Unlike Social Security, Delaying Medicare Benefits Will Cost You

Many retirees consider Social Security and Medicare as two halves of their overall financial plan for their golden years. But how you handle the two programs is very different. In particular, delaying your Medicare benefits not only doesn't make sense but can also cost you in penalties.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, looks at the consequences of delaying your Medicare benefits. Dan notes that with Social Security, you can earn larger monthly payments by delaying your benefits. But with Medicare, you'll pay penalties for waiting beyond your normal eligibility age of 65. For Medicare Part A, penalties cost you 10% more for twice the number of years that you delayed taking coverage. For Part B, you'll pay 10% more for every 12-month period you waited. Prescription drug coverage under Part D has different rules, with you paying 1% times the base premium amount for every month you weren't covered. Dan concludes that unlike with Social Security, it almost never makes sense to wait to take Medicare benefits.

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 15, 2014, at 4:53 PM, watson14 wrote:

    I'm confused... If you're still employed with your employer's health insurance at 65 are you still penalized for not taking medicare at 65?

  • Report this Comment On July 17, 2014, at 3:28 PM, wolferd1 wrote:

    I was wondering exactly the same thing.

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Dan Caplinger

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

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