Re: Medicare question

Posted by coshoo on March 26, 2016 at 16:03:54 from (174.31.200.196):

In Reply to: Medicare question posted by rrlund on March 26, 2016 at 12:20:24:

I'm late to the party, but there's lots of misinformation on here.

Part A is free, but you have to sign up for it within a few months of your 65th birthday, or they penalize you with higher premiums on Part B for the rest of your life. Part A is basically hospitalization.

Part B is $104 a month. A and B together are about like conventional health insurance, but you'll still have significant deductibles. You don't have to take it at 65, but I can't imagine you on your wife's Blue Cross will be less than that, even with the tax deduction. Only way to find out is to check with wife's employer about your cost. BTW, being self employed, you get to deduct all your Medicare costs anyhow.

Don't know what Part C is- It may be like a Class B motor home- nobody knows what that is, either.

Part D is prescriptions, but you can generally get a Medicare Advantage plan that includes prescriptions, for about the same price as straight Part D.

I sure have had better luck with Medicare than the insurance I had previously. Have had a $21,000 knee operation and a $14,000 heart workup, and my share was $300 on the former, $250 on the latter. No deductibles (thanks to the Advantage plan). I do have to pay a $50 copay for office visits (would be less with a higher premium Advantage plan), but am fairly healthy, so those don't add up to anywhere near what the difference in premium is.

My Advantage plan is $70 a month, so I'm paying $174. I've been self employed for 20 years- at first I was on wife's Blue Cross- cost kept going up, and when it hit $500 a month, I bolted and got my own Health Savings Account. Better, only $250 a month, but $4,000 deductible. Going on Medicare was a real plus- about the only way staying on conventional insurance would be better is if someone else is paying for it.

As for when to start SS, I think you're right on target. You DEFINITELY don't want to start before age 66 unless you actually retire, because you get dinged a dollar of SS for every $2 you make over about $12,000 a year. At age 66, its a closer question, because then you can make as much as you want and not get dinged. You will likely have to pay income tax on 85% of your SS, but hey, its the easiest money you'll ever make. I decided to take it at 66, even though I'm still working, because we could use the extra money to add to our retirement funds and travel a little more. And we got in on the loophole (closing in April) where spouse can draw half of mine, while hers continues to grow until age 70.

I know a lot of guys in physical jobs are about "all in" at 62, and if you just can't cut the mustard anymore, then retire at 62 and start drawing. Just be aware that you'll be drawing 25% less for the rest of your life, and your compounding through cost of living increases will also be correspondingly smaller. I think the argument about "beating the system" by drawing early is the wrong approach, and is only valid if you have several hundred grand in retirement savings, so you can supplement your SS later on so you don't live like a pauper in retirement.

Replies:

• Re: Medicare question rrlund 16:24:31 03/26/16 (2)
  • Re: Medicare question coshoo 16:30:05 03/26/16 (1)
    • Re: Medicare question rrlund 16:34:43 03/26/16 (0)

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