Social Security and Medicare planning is incredibly important for a successful retirement, and it needs to start at least two years before you reach age 65, the age when you must sign up for Medicare or potentially have to pay permanent late enrollment penalties. Keep in mind that if you are in a higher income bracket, your premium could be up to 3.5 times higher for Medicare Part B premiums, based on your modified adjusted gross income on your tax return two years before file. That’s one of the reasons why it is so important to plan ahead.
Social Security goes hand in hand with Medicare planning because your Medicare premium usually gets deducted from your Social Security check. You can file for Social Security as early as age 62, but keep in mind that if you file early, your benefit could be reduced by as much as 30%—permanently. Waiting from age 62 to your full retirement age (approximately age 67 for most people), allows you to file for your full benefit amount based on your 35 highest-earning years. However, you can continue to wait until age 70 to file, which adds another 8% per year to your benefit. It makes no sense to wait longer than that.
