Social Security and Medicare Decisions That Can Cost You for Life

Admin 11 min read

Social Security and Medicare will shape your retirement more than almost any other financial decisions you’ll make. The choices aren’t obvious: when to claim benefits, whether to choose original Medicare vs. Medicare Advantage, how to avoid enrollment penalties that can follow you permanently. And the programs don’t make them easy to navigate.

Mark Miller knows this territory better than almost anyone. He’s spent nearly 20 years covering Social Security and Medicare for Morningstar and The New York Times, and he’s enrolled in both programs himself.

He joined Boldin CEO Steve Chen on the Boldin Your Money podcast to share what he’s learned, and what most people still get wrong.

For most households, Social Security and Medicare are the two most valuable financial assets in retirement, worth more in combined lifetime value than the entire portfolio of many savers. A single average-wage male retiring at 65 can expect roughly $753,000 in combined lifetime Social Security and Medicare benefits, according to a 2025 Urban Institute analysis. A woman with the same earnings history would see $843,000 due to longer life expectancy. For a couple with one average-wage earner and one low-wage earner, the combined lifetime value climbs to nearly $1.5 million.

The specific numbers matter less than what they reveal. Most people think about retirement in terms of assets: the 401(k) balance, the brokerage account, the savings total. That view leaves Social Security and Medicare undervalued, even though both programs will, for many, anchor retirement income more than anything else. Miller has a different way of thinking about them.

“It’s really a form of insurance,” he said. “And what it’s there to do is protect against the risk of lost income in retirement and to provide insurance against the risk of outliving your money.”

That framing carries a lot of weight when you hit the question most people stress about first: when to claim Social Security.

For most people, the best age to claim Social Security is 70. Delayed retirement credits build at 8% per year from full retirement age through 70, giving you a consistent, inflation-adjusted increase. There’s no financial benefit to waiting past 70.

Full retirement age is 67 for most people now, which sounds like the finish line but isn’t. It’s the age at which you receive 100% of your earned benefit, not the maximum.

Miller suggests claiming later, and he’s especially firm on this for married couples. The math on delay for couples is even more compelling because one spouse is likely to live well into advanced age, and the surviving spouse would collect whichever benefit is larger.

“Later is generally better,” Miller said, “but having said that, you should claim when you need it.”

He also has little patience for the argument that you should claim at 62 and invest the proceeds to beat the delayed credit rate. “OK, well, show me your 8% risk-free,” he likes to respond. “Because the 8% is guaranteed.”

It’s also worth understanding what funding the delay actually looks like in practice. “Either you’re working, so you’re buying the delay that way, or you’re not working and you may be drawing down from retirement accounts… to meet living expenses,” Miller said. “And that can actually be a very valid strategy.”

The point is that delaying Social Security has a real funding cost, and knowing how you’ll cover expenses in the gap years is part of making the decision well. The Boldin Planner lets you model different claiming ages, project the income difference over time, and stress-test your plan against rising Medicare costs.

Some people hear the 2032 trust fund depletion date and decide to claim early out of fear the program might run short. Miller thinks that’s a misread of what depletion actually means, and a costly mistake either way.

“These cuts would apply across the board to everybody, including you if you claimed at 62,” he said. You’d have locked in a smaller base and taken the reduction on top of it. “So you’ve hurt yourself twice.”

Miller tends to think the political cost of letting benefits fall for tens of millions of voters is steep enough that Congress will act at the last minute. This scenario played out in 1983, when a deal (which introduced a tax on benefits) was reached just months before the fund would have run short.

How to Avoid Medicare’s Permanent Late Enrollment Penalty

If you don’t enroll in Medicare Part A and Part B during the window around your 65th birthday, and you don’t have qualifying employer coverage, you’ll face a permanent Part B late enrollment penalty of 10% for every 12 months you waited. It never goes away.

Medicare is where Miller sees the most avoidable mistakes, and most of them start there. If you’re past 65 and still on employer coverage, you can delay without penalty, but when you do eventually enroll you’ll need to file a form, countersigned by your employer, confirming you had creditable coverage during the gap. Miller enrolled at 67 after staying on his wife’s work plan and went through exactly that process.

His practical advice: start the paperwork early. “You can put your paperwork in as early as three months ahead of the intended start date,” he said. “I would urge people to do that.” SSA staffing has been under real pressure, and getting into the queue ahead of schedule matters more than it used to.

Once Part A and B are squared away, the next decision is the one with the most long-term consequence.

Original Medicare vs. Medicare Advantage: Which One Is Better?

Original Medicare gives you access to nearly any provider that accepts Medicare, with no network restrictions. Medicare Advantage offers lower upfront costs but routes your care through private insurer networks with prior authorization requirements that can delay or deny coverage. Miller favors original Medicare, and his reasoning comes down to what happens when you actually need care.

	Original Medicare	Medicare Advantage
Provider access	Any provider that accepts Medicare, nationwide	Network-restricted; out-of-network care costs more or isn’t covered
Monthly costs	Part B premium + Medigap + standalone Part D	Part B premium + plan premium (often $0)
Drug coverage	Requires a separate Part D plan	Usually bundled into the plan
Prior authorization	Not required	Required for many procedures and specialist visits
Annual out-of-pocket cap	No cap; Medigap covers most cost-sharing	~$6,000–$8,850 in-network (2025)
Supplemental (Medigap) coverage	Compatible; fills gaps in cost-sharing	Not compatible with Medigap
Plan stability	Coverage rules are federally standardized	Plans can change premiums, networks, and benefits each year
Extra benefits	None beyond Medicare’s standard coverage	May include dental, vision, hearing, gym membership

The Medicare Advantage pitch looks attractive upfront. You keep paying your Part B premium, drug coverage often comes bundled at no extra cost, and there’s a built-in annual out-of-pocket ceiling, generally somewhere in the $6,000 to $7,000 range for in-network care. Some plans add gym memberships or grocery cash cards. On paper, it can look like the smarter financial move.

The space between the pitch and the reality tends to show when you actually get sick. “They kind of run you through the mill to get the care approved or outright denial of care,” Miller said. “The old joke is everybody loves their health insurance until they have to use it.”

With traditional Medicare, you’ll pay more upfront: Part B, a standalone Part D drug plan, and a Medigap supplemental policy. But the coverage is predictable, the provider universe is wide, and no insurer is sitting between you and your doctor.

“You’ve got predictability annually of what your healthcare expenses are going to be,” Miller said. “People absolutely love it.”

The hidden cost that Medicare Advantage charges every Part B enrollee

There’s also a cost most enrollees don’t know they’re paying. Medicare Advantage plans are currently overpaid by the government by an estimated 20% compared to what it costs to deliver equivalent care through traditional Medicare.

A March 2026 Joint Economic Committee report found that in 2025, every Part B enrollee absorbed roughly $212 in extra premiums to cover those overpayments, regardless of which type of plan they were in.

Why Medicare Part B Premiums Are Projected to Double

Medicare Part B premiums are projected to roughly double over the next decade, driven by a shift toward outpatient care delivery, rising healthcare costs broadly, and overpayments to Medicare Advantage plans that get distributed across all Part B enrollees.

This hits hardest for people in IRMAA surcharge territory, the income bracket where Part B and Part D premiums increase based on your income from two years prior. Miller ran into it himself after claiming Social Security at 70 while still doing some freelance writing.

“It’s a good problem to have and it’s a tail-wagged dog kind of a discussion,” he remarked. “I don’t think taxes should ever really drive these decisions, but you kind of notice it.” If you’re earning any wage income when Medicare starts, there’s a reasonable chance you’ll cross into an IRMAA bracket.

What most people miss: you can appeal an IRMAA surcharge if a qualifying life event has reduced your income since the lookback period, and retirement counts as a qualifying event. The timing of any appeal needs to line up with when SSA actually receives your updated tax return, so it’s worth thinking through before you file.

Compare Medicare Part D Plans During Open Enrollment

Medicare Part D plans change their premiums, deductibles, and covered drug lists every year. The plan that fit your needs last year may cost more or cover less this year, and the only way to know is to shop around during open enrollment, which runs mid-October through early December.

Miller changes his Part D drug plan every year and thinks far more people should. By his estimate, only about a quarter of people enrolled in Advantage or Part D plans explore their options during open enrollment, and older enrollees are even less likely to do it.

His read on why the system works this way is blunt: “Complexity is a feature, not a bug. I think it’s built that way on purpose.” Insurers offer sharp entry rates counting on the fact that most people won’t come back to compare. The plans price accordingly.

The Medicare plan finder at medicare.gov is where to search. Pull up your actual drug list and run the comparison against what’s available. It takes less time than most people think.

Setting up a My Social Security account at SSA.gov takes about 10 minutes and protects against a fraud risk most people don’t know exists. Scammers have claimed benefits under other people’s Social Security numbers by creating accounts before the actual account holder does. Having an active account with your own login closes that off.

It also gives you your projected benefit statement and lets you check your full wage history for errors that could affect your eventual benefit calculation. “Once you have that,” Miller said, “you can download a statement anytime you want.” And when Medicare enrollment comes up, you can start that process through the same site.

Social Security and Medicare are likely worth more to your retirement than anything else you own, and the decisions around both are consequential. The Boldin Planner lets you run the numbers on claiming age, Medicare costs, and income sequencing so you can see how it all fits together. The clarity is worth it.

When is the best age to claim Social Security?

For most people waiting until 70 produces the highest lifetime benefit. Delayed retirement credits build at 8% per year from full retirement age through 70, and that’s a guaranteed, inflation-adjusted increase. You can claim earlier if you need the income, but doing so because you’re worried the program might run short isn’t: any future benefit reduction would apply to everyone.

What is the Medicare late enrollment penalty and how do you avoid it?

If you miss your initial enrollment window at 65 without qualifying employer coverage, you face a permanent Part B penalty of 10% for every 12 months you waited. It doesn’t phase out. To avoid it, enroll during your initial window, or if you’re still working past 65, keep valid employer coverage and file the creditable coverage affidavit when you do eventually enroll.

What’s the difference between original Medicare and Medicare Advantage?

Original Medicare gives you access to nearly any provider that accepts Medicare, with no network limits. You add a Medigap supplemental plan and a standalone Part D drug plan for drug coverage. Medicare Advantage bundles everything into one private plan, usually at lower upfront cost, but with network restrictions and prior authorization requirements that can block or delay care.

Should you compare your Medicare Part D plan every year?

Yes, you should compare Medicare Part D plans when you can. Plans change their drug coverage and premiums every year, and the fit between your plan and your actual prescriptions can shift without you noticing. Open enrollment runs mid-October through early December. Use the Medicare Plan Finder at medicare.gov and compare what’s available.

Is the Social Security trust fund really going to run out?

The reserves are projected to run out around 2032, at which point incoming payroll taxes would cover roughly 80% of scheduled benefits. That’s a potential 20% cut, not a program shutdown. Congress has fixed this before, in 1983.

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