How do I do retirement?

November 5, 2016 11:37 AM

I am planning to retire at the end of this school year, June 2017. I will be age 65 at retirement and have worked at my current job for 31 years. My spouse is 70 and receives a small Social Security pension. Neither of us can nor will claim any disability. I currently live in California but will have to move to Oregon to be closer to family. I have researched so many things but I still can't find the answers I seek to get the most bang out of my remaining bucks. Can you tell me where to find the answers to these questions?

When should I enroll in Medicare?

When should I enroll in SS?

As a Kaiser patient for over 30 years, I would love to stay with Kaiser after retirement. Can I keep my Medicare part D with Kaiser? Senior Advantage?

Do I also sign up for Obamacare?

Anonymous because I am not out yet about my retirement plans.

posted by anonymous to Work & Money (12 answers total)

My parents both had Kaiser for Medicare and Senior Advantage and loved it. So unless things have changed, you can keep Kaiser - which does participate in Obamacare so if you want to sign up through the website you can.

What you probably want to start with is an insurance navigator.
posted by Rosie M. Banks at 11:44 AM on November 5, 2016 [1 favorite]

full SSA retirement age is 66 for people born 1943-54 so unless you're dying soon you should wait for age 66. If you expect to live a long time in retirement (10+ years) and don't need the checks NOW, you could wait to draw benefits until age 69, as SSA gives you an 8% increase in your monthly check for each year you wait, up to 3 years of waiting.

Takes about 10 years for the increased checks to make up for the lack of checks while you were waiting.
posted by Heywood Mogroot III at 12:02 PM on November 5, 2016 [3 favorites]

In CA there is a program offered for free through your local Senior Center that helps you pick out the best Medicare plan. I cannot remember the name of it but they are very helpful. There is also one in Oregon.

Or you could do the easiest thing and go to the SS website. I think it is easy to use and explains things well.

I am a senior on SS and have Kaiser as my supplemental insurance. It is going up in Jan to 182.00 per month for the most expensive plan. That is on top of the 104.00 per month that Medicare takes from my check. It is a lot for me to pay but I still spent more out of pocket when I just had original Medicare.

Kaiser Medicare Oregon is separate from Kaiser CA. They insurance industry has made this all so difficult. if you signup with Medicare Kaiser CA before you move you will have to unenroll from them and reenroll in OR. You might experience a lapse in coverage. Maybe they have fixed this problem but two years ago that's what happened to me. Nobody told me that when I called and asked about moving and my insurance. So I ended with no coverage for a month.

All in all I am very happy in Oregon and with Kaiser. Good luck.
posted by cairnoflore at 12:15 PM on November 5, 2016

My advice is to figure out your income before you work on the health benefits. So much of health insurance can be income-based that it makes more sense to work out the income sources first.

File with Social Security when you get to full retirement age, but suspend the benefits as long as you can (you get more money that way; you are entitled to a certain amount but if you start it later they assume you have less time to use it, hence checks are bigger.) If you're 65 now, your full retirement age is 66. The people on the phone at Social Security have been really nice every time I've talked to them and will help you work out your options.

If you are in California and you're a teacher, do you have CalPERS? If so, check with them; you may have some money coming OR they may have benefits available to you at a discount. If you are under a CalPERS or teacher's union Kaiser plan you may still be eligible for the same benefits if you reach the right age/length of service after retirement, but it might depend on whether you stay in California or not.

Kaiser is different in different places-- you have to get pre-authorization to get treated in Kaiser SoCal vs. Kaiser NorCal, for example. This is partly because states' health care legal requirements vary quite a bit (especially from California to anywhere else.) You will be effectively moving from one insurance carrier to another, but without the hassle of transferring your records. Once you know your income and income sources, you can call an insurance navigator in OR and explain your situation, and they can help you figure out your options. If Kaiser were currently an option for me, I'd be back in a heartbeat so I don't blame you for wanting to stay with them.
posted by blnkfrnk at 12:20 PM on November 5, 2016 [1 favorite]

My husband and I are in the process of moving from California to Oregon and are Kaiser members. He is on Medicare.
Kaiser does not cover all of Oregon. They are strong in Portland and even down in Eugene, but we are moving south of Eugene and they will not take us. You have to live in their service area.

Call member services at 503-813-2000 to check. They will need to look it up using your new zip code. (Don't rely on the website for this. It does not have complete information, in my experience.)
posted by SLC Mom at 1:09 PM on November 5, 2016 [1 favorite]

If you are a California teacher or unionized non-instructional worker ("classified"), you probably have a pension and some form of post-employment health care benefits. These can interact with Medicare and Social Security in interesting ways. Your school district should have a retirement planning officer who can walk you through the basics. If you have a pension plan, beware of the pension buy-out / lump-sum distribution offer that may be made to you. Get good and qualified advice on it and make sure that advice is NOT from someone who hopes to earn a commission by managing that lump-sum money after you get it or converting it into an annuity, etc.

The posters above are correct about the opportunity to wait on whatever Social Security benefits you have. It's a gamble on your expected life span. The work I've seen on the gamble seems to be that men who worked manual labor jobs are supposed to take early retirement, because of the improved quality of life they get from retiring early and because they tend to die much younger, but pretty much everyone else should wait unless they happen to know themselves to suffer from some fatal illness.
posted by MattD at 1:18 PM on November 5, 2016 [3 favorites]

One point that you need to be aware of. You say that your 70-year old spouse receives a small SS benefit. Presumably that is due to a modest earning history. When you file for and begin receiving SS, your spouse's benefit will be 1/2 of yours if that 1/2 is larger than his or hers would be on its own.

I do not think that Heywood's three-year limitation is accurate. Every year that you wait to begin SS, up to age 70, results in a higher monthly benefit. But the 1/2 for your spouse will be based on what you would receive at age 66, and will not increase if you wait longer.
posted by megatherium at 3:14 PM on November 5, 2016 [2 favorites]

I'm just a little older than you and have recently figured this stuff out myself.

You enroll in Medicare a couple of months before you turn 65 to give them time to process it and it will start the month you turn 65. If you are still working at the time and not collecting Social Security you will pay for it. Medicare Part B, which is the basic one, is $121.80 month, it went up this year. You can coordinate it with your job's insurance if you want.

As others have mentioned lots of variables here. Will your job provide you with health insurance after you retire? Find out from your HR department. Make that call first before you start worrying about the Medicare supplemental stuff.

Contrary to what someone above said you do not have to deal with Obamacare, it's an entirely different and unrelated system. It's the Medicare system, but don't start looking at options until you know what your employer is going to give you.

The longer you wait to collect Social Security the higher your benefit will be.

Feel free to mefi mail me.
posted by mareli at 3:17 PM on November 5, 2016 [2 favorites]

While delay in taking your Social Security can pay off (in the form of higher monthly payments the longer you wait), don't delay getting Medicare as you will be penalized if you don't act until well after you turn 65. This is true for both part A and part B. If you are still working while on Medicare, your employer-provided health insurance will be primary; Medicare becomes your primary insurance once you retire.

Medicare Part B is designed so you don't *have to* have any other health insurance; it pays 80% of covered services after a small deductible. Part B doesn't cover any prescriptions; that's what Part D was designed to do. If you supplement your Medicare with another insurance plan, a PPO will generally cover all your Part B copays and your deductible such that your only out-of-pocket costs are for prescriptions (assuming your supplemental plan doesn't cover 100% of prescriptions) and anything Medicare won't cover. Other types of supplemental insurance, such as high-deductible "consumer driven options" don't do a very good job coordinating with Medicare and are therefore generally not worth the expense.
posted by DrGail at 3:35 PM on November 5, 2016 [3 favorites]

The Social Security Administration has a life expectancy table based on when one was born. Die before that age and you're better off taking SS as soon as you can. Die at the expected age and one would receive the same total benefits regardless of what age they started taking them. Obviously, living much longer and taking benefits later results in greater total benefits.

But it's not that simple because of income taxes, RMDs (required minimum distributions) and taxes on RMDs. With sufficient other income, taking SS early can result in a higher net because of lower taxes. Most retirement income calculators don't deal with this. The Optimal Retirement Planner (ORP) does. That link is to the basic calculator, using conventional assumptions made by such calculators. The advanced version is useful if one is willing make the effort of understanding the parameters necessary to make informed decisions before one retires to avoid being bitten by taxes on RMDs. The parameters deal with much more than when to take SS. The supporting documentation is well written.
posted by Homer42 at 4:22 PM on November 5, 2016 [3 favorites]

When should I enroll in Medicare?

During the 7-month period that begins 3 months before the month you turn 65. It can be done online at ssa.gov.
posted by davcoo at 5:47 AM on November 6, 2016

Social Security claiming can be somewhat complicated. Basically, waiting longer gets you a higher benefit. You shouldn't think about the "break even" age, because you are essentially buying insurance against outliving your assets. Waiting until 70 tends to be the best approach for most people who have enough assets or other income to swing it. It's likely worth a little money to get personalized advice from someplace like Maximize My Social Security or Social Security Advisors. Also, some state and local employees are exempt from Social Security taxes; in those cases, special rules apply.
posted by Mr.Know-it-some at 5:25 PM on November 6, 2016