Are Social Security and Medicare Rules Hard to Understand?

[Mimosa]

I'm a baby boomer who doesn't understand exactly how Social Security, SSI or Medicare work. I'm about 9 or 10 years away from 66, not to mention 67). The rules seem complicated.

http://www.ssa.gov/pubs/retirechart.htm

If a person starts taking benefits at age 62, are they permanently locked into the smaller payments? If they are still working -say the person is self-employed with a variable income- would she receive monthly Social Security checks and pay taxes as if that is income? Or would the SSA send less money?

I don't think the guidelines are explained well on the Social Security website.

[napi21]

1. If you retire early, yes, ou are permanently locked into lower cash payments.

If a person continues to work, either self employed or for someone else, tey do continue to pay SS/MC premiums. I filed fo SS 2 years ago, one year befre I was 67, and I get $100/mo. less than my husband who was forced to work a few months more than his req. 67 to wait until I was eligible for Medicare. We couldn't afford for him to retire and still pay private ins.. premiums for me.

If you have any other things you don't understand about SS or MC, there is a tollfree phone number you can call, and everyone I've ever spoken to has been very nice and very knowledgable.

[Silver Swan]

2. If you become entitled to Social Security

before full retirement age, which is now age 66, your benefits are subject to deductions if you are working and earning over the allowed amount, which varies every year. However, your benefit could be increased if your current earnings exceed your earnings, or your indexed earnings in an earlier year that was included in the computation of your benefit amount. And at full retirement age, the reduction for taking benefits before full retirement age will be recomputed to eliminate the reduction for any month for which you did not receive a benefit because of your work and earnings.

The wages or self-employment income are subject to Social Security tax, whenever they are earned.

[Mimosa]

3. That sounds complicated.

Being self-employed -as many people are in this economy- makes the Social Security situations variable...and complicated. :7

[jwirr]

4. It is very complicated because they wrote it to cover a lot different

kinds of situations.