Full retirement age is 70 and you pay Medicare Part B premiums, not taxes

I am convinced that one reason it is so hard to solve social/government problems is the wide diversity in perceptions. For example, the Social Security full retirement age is based on your year of birth. That is perhaps age 67 when you can claim an unreduced benefit, right?


A pension plan typically provides a benefit based on a combination of service with the employer and earnings as defined by the plan. Once you reach a certain age you can retire with a reduction for early retirement. Once you reach age 65 – typically – you can retire with your full accrued pension. Generally, you only receive a higher benefit thereafter because you have higher earnings and longer service used in your calculation.

On the other hand, our perception for Social Security is that benefits are reduced if you collect before full retirement age and increased if you delay. A more realistic way to look at it is your benefits are reduced for each month you begin to collect before age seventy. Age 70 is actually the full retirement age because benefits are reduced below that age for everyone.

Medicare Part B charges a premium for the insurance. In the aggregate the premium revenue is intended to be 25% of the total cost. The balance comes from general revenue. A few beneficiaries – about 7% – pay more because they have a high income. In order to pay a Income-Related Monthly Adjustment Amount (IRMAA) premium in 2023 a retired couple income must exceed $194,000. Other brackets apply to higher incomes. The brackets are adjusted annually for inflation.

Some of those – perhaps many – who pay IRMAA premium see them as unfair even though their retirement incomes are several times higher than other retirees and all American households.

Many insist the higher premiums are nothing more than added taxes and surcharges. In fact, they are income-based premiums similar to what 20% or so of large employers use for their employee health insurance. Higher income retirees employ all types of strategies in an effort to avoid IRMAA premiums.

Medicare premiums, including IRMAA premiums are tax deductible as a health care expense under the IRA rules and given no federal taxes are deductible for individuals, by definition IRMAA premiums cannot be taxes.


  1. “A more realistic way to look at it is your benefits are reduced for each month you begin to collect before age seventy. Age 70 is actually the full retirement age because benefits are reduced below that age for everyone.”
    Actually it would be better to say full retirement age is 62 and every year you delay you get an increase. Of course either way will require SS to re-formulate FRA amount. That will of course cause more social media outrage. And more for Mr Quinn to rant about.


  2. Thank you. The question I get most often is, when are they going to pay back the money they stole?

    Apparently this guy is the source of all the agita. Looks like he made a career of it.

    Allen W. Smith

    The last time someone debated this on a blog, I asked them to give me the name of just one well known economist who agrees. I got nothing.

    Incidentally learned this guy is the author of economics textbooks used in high schools across the country, FWIW.


    1. Actually as you know nobody stole any money. In fact, it’s being paid back now as the bonds are being redeemed not to mention the interest paid to the trust each year.


  3. You nailed it. This is the correct way to view Social Security retirement age. The choice whether to wait until 70, or begin taking distributions earlier will be influenced by myriad personal reasons. And you’ve clarified the difference between income based premiums and taxes. How we frame any issue will help us to make wise decisions. I hope you submit this one to Humble Dollar.


  4. This is the first time I read that age 70 is the “full retirement” age. It is not on the Social Security personalize reports, my states age 67.

    I really don’t believe that there is a full retirement age until you pass Social Security’s actuarial age of death for your given year. In most cases for my age, it doesn’t matter whether I start collecting Social Security at age 62 or age 70, I will receive the same total dollar amount paid out to me over the years by age 78 and 8 months (the last time I calculated). This is also about the same time that actuarial tables say I would die being born in 1962.

    The only difference is the size of the monthly check. Smaller checks for more years if I start collecting early, larger monthly checks with less time to collect if I start collecting later.

    Now I have never looked into how I would get paid if I waited until age 77, but I assume that they would be very big checks (if they are even allowed to do that). In reality, every year earlier that you start your benefit, it is reduced with that total sum of a max benefit being completed by the time you are expected to die per the actuarial tables.


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