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.

Dan Caplinger and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.