Social Security, Medicare: Tips for navigating the system

By Trista Crossley


For anybody, including farmers, approaching the traditional retirement age, social security and Medicare begin looming large on the horizon. These large government programs can seem overwhelming and confusing to navigate, leaving one wondering where to start.

“Navigating is an appropriate term as it can feel like you’re a bit lost in the system,” said Jordan Thayer, a financial advisor with Morgan Stanley. “Oftentimes, it simply involves a phone call with the local Social Security Administration (SSA) office or going to to begin filing.”

In addition, nearly all taxpayers receive a yearly social security statement three months before their birthday. This statement shows what the social security monthly benefit will be at each age between 62 and 70. As Thayer pointed out, that’s a valuable piece of information to include in a financial plan as one nears retirement.

Who is eligible for social security? Anybody who has earned a taxable wage in their lifetime. Taxpayers can begin collecting standard social security benefits at 62 or can delay collecting as late as 70. Having a financial plan in place as early as possible helps determine the optimal age to begin collecting social security, especially growers whose major assets often include land and equipment. 

Thayer said the decision of when to begin collecting social security often comes down to a simple question: “Do I need the income to pay my monthly bills?” If a grower is earning sufficient income from crop share, rental income, or dividends, it may make sense to delay collecting. Each year a benefit is delayed, the social security payout increases roughly 8% per year. Social security must be collected starting at 70.

For Medicare, a taxpayer needs to have paid social security taxes for 40 quarters (the equivalent of 10 years) in their lifetime to qualify for Medicare. Workers can complete their Medicare application at Basic Medicare includes parts A and B. Part A helps cover inpatient care at a hospital, skilled nursing facility, hospice, and some home healthcare. Part B helps cover services from a doctor and other outpatient providers. Both of these come with limitations. There are also Medicare supplemental insurance packages that can be purchased to help ensure one can keep one’s preferred doctor and can have coverage for prescription drugs, vision, and hearing.

How big are these programs? In 2019, the Social Security Administration paid benefits to 69.1 million Americans. In 2022, over 65 million were on Medicare. As the baby boomer generation retires, those numbers will certainly go up. Thayer said it helps to be proactive and properly calibrate one’s expectations. Navigating these programs can involve lots of waiting and some inefficiencies, but they don’t have to be completed all at once. As Thayer pointed out, the process can be divided into sections and completed over time.

Farmers may have some special considerations when approaching these programs. For social security, they need to consider:

  • Do you need the income immediately to pay your bills?  
  • What’s your confidence level in the solvency of the program long term?  
  • Consider your health and life expectancy.

For Medicare, consider:

  • What is your current health condition?
  • Do your current doctor(s) take Medicare? 
  • If not, does it make sense to shop for a supplementary insurance plan that will allow you to keep your doctor or gain extra coverage you may need? Any time you switch healthcare insurance plans, there can be issues with your doctor accepting them. The same goes for Medicare — some doctors accept it, and some do not.

“I’d say the number one worst thing to do would be to ignore the whole subject and continue to put it off,” Thayer said. “For Medicare, you’re eligible to enroll three months before you turn 65 and three months after you turn 65. If you are eligible, you may also sign up during general enrollment, which is between Jan. 1 and March 31 each year. If you are 65 and retired, and you don’t sign up and you are eligible, your monthly premiums will increase each month you delay.”

He added that delaying your social security enrollment is not nearly as critical, since delaying actually increases the benefits you receive.

Once in the system, retirees should pay attention to any mailings received by the Social Security Administration or Medicare. If you’ve engaged a financial planner and have a comprehensive written financial plan, make sure any changes in social security benefits or Medicare are recorded.

“Both Medicare and Social Security can be intimidating tasks to tackle and evaluate. You don’t have to do it alone,” Thayer said. “If you have a thorough financial plan on hand and a professional who has helped determine the optimal age to file for social security and gotten you started on the path towards Medicare, that provides tremendous piece of mind because it eliminates the doubt of, ‘Am I doing this right? Or Is this the right time?” Find a reputable financial planner who you trust to help point you in the right direction so your time and effort are spent wisely.”  

Jordan Thayer is a financial advisor with the Global Wealth Management Division of Morgan Stanley in Seattle, Wash. The information contained in this article is not a solicitation to purchase or sell investments. Any information presented is general in nature and not intended to provide individually tailored investment advice. The strategies and/or investments referenced may not be appropriate for all investors as the appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives. 

CRC 5780280 07/2023