Understanding all there is to know about military and government benefits is important for preparing for retirement, transition, and financial independence. In the previous article on this topic, we discussed SBP, VA Benefits and life insurance. In this article, we will focus on Social Security, TRICARE, other healthcare, and Medicare and TFL, all of which are important to understand in working toward your family’s well-being and financial independence.
Social Security
While you and your servicemember are preparing for military transition, it is also a good time to understand the benefits available when you are eligible for Social Security (SS). Social Security is a federal retirement benefit available to workers who have accrued 40 quarters (10 years) of work credits. If you paid into Social Security, you may be eligible for your own benefit based on your Primary Insurance Amount (PIA). You can draw your Social Security benefit at three stages:
- Early, at age 62, drawing early means your benefit will be permanently reduced.
- At your Full Retirement Age FRA, which, if you were born after 1959 is now age 67.
- Wait until you are 70 when you will be required to draw your benefits. You’ll earn 8% delayed retirement credits for each year you delay drawing your benefits past your FRA.
But even if you did not qualify for your own, you will be eligible for a spousal Social Security benefit, when the main wage earner has started receiving their own SS benefits. Your spousal benefit is 50% of the PIA of the main wage earner and is reduced if you take it before your FRA.
In addition, upon the death of your spouse, the survivor benefit will be 100% of your spouse’s PIA if you have reached your FRA, and a reduction of up to 71-1/2% if you take it at age 60. If you become entitled after your FRA, you will receive the same benefit of your deceased spouse including the delayed retirement credits. If your own benefit is greater than the retiree’s benefit, then you would continue receiving only your benefit.
You can track your Social Security benefits online, whether you are currently receiving benefits or not. Visit ssa.gov/myaccount/ to create a my Social Security account.
With an online account, you can request a replacement Social Security card; track and verify earnings and get estimates about future benefits; check the status of your application, and obtain a letter with proof of your benefits. There is even a resource to calculate benefits for a current or former spouse based upon your own.
TRICARE
At retirement, one of the decisions you will need to make is which health insurance provider you’ll use. You may have the option to get coverage through your retiree’s post-military employer healthcare plan or you could choose to continue with TRICARE, which offers two options: TRICARE Prime and TRICARE Select. Learning more about TRICARE can help you make a more informed decision on which option will ultimately be best for you. You should be aware that TRICARE rates, enrollment fees, deductibles, co-pays and more are evaluated and can change annually. Information about your TRICARE benefits are available at tricare.mil/.
There are similarities and differences between TRICARE benefits for your active-duty family compared to for a retiree and dependents, mainly with regard to enrollment fees required, deductibles and co-pays or cost shares. You will also need to pay close attention to where you receive care to ensure that the providers you choose are in network for your chosen plan to avoid more expenses.
Your retiree will need to contact TRICARE within 90 days of retirement to enroll. Outside of this opportunity, enrollment occurs during annual open enrollment, generally mid-November to mid-December or following a qualifying life event (QLE).
Other Healthcare Options
Throughout your family’s military service, your healthcare coverage was by TRICARE. If your service member is separating rather than retiring, that coverage will end 90 days after the separation date. It is important to make use of your time prior to separation to learn what your options for healthcare will be. You or your spouse may be able to secure healthcare coverage through a post-military employer. In the event there is an employment gap or other circumstances, two programs are available for those that qualify: Transitional Assistance Management Program (TAMP) provides 180 days of healthcare coverage under TRICARE benefits, and the premium-based Continued Health Care Benefit Program (CHCBP) which gives temporary healthcare coverage for 18 to 36 months when you lose TRICARE coverage. Visit tricare.mil/LifeEvents/Separating for more information.
Medicare and TRICARE for Life When You Turn 65
When you and your spouse turn 65, there will again be some changes to your healthcare coverage. Thinking about these changes ahead of time will help you more easily prepare once the time comes. If you or your spouse uses TRICARE (Prime or Select) for healthcare coverage, when you turn 65 you must enroll in Medicare Part B and , TRICARE coverages will change to TRICARE for Life (TFL). At this time, Medicare becomes your primary healthcare provider and TFL becomes your secondary provider.
How does this work? You will be notified by Medicare about 3 months before your 65th birthday of your eligibility to enroll in Medicare Part B (healthcare coverage). For many, Medicare Part A (hospital coverage) is covered through your Medicare deductions while you worked. Medicare Part B requires premium payments, which are based on your annual federal income tax returns. This will be required for the person turning 65 and will not be required for your spouse until their age 65.
At this point, in order to maintain your TFL you must enroll in Medicare Part B which requires you to pay the monthly premium. Medicare will be your primary healthcare coverage and TFL will be secondary. To avoid late enrollment penalties and gaps in your healthcare coverage, you must enroll in Medicare Part B. This is especially true if you are a spouse who did not work outside the home and did not accrue the necessary work credits. You will be enrolling based on the main wage earner’s information. For more information about Medicare Part B costs, enrollment options and other information, visit medicare.gov/.
If you intend to live or travel overseas, you should know that Medicare only covers you within the United States and U.S. Territories. You still must carry Medicare Part B even if you live outside of the U.S.
TFL coverage is available worldwide and will be your primary payer outside of the U.S. To ensure you have this coverage, you will be responsible for paying TRICARE’s annual deductible and cost shares. To learn about TRICARE coverage, visit: tricare.mil/Plans/HealthPlans/TFL.
For additional information on FEDVIP and understanding education and employment benefits, please see part 3 of this series.
You’ll also want to download the AAFMAA Military Transition Timeline to assist you in planning for your transition to civilian life.
As always, we’re here to assist you throughout your military journey. If you have any questions or need our assistance with your military benefits, an AAFMAA Member Benefits representative can help. Call 888-961-4573 , select option 2, then option 2 again; or email [email protected].