When to start collecting SS

[JacquelineR446344]

Long story short, I work a full time job and I will be 67 yrs old .  I recieved a notification from SS that I can start collecting my full SS. 

Friends are telling me not to start collecting since I am still working full time. 

Why isn't it a good idea to start now. Will I pay more for Medicare or will I pay more taxes. 

Thanks! 

[Tonster521]

@JacquelineR446344 There are a number of factors to consider regarding when to start SS Benefits. Have you already accumulated 35 years of Earnings? Health status? Life expectancy projections?Single or Married? If married, who has the highest Earnings? When do you want to stop working? Do you have a defined pension with your employer? Are you still accruing pension benefits?  Do you have a 401 K or similar Plan? What is your Federal Income Tax bracket? Will the additional income from SS Benefits move you to a greater (higher) tax bracket? Do you live in a State with State Income Taxes? If you start SS benefits, what will you do with the additional income? Will you save it for short term needs; invest it for long term needs, or just spend it as you want or need? Your decision to start at Full Retirement Age (67) or delay (maximum age 70) is contingent on the answers to the above considerations.

[GailL1]

@JacquelineR446344 

Since at 67, you are already OVER your Full Retirement Age (FRA) so the decision is up to you - you have choices.  Being OVER your FRA means that you will get NO benefit reduction for earning over the income limit if you draw your SS Retirement benefits and keep working.  However taxes are another matter -

SSA.gov - 2024 How Work Affects your Benefit 

Your choices are:

• Keep working and keep earning Don’t Take Your SS benefit yet - leave your SS Retirement Benefit alone until you reach 70 and you will get what is called Delayed Retirement Credits - approximately 8% per year is added to your SS benefit for the period of time from your FRA to 70 years old.  Then File no later than 70 years old because all SS benefit increases for this delayed credit stops at 70.  But if you keep working even past 70 and beyond,  you will keep paying into the SS system and your benefit gets higher.
• File for your SS Retirement benefit AND Keep working:  As long as you are over your FRA, which you are at 67, then you can file now at 67 and keep working with no earnings penalty - so you would get your paycheck + your full SS retirement benefit.  However, your taxes will be affected since if you make over $ 25,000 a year, counting 50% of your benefit - then some of your SS Retirement benefit will be taxed.

SSA.gov - Taxes and Your Social Security Benefit 

• File for your SS Retirement benefit and Stop Working - you will get your full retirement benefit + whatever % of delayed retirement credits based on when you file for benefits to start - remember the Delayed Retirement Credits are given for that period of time that you are over your FRA but not later than 70 years old.  So the DRC is prorated for ever how long you delay filing past your FRA.

SSA.gov - Delayed Retirement Credits 

Now for Medicare - you could have signed up for Medicare Part A as early as 65 - this is the Trust Fund where your payroll taxes for Medicare go so if you have worked long enough, there are no additional premium cost for Part A.

IF you have employer group health coverage that is deemed to be as good if not better than Medicare, you can keep the employer group health coverage going and not sign up for Medicare until you lose the employer group health coverage.  However, in order to do this and be able to sign up for Medicare Part B & D, your employer has to verify you have had this coverage since age 65 by filling out an SSA form and then you submit it with your application for Medicare to begin.

CMS.gov Form L-564 - Employment application 

You do this because you were suppose to sign up for Medicare at 65 but you can delay sign up and get a special enrollment period IF you have employer group coverage.  If you don’t get this, then you will be deemed to be a late Medicare enrollee and will be assessed a lifelong late enrollment penalty for any Part of Medicare that has a premium attached to it - be that Part A, B or D.  

You really should start reading more about Social Security and Medicare and making a plan.

Medicare.gov- Medicare and You 

SSA.gov When to Start Receiving Retirement Benefits 

One other thing - Medicare Part B (and Part D) premiums are assessed when you enroll in them.  These premiums are based on income - the more you make in income the more you pay in premiums.  The base amount in 2024 is $ 174.XX for incomes less than $ 103,000 a year for a single person.  

Medicare.gov- 2024 Cost of Medicare- fact sheet 

My caution to you is do not convert a traditional retirement account to a ROTH Individual Retirement Account because this would count in your Modified Annual Gross Income frigure from your taxes and you will be assessed a larger IRMAA (Income Related Monthly Adjusted Amount) [see link on cost of medicare] - this may or may not apply to you - just thought I would mention it to advise you on this -