RICP®, ChFC®, is the Founder and CEO of Madrina Molly, LLC.
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Hurricane Jackie (Mom) and I have a running joke that, “If you live long enough, anything becomes possible.” If you ask her, she was not a thin, athletic, or a particularly pretty younger woman. Sure enough, as she has aged and I have aged along with her, we find that things once completely alien to us are reflected by the regard of those around us. For having outlasted her peers, she’s thin, athletic (mobile and independent), smart, and pretty!