Social Security, Medicare Important Parts Of Retirement Planning

Myron Cope would occasionally do a segment that he called “shirt pocket notes.” This was when he would discuss several unrelated things that had been on his mind. Today we will do something similar and talk about several important parts of Medicare and Social Security.

We discuss Social Security several times a year because it is such an important part of retirement planning. Several weeks ago, I was reviewing retirement income planning with a couple when we were looking what an important part SS played in their retirement. This is always the first step of retirement planning. Without the income, you need to pay your bills and do the things you worked a lifetime for, nothing else matters.

This couple had done a terrific job saving for retirement. When we were estimating their SS income, over a normal life expectancy for each of them, they will collect between $925,000 and $1,050,000 in benefits. That is a valuable asset and considering the right timing could produce over $100,000 more income. Taking SS at age 62 could reduce their lifetime income much more. Social Security decisions can affect a spouse for over 20 years.

Anyone born in 1953 or before who is not already collecting SS, has an option of filing for their benefit that no one else has, due to a change in law several years ago. These people still have a right to file what is called a restrictive application. This means you might be able to collect spousal benefit and allow your own benefit to continue to grow 8 percent a year until they reach age 70. This means you are collecting a monthly check and still experiencing growth in your own benefit. If you have started receiving your SS less than 12 months ago, you can get a mulligan, pay them back and change your start date.

To be eligible, your spouse must have filed for their own benefit. Remember, you may be able to use a former spouse’s record if you were married for at least 10 years before your divorce and you did not remarry. It does not matter if your ex remarried. You may also be able to file a restricted application if your spouse is deceased. If they died while you were married, you must have been married for nine months unless they died by accident. Get more benefits by making the correct SS claiming decisions.

Medicare has some benefits to help keep you healthy. You receive onetime options to get a preventative physical examination. This initial exam must be done within 12 months of starting Part B. After the first year, Medicare pays for an annual wellness visit. This includes a general health risk assessment based on current health status and medical and family history. The doctor may order tests that he or she may think are appropriate, review medicines and recommend referrals to programs such as smoking cessation and weight management.

There also should be a discussion with the doctor about advanced directives and other end of life decisions. A plan should be established for health screenings and immunizations. These yearly visits can be a valuable to maintain your health.

Your Financial Future is written by certified financial planner Gary W. Boatman, MBA and CFP, who also wrote the book, “Your Financial Compass: Safe Passage Through The Turbulent Waters of Taxes, Income Planning and Market Volatility.” If there is an area that you would like to see discussed in the column, send your suggestions to [email protected].