Many people tend to associate age 65 with retirement age. But whether you intend to leave the workforce at 65 or not, it's a milestone to celebrate, nonetheless.
It's also an age that has certain implications from a retirement standpoint. So if you'll be turning 65 in the new year, keep these important points in mind.
Image source: Getty Images.
1. You're old enough for Medicare coverage
Age 65 is when Medicare eligibility begins. And you get a pretty lengthy enrollment window. It starts three months before the month of your 65th birthday and ends three months after that month.
Medicare eligibility doesn't hinge on your employment status, your health insurance status, or your Social Security status. Once you turn 65, you can sign up for Medicare, even if you're still working and have access to health insurance through an employer.
It also doesn't matter whether you're collecting Social Security or not. You can most certainly enroll in Medicare if you're not yet getting those benefits.
2. Failing to enroll in Medicare on time could cost you
If you don't sign up for Medicare during your initial enrollment window, it could result in lifelong surcharges on your Part B premiums. But if you're still getting group health coverage at the time of your initial Medicare enrollment period, that penalty will be waived.
It also doesn't matter whether that insurance comes from a job of yours or a spouse's job. You just need to be enrolled in a qualified group health plan covering 20 employees or more.
3. You can claim Social Security, but your monthly benefit will be reduced
Once you turn 62, you can sign up for Social Security whenever you want. If you're turning 65 next year, those benefits will be on the table. However, if you file for Social Security in 2024, you'd risk shrinking your monthly benefit for life.
If you're turning 65 in 2024 and were therefore born in 1959, your full retirement age for Social Security purposes is 66 and 10 months -- so you'll be looking at a reduced benefit if you claim Social Security at 65. If you intend to continue working in 2024, it could pay to delay your filing so you're able to lock in a higher monthly Social Security benefit for your retirement.
If you do claim Social Security at age 65 and continue to work, you'll need to be mindful of the earnings-test limit. That's another reason to consider holding off.
If your income from a job exceeds $22,320 in 2024, you'll risk having $1 in Social Security withheld per $2 of earnings. You won't lose your withheld benefits forever, but you'll automatically reduce your monthly Social Security payments by claiming them before full retirement age. It may not make sense to do that if you're not going to be able to get your full benefit up front, anyway, due to your earnings.
Your 65th birthday is an event that's no doubt worthy of celebration. Keep these essential points on your radar as you prepare to turn 65 at some point during the new year.
