8

If I am retired for the last 5 years, and I have Medicare, why do I still have to pay Medicare payroll deductions if I continue working?

Ben Miller
  • 116,785
  • 31
  • 330
  • 429
Ubaldo Gutierrez
  • 105
  • 1
  • 3

2 Answers2

27

This is something that many people misunderstand.

Nearly everyone who works in the U.S. is required to pay Social Security and Medicare taxes (sometimes called payroll taxes or FICA). These are not a savings plan, and the money you pay is not going into an account with your name on it. This money is used to pay for the benefits of the current retirees/beneficiaries. When you retire, the benefits you get will be paid for by the workers that are still working and paying that tax.

You may be receiving benefits, but you are also still working, so you still have to pay the tax.

Ben Miller
  • 116,785
  • 31
  • 330
  • 429
-3

The Medicare deduction you see is a tax, not a monthly premium you are paying for your own Medicare coverage.

JayJay
  • 113
  • 2