Social Security 202: Everything To Know About Coming Changes
Social Security is far from a static benefits program.
Although the broad strokes of Social Security remain the same from year to year, many of the financial details change. Perhaps the most important of these changes, and certainly the most well publicized, is the annual cost of living adjustment, or COLA. This increase in payments is made annually to ensure that the payments made to Social Security recipients remain in line with increasing costs due to inflation.
But other payments and limits that are equally important to the overall Social Security system are also adjusted quite regularly, and this is indeed the case once again for the upcoming year. Heres a look at the most important Social Security changes that you need to know for 2023.
Understanding Social Security And Medicare
Social Security and Medicare are both federal programs that help retired and disabled Americans. Together, these programs allow those no longer in the workforce to reap similar benefits to when they were employed. These benefits include a monthly income and healthcare coverage.
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There are similarities and differences between the two programs. Social Security provides income, whereas Medicare is health insurance. While they are two different programs, Medicare and Social Security work together. In this article, we answer your biggest questions, including who qualifies for each of these benefits.
Medicare And Social Security: What You Need To Know
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Medicare and Social Security are government programs that provide a social safety net in retirement and other life circumstances, such as having a disability. U.S. workers pay into both programs through payroll taxes.
Although the programs are separate and provide different benefits, theyre connected in a few ways.
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Monthly Medicare Premiums For 2022
The standard Part B premium for 2022 is $170.10. If youre single and filed an individual tax return, or married and filed a joint tax return, the following chart applies to you:
|Modified Adjusted Gross Income||Part B monthly premium amount||Prescription drug coverage monthly premium amount|
|Individuals with a MAGI of less than or equal to $91,000 Married couples with a MAGI of $182,000 or less||2022 standard premium = $170.10|
|Your plan premium + $77.90|
How To Apply Online For Just Medicare
Are you within three months of turning age 65 or older and not ready to start your monthly Social Security benefits yet? You can use our online retirement application to sign up just for Medicare and wait to apply for your retirement or spouses benefits later. It takes less than 10 minutes, and there are no forms to sign and usually no documentation is required.
To find out what documents and information you need to apply, go to the .
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How Medicare Supplements Work With Your Part B Premiums
Most people will still need to pay for Part B premiums if they have a Medicare Supplement or Medicare Advantage plan. With Original Medicare, Part A is usually free. If you work for at least 40 quarters and pay into the system then you are also entitled to Part B.
There is a premium associated with Part B, but not everyone has to pay it. Those individuals would get assistance through the Medicare Savings Program or other programs through Medicaid.
If you have questions or need help applying for Part B,then please call us at 783-5901 or email us at email@example.comOur service is 100% FREE and were happy to help you.
Premiums For Part A Only
Social Security determines if someone has to pay any premium for Part A based on work history while paying taxes. Most people get Part A premium-free, but not all do.
If a person has to pay a premium for Medicare Part A but does not receive Social Security retirement income, that person must pay premiums directly to Medicare. In these cases, Medicare sends a monthly bill for the Part A premium.
Coverage would begin after the initial payments, but the exact length of coverage delay depends on when you enroll during your seven-month Initial Enrollment Period .
Surrounding a persons 65th birthday, one can begin to apply for Medicare. Elsewise, those who enter Medicare coverage before age 65 due to disability get this IEP surrounding their 24th month of receiving disability benefits.
In most cases, if Part A is not premium-free, then the enrollee must also have Part B and pay its premiums.
Subscribers can pay the monthly Part D premium the same way as Original Medicare.
In order to sign up for any Part D coverage, a person must also have both Parts A and B. This stands whether acquired as a separate Part D plan or as part of a Medicare Advantage plan.
At the time of enrollment, they can choose to have automatic deductions from Social Security, or another payment method.
Applicants can also change this by contacting their private Part D insurance carrier.
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Signing Up For Medicare
Follow the steps below if you need to actively enroll in Medicare.
If you decide to enroll in Medicare during your Initial Enrollment Period, you can sign up for Parts A and/or B by:
- Visiting your local Social Security office
- Mailing a signed and dated letter to Social Security that includes your name, Social Security number, and the date you would like to be enrolled in Medicare
- Or, by applying online at www.ssa.gov
If you are eligible for Railroad Retirement benefits, enroll in Medicare by calling the Railroad Retirement Board or contacting your local RRB field office.
Keep proof of when you tried to enroll in Medicare, to protect yourself from incurring a Part B premium penalty if your application is lost.
- Take down the names of any representatives you speak to, along with the time and date of the conversation.
- If you enroll through the mail, use certified mail and request a return receipt.
- If you enroll at your local Social Security office, ask for a written receipt.
- If you apply online, print out and save your confirmation page.
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When Can You Claim Social Security
The right age to claim all depends on you. Americans can file for Social Security as early as 62 years old. If you file at 62, it’s a move that could drastically reduce the total amount you could otherwise receive over your lifetime, and over the lifetime of a surviving spouse. This is an especially important consideration for women, who tend to live longer and earn less than men.
Here’s why timing is everything: 1
Early claiming: You can collect a Social Security retirement benefit as early as age 62. But if you do claim early, your benefits will be reduced by as much as 25% to 30% depending on when you were born. For example, if you are eligible for $1,000 a month at full retirement age, you might get only $750 a month at age 62. The reduction in benefits due to early filing will be less for each year you delay your filing between age 62 and your “full retirement age.”
Full retirement age: What does the Social Security Administration mean when it refers to your “full retirement age?” It’s the age at which you’re able to claim full benefits, and it varies based on the year you were born. Its age 66 for people born from 1943 to 1954, and it gradually increases to 67 for those born in 1960 or later.
More factors: The right age to claim also depends on your work plans in retirement, your health, and the rest of your retirement income. Delaying a claim for as long as possible could make sense for some people, but there are cases where early retirement is the better option.
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What Does Medicare Part B Cover
Medicare Part B covers doctors visits, lab tests, and coverage for orthopedic, cardiology, radiology, and other specialists from A to Zincluding inpatient and outpatient mental health care. Screening for common medical conditions, annual wellness checks, vaccinations, and second opinions about a medical issue are also covered by Part B. In general, Part A and Part B cover 80% of Medicare-approved services. You would be responsible for the remaining 20%.
Monthly Medicare Premiums For 2021
The standard Part B premium for 2021 is $148.50. If youre single and filed an individual tax return, or married and filed a joint tax return, the following chart applies to you:
|Modified Adjusted Gross Income||Part B monthly premium amount||Prescription drug coverage monthly premium amount|
|Individuals with a MAGI of less than or equal to $88,000 Married couples with a MAGI of $176,000 or less||2021 standard premium = $148.50|
|Your plan premium + $77.10|
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If You Already Receive Benefits From Social Security:
If you already get benefits from Social Security or the Railroad Retirement Board, you are automatically entitled to Medicare Part A and Part B starting the first day of the month you turn age 65. You will not need to do anything to enroll. Your Medicare card will be mailed to you about 3 months before your 65th birthday. If your 65th birthday is February 20, 2010, your Medicare effective date would be February 1, 2010.
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When Do You Have To Pay For Medicare
If you dont qualify for premium-free Part A coverage, youll need to pay a monthly premium. Youll also have to pay a premium if you sign up for Part B, which is optional.
If you receive Social Security benefits, youll have these premiums automatically deducted from your checks. Medicare will bill you directly if you arent collecting Social Security.
If you sign up for Parts C and D, youll also need to pay premiums for those plans. If you receive Social Security benefits, you can request that the premiums be deducted from your checks, but this wont happen automatically. If you dont receive benefits, youll get a bill from Medicare for Part D and from the insurer for Part C.
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Does Medicare Premiums Reduce Social Security Taxable Income
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Is Social Security Taxed Before Or After the Medicare Deduction? You may not pay federal income taxes on Social Security benefits if you have low-income. But for most, your Social Security benefits are taxable. That means youll pay taxes before Medicare premiums are deducted.
Medicare Part B Premiums
Beneficiaries enrolled in Medicare Part B must pay premiums .35 By law, individuals receiving Social Security benefits have their Medicare Part B premiums automatically deducted from their benefit checks.36 In 2017, approximately 75% of Medicare Part B enrollees had their Medicare Part B premiums deducted from their monthly Social Security benefit checks.37 Those not receiving Social Security are billed by Medicare,usually on a quarterly basis.38Individuals who are enrolled in Medicare Part B but do not receive Social Security may include individuals who are waiting to reach full retirement age and individuals who spent their careers in employment that was not covered by Social Security, including certain federal, state, and local government workers.
The standard monthly Medicare Part B premium in 2018 is $134.00. This premium applies to individuals with a modified adjusted gross income of $85,000 or less and to couples with a MAGI of $170,000 or less.42 Enrollees earning more than those respective amounts pay higher premiums based on their income, as shown in Table 1.
Table 1. Medicare Part B Premiums, 2018
Modified Adjusted Gross Income a
Notes: Each member of a couple pays the applicable premium. Lower thresholds are rounded up to the nearest dollar and upper thresholds are rounded down to the nearest dollar.
Eligibility For Social Security
To qualify for Social Security benefits, you must be 62 or older, blind or living with a disability. You may be able to start collecting benefits at age 60 if youre a widow or widower.
You must also have enough work credits, which you earn each year by working and earning income. You need a minimum of six work credits, and you can earn up to four work credits per year. In order to receive most benefits, the program requires an average of one work credit per calendar year from age 21 to the year when you turn 62 or qualify as disabled or blind, with a maximum of 40 credits.
You must also be a U.S. citizen or legally residing in the U.S.
The rules for qualifying for Social Security due to a disability depend on how old you are when you become disabled. The younger you are, the fewer work credits youll need to be eligible for Social Security
If youre living with a disability, youre eligible for Medicare benefits after youve been entitled to disability benefits for 24 months. If you have Lou Gehrigs disease, or ALS, youre eligible for Medicare the first month you receive disability benefits.
If youre a kidney dialysis or kidney transplant patient, your Medicare coverage can start as early as the first month of dialysis, depending on whether youre participating in a home dialysis training program, or the month you have a kidney transplant or receive health care services before the transplant.
State Income Tax And Benefits
State income tax may also reduce the Social Security benefits that you receive. Thirteen states tax Social Security benefits. Some tax your benefits in their entirety and others tax a portion of them according to your age or income level.
Twenty-six states either exclude Social Security benefits from taxable income or impose no state tax. Twelve additional states tax your benefits but exempt that portion of your benefits that are taxed at the federal level.
Visit TaxAdmin.org and search for your state to learn more about your states tax code.
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When Should I Sign Up For Medicare
Generally, we advise people to file for Medicare benefits 3 months before age 65. Remember, Medicare benefits can begin no earlier than age 65. If you are already receiving Social Security, you will automatically be enrolled in Medicare Parts A and B without an additional application. However, because you must pay a premium for Part B coverage, you have the option of turning it down. You will receive a Medicare card about two months before age 65. If you would like to file for Medicare only, you can apply by calling 1-800-772-1213. Our representatives there can make an appointment for you at any convenient Social Security office and advise you what to bring with you. When you apply for Medicare, we often also take an application for monthly benefits. You can apply for retirement benefits online.
If you didnt sign up when you were first eligible for Medicare, you can sign up during the General Enrollment Period between January 1 and March 31 each year, unless you are eligible for a Special Enrollment Period.
Social Security Vs Medicare
Social Security provides federal income benefits in retirement based on what youve earned over a lifetime of working. Your Social Security benefits are calculated using your highest 35 years of wages, and the amount you receive is based on your pay over your lifetime and how long you wait to claim your benefits. Social Security also pays benefits to people living with disabilities, survivors of workers who have died and dependents of beneficiaries, according to the Social Security Administration
Medicare provides federal health insurance for people age 65 and older and younger people living with certain disabilities or chronic conditions. Medicare is made up of four parts, including Part A , Part B and Part D . It also includes Part C, or Medicare Advantage, which is a bundled alternative to Original Medicare offered by private insurance companies, including all the coverage of Part A and B, plus some additional benefits.
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Getting A Social Security Number For A New Baby
The easiest way to get a Social Security number for your child is at the hospital after they are born when you apply for your childs birth certificate. If you wait to apply for a number at a Social Security office, there may be delays while SSA verifies your childs birth certificate.
Your child will need their own Social Security number so you can:
- Claim your child as a dependent on your income tax return
- Open a bank account in their name
- Get medical coverage for them
- Apply for government services for them