Dear Professor Kotlikoff, Let me first thank you for producing and selling at a bargain price the Maximize My Social Security (MMSS) software and for your book Get What's Yours. These have been of immeasureable help to me in trying to review my Social Security options. My personal situation is unique and complicated in several ways with regard to the decisions surrounding enrolling in Social Security. I would appreciate your advice. Following is a summary of my personal circumstances:

My Age: 66 (born Nov. 1953)
Marital Status: married
Wife's Age: 57 (born May 1962)
Children: twin boys aged 12 (born March 2008)
Health Insurance: High Deductible Health Plan (HDHP)

As a participant in a HDHP, I maxed out the annual voluntary contribution to the HSA in January 2020. I purposely have not enrolled in Medicare Part A to preserve the tax deductability of my HSA contribution. The MMSS Maximized Strategy recommends I take Social Security now. On page two of the print out, however, it warns that "Contributions to HSAs are not tax deductible once an individual is covered by Medicare Part A." It points out that enrollment in Social Security automatically triggers enrollment in Medicare Part A. "If already past 65, Medicare Part A coverage begins retroactively 6 months before the date you apply for Social Security benefits (though no earlier than the month you turned 65)."

Following is copied from the My Social Security website

Your Benefit Applications
Benefit Type Level Date Started Status More Info
Retirement Initial 11/22/2019 Unsubmitted Get Re-entry Number

My question is, if I apply for Social Security benefits in August 2020 (factoring in the 6 month retroactive enrollment in Medicare), will I be able to preserve the deductibility of my January contribution to the HSA?

Thank you in advance for your assistance.

Hi,

That's actually a tax question, and this forum is intended to answer Social Security questions. Our understanding is that contributions to an HSA (Health Savings Account) are not deductible for tax purposes starting with your first month of entitlement to Medicare. You'll probably want to check with the IRS regarding treatment of the contribution you made in January, though, especially if it represents an annualized amount.

I can confirm that since you are already over age 65, if you apply for your Social Security retirement benefits in August 2020 you will be automatically enrolled in Part A of Medicare effective February 2020.

Best, Jerry