Turning 65 is a major milestone and is both looked forward to and feared by many. At age 65, you are considered elderly and become known as a “senior citizen.” By being a senior citizen, you become eligible for a lot of government benefits and programs and have to begin to think deeply about retirement. There is a lot of information to digest about such parts of your retirement years as Medicare, Social Security benefits, property tax breaks, and senior discounts. The age of 65 is not simply a time to relax completely. It also helps to have some idea of what you’re going to do for the rest of your life.
Medicare at 65 involves some research, as many considerations need to be taken. You can start enrolling in Medicare during the period between the three months before you turn 65 and three months after you turn 65. If you are already receiving Social Security benefits, you are automatically enrolled. Medicare is divided into Medicare Part A (hospital insurance) and Medicare Part B (medical insurance). You can hold off on enrolling in Medicare Part B if you or a spouse are still working and are receiving medical coverage from your employer. However, it comes with the risk of paying higher premiums and a late enrollment penalty if you want to enroll later, as well as your Part B coverage being delayed and leaving a gap in your coverage.
Social Security Benefits
You have the option to start receiving Social Security benefits at age 65. Officially, you can begin to file for Social Security at 62, but you can’t get your full monthly Social Security benefits unless you reach the full retirement age. The full retirement age can be between ages 66 and 67, depending on the year you were born. If you file at 65, you can reduce your benefits from 6.67% to 13.34% a year. However, you can delay filing for Social Security after your full retirement age and receive delayed retirement credits that increase your monthly retirement benefits until you reach 70. After reaching age 70, there is no incentive in delaying your benefits.
Property Tax Breaks
Once you reach age 65, you may be eligible for property tax breaks. The sort of exemptions, deferrals, and deductions that a senior is eligible for depends from state to state. Some states are more thoughtful than others. Wyoming has an average property tax of $635 per $100,000 in home value, one of the lowest in the nation and is very tax-friendly to seniors. Wyoming has no income, estate, or inheritance tax and is generous with property tax breaks for seniors.
On the other hand, other states may not be so tax-friendly to seniors and retirees. Nebraska has an average property tax of $1,855 per $100,000 in home value, one of the highest in the nation. Nebraska also taxes Social Security benefits, IRA withdrawals, 401(k) funds, and pensions. Depending on where you live, the property tax may be low or high when you reach 65.
You become eligible for a host of senior discounts when you reach the age of 65. Many companies offer senior discounts when you turn 65. You are likely to get perks such as cheaper restaurant meals, cheaper tickets at movie theaters, and lower rates at hotels. Seniors are also eligible for free or very cheap college classes. Many colleges offer senior citizens tuition waivers or allow them to audit courses for free or at a reduced rate. There are also many colleges that offer affordable classes to senior citizens and retirees.
Turning 65 in America is not so simple. There is a lot of planning that you have to do and a lot of factors to account for when you turn 65. From Medicare to Social Security to taxes to other benefits like senior discounts and free college, there are many financial gains to obtain from it. However, this can all be impacted by your employment, the year you were born, and the state you live in.