Working past 65 or our full retirement age is a great way to significantly boost our monthly Social Security benefits. But what about our other finances? While our benefits are affected, are our Medicare premiums and taxes affected too?
We go to MarketWatch’s Kate Ashford for insight on these questions.
Work Longer, Retire Stronger
We become eligible for our benefits at 62; however, our full retirement age is between 65 and 67, depending on the year you were born. For every month after you reach your full retirement age, your Primary Insurance Amount (PIA), which is the amount you receive each month as Social Security, gets a credit added to it, increasing its amount. Those who can wait to claim till the age of 70 can receive a maximum of 130 percent of their initial PIA.
Medicare premiums, for those who are enrolled, are automatically deducted from your benefits each month. Seniors who continue to work should have the option to enroll in employer-sponsored health insurance rather than Medicare. If employer health insurance is unsatisfactory, they still have the option to easily enroll. Health Savings Accounts (HSAs) are savings accounts that work similarly to 401(k)s and can be a retirement asset. However, if you have both Medicare and an HSA at the same time, you might face considerably high taxes, so it’s a better option to have Medicare or an HSA.
Working past 65 is a great way to build retirement savings and boost your benefits. Not everyone can or wants to retire at the same time, and those who enjoy their working life should leverage that for a stronger retirement. If you have to work but want to ease into a more retired lifestyle, a half-retirement might be the perfect option for you.
For more retirement tips and tricks, make sure to follow along with the Council for Retirement Security.