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Turning 65 and Still Working: What About Medicare?

Working past traditional retirement age used to be uncommon. Now there are far more Americans aged 65 and older in the workforce than there were 3 decades ago. The number of employed Americans rose by 35% between 2011 and 2016 according to a December 2017 study completed by Senior Living. Medicare used to be only thought of as retirement health insurance, but many who qualify may not be retired at all.

How does working past 65 impact Medicare?

Deciding when to stop working is a complex choice, and it depends upon lots of factors like health, assets, and how much going to work is still enjoyed as an important part of daily life. At retirement, most people still take both Medicare Part A and B, but is this always the right choice?

At retirement age, the majority of people who have been working or had a working spouse qualify for free Part A, and if this is true, there is no reason not to take it. However, if your job still offers you creditable coverage, you can delay Medicare Part B with no penalty.

It is important to note that group health insurance is just about the only creditable coverage. This could be group major medical either from your own or a spouse’s employer. COBRA and retirement plans probably won’t count. If you don’t have creditable coverage, you will be penalized for not taking Part B, with a typically modest premium, as soon as you qualify. You may also have to suffer a penalty for not signing up for a Part D prescription drug plan.

Again, most people sign up for Part A, B and D as soon as they qualify at 65, but there are good reasons to delay coverage. If you enjoy group health insurance at your job or from your spouse’s job, you may be able to delay Part B and D, and by doing this, you also delay associated premiums.

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