Consider similar strategies if it might help you stay below the $85,000/$170,000 limit to benefit from hold harmless.


November marks the start of annual health care enrollment time for most public and private health plans. It’s also the time when many people revisit or establish a Health Savings Account (HSA). These are a terrific resource for saving and investing to cover medical expenses starting at age 65. Be aware, however, that the rules change once you hit that age. The one that surprises people most: If you are 65 and taking Social Security benefits, you are automatically enrolled in Part A of Medicare. And once you are participating in any form of Medicare, you are ineligible to contribute to an HSA. This is a gotcha that has blindsided more than a few investors with good intentions for covering health costs later in life.


If you’re thinking of retiring prior to Medicare eligibility at age 65, and you find that your health care premiums are expensive, one “unadvertised” option Social Security provides is the ability to take then suspend your checks once you reach full retirement age (FRA). In other words, you could collect Social Security retirement benefits at age 62 to help pay for those pricey health care premiums. Then, once you reach FRA, you can tell the SSA to stop sending those checks and start earning your “raise.” This is a little-known way that you can use your earned benefits to help with higher health care premiums between ages 62 and 65. (Of course, if your FRA is 66, you’d have to collect your retirement benefits for another year before you can suspend.)

Another handy tip: If you end up going back to work after starting to collect Social Security benefits, you have one year to change your mind. Why would you want to do this? Perhaps you are earning too much, such that it lowers or precludes a Social Security check. The government will bill you for the Social Security money you were paid, but you’ll again be able to let your Social Security income grow. This may or may not be the best approach for you, but it’s a consideration worth discussing with your financial advisor, as your checks will be larger the longer you wait.

For more on health care considerations for retirees or those nearing retirement, read my related blog post Health Care: The Stealth Retirement Expense.


Rob Kron, Managing Director, is the head of Investment and Retirement Education for BlackRock’s U.S. Wealth Advisory group. He provides practical information on topics that are important to every saver and investor of every age.