Social Security & Medicare in Retirement

There are limits to what Medicare will or will not pay, so it’s in your best interest to stay informed. It’s outlined by service, benefit, coverage and the cost to you. Coverage is based on three factors: federal and state laws, national coverage decisions made by Medicare about whether something is covered, and local coverage decisions made by companies in each state that process claims for Medicare. (These companies decide whether something is medically necessary and should be covered in their area.)

With Part A Hospital Insurance, you usually don’t pay a premium because you or your spouse already paid for it throughout their payroll taxes when they were working. Part A helps cover inpatient care in hospitals, including critical access hospitals and skilled nursing facilities (not custodial or long-term care). It also helps cover hospice care and some home health care, but beneficiaries must meet certain conditions to get these benefits.

With Part B Medical Insurance, most people pay a monthly premium. Part B helps cover doctors’ services, outpatient care and some other medical services that Part A doesn't cover. It’s clearly defined what Medicare Parts A and B cover, so it’s up to you to plan accordingly when it comes to your retirement strategy how and when to utilize your Medicare benefits. Part D addresses drug prescription coverage.

Social Security benefits can enrich your retirement provided you can wait until age 70 to maximize your benefits. Decisions on when to take Social Security benefits are a “we” decision not a “he” decision. Women outlive their husbands the vast majority of the time, so ultimately her lifetime benefits are structured on “when” the benefits are taken. Waiting to age 70 may also include cost of living adjustments along the way that will also increase her lifetime payout. Optimizing Social Security may compel you to work until age 70 or live, at least, in a state of semi-retirement. It’s a big decision and it requires both spouses.