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I'm Not Retired. Do I Have to Enroll in Medicare Part B?

Will my earnings affect my benefits if I claim at 66?

En español | Q. Stan, I turn 65 this year and I am eligible for Medicare, but I will not be retiring at this point. If I don't take the Part B of Medicare, can I pick it up when I do retire, or will I have a problem enrolling at that time?

Also, if I collect my Social Security at 66 (my full retirement age), can I still work full time, and does what I earn affect my benefits?

A. Congratulations. You are asking the right questions at the right time. The answers will help you prepare for a smooth entry into Medicare.

Most people enroll in Medicare Part A (hospital insurance) and Part B (doctor visits and other outpatient services) during their seven-month initial enrollment period (IEP) around the time they turn 65.

But you can delay enrolling in Part B beyond age 65 without penalty if you have group health insurance from an employer for whom you (or your spouse) are still working. When you retire and this coverage ends, you'll be entitled to an eight-month special enrollment period (SEP) to sign up for Part B without penalty.

This delay is permitted only for people working for companies or organizations that employ 20 or more workers. If you work for a smaller employer, you must enroll in Part A and Part B when you turn 65, and then Medicare pays claims first and your employer plan becomes your secondary insurance.

Medicare has strict enrollment rules that affect people differently according to their circumstances. (See "When Does the Part B Late Penalty Clock Start Ticking?") If you don't sign up within your initial enrollment period or a special enrollment period (whichever is appropriate to you), your monthly premium will permanently increase 10 percent for each 12-month period you were eligible but did not enroll.

Next: If I collect my Social Security at 66, can I still work full time?

In addition, you would be able to sign up only during the general annual enrollment period that runs from Jan. 1 to March 31 each year, and your coverage would not begin until July 1.

The seven-month initial enrollment period begins three months before the month of your 65th birthday and ends three months after that month. (So for example, if you turn 65 in April, your IEP begins Jan. 1 and ends July 31.) The eight-month special enrollment period starts at the end of the month in which you stop working or lose your employer insurance, whichever is first.

Generally, people eligible for Social Security benefits do not pay for Part A. In 2011, the monthly Part B premium, which is deducted from Social Security checks, is $115.40, although for some higher-income earners, the amount is more.

As to your question about taking your Social Security benefits at 66 and continuing to work full time, you are free to do so. Once you have passed your full retirement age, you can earn as much as you wish without any loss of Social Security benefits.

Stan Hinden, a former columnist for the Washington Post, wrote How to Retire Happy: The 12 Most Important Decisions You Must Make Before You Retire. Have a question for the Social Security Mailbox? Check out the archive. If you don't find your answer there, send a query.

Next: Don't make these 5 common financial mistakes.

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