Most people who use online retirement or Social Security programs come to the incorrect conclusion about when to start their first payment for Social Security benefits. For starters, the raw data from for specific ages may mislead first-time filers on the size of their Social Security checks. Worse are the values for spousal benefits.

People need to understand the relationship between Social Security and Medicare. The fact that Social Security is subject to a reduction from Medicare premiums is unknown to many people planning for retirement. They think that their Social Security paycheck will be what appears on the SSA report for various ages. A low earning spouse may get up to 50% of the high earning spouse’s full-retirement-age Social Security, but both spouses have the same Medicare reductions. That means that the low earning spouse’s benefit gets hit extra hard by the Medicare reduction percentage wise.

It isn’t just the fact that Social Security payments are reduced by Medicare premiums. It’s also because Medicare costs have increased at a faster rate than the Social Security inflation adjustment, as the Senior Citizens League attests on beating inflation:

“The Senior Citizens League analyzed typical expenses for older adults this spring and found that, while overall inflation has remained low in recent years, other costs are climbing at a sharper rate. From 2000 to 2014, for example, monthly Medicare Part B premiums grew 131%; during that same period, the Social Security cost-of-living adjustment increased benefits just 41%.”

The net pay from Social Security has grown at a much slower rate than 41%. Suppose a spouse now gets $600 gross spousal benefit from SS and has a $105 premium deduction for Medicare Part B leaving a net of a $495 paycheck. In 2000, the gross Social Security was $425 and the deduction for Medicare was $45 netting $380. That means the net increased from $380 to $495, a 30% increase. This is far from the 41% increase in prices over the same period.

It’s even worse for anyone who has Part D Medicare for drugs or is a higher income person who pays more than three times as much for Medicare Part B or has to take out income tax. About half of the gross Social Security is subject to income tax for middle income people, but 85% is taxable for higher income people.

A person who has a full-retirement-age (around 66) benefit of $1,000 would get $1,320 at 70. That’s a 32% increase in gross benefit. But the net benefit after considering a Medicare reduction of $105 is 36% higher for someone starting at 70 rather than 66. Spousal benefits are between a third and a half of the primary earner’s full-retirement-age benefit, so subtracting Medicare costs (which are the same for both spouses) from the spousal benefit is even more painful. Some readers with higher income will have Medicare Part B and D costs totaling $405 instead of $105 for low-income retirees.

Many people believe that the amount of money they will get from Social Security over their retirement isn’t any different whether they start at 62 at a lower value or start at 70 at a higher value. That’s because the differences in gross Social Security for different ages to start were actuarially determined to be the same up to a unisex death age of approximately 80 years old. However, life-expectancies have increased significantly meaning far more people are going to live beyond 80, especially women. And, as mentioned, the actuarial computation is based on the gross, not net, payments from Social Security.

The gain from delaying the start of Social Security is even higher for those with a spouse that can benefit from Social Security’s quirks; using suspend, file and suspend, or file a restricted application strategies.

Warning: When using a retirement planning program, be sure to input the net value for Social Security after accounting for Medicare deductions, not the raw number you read from the SSA report. Failure to do so can terribly mislead people about retirement income as well as the best age to start Social Security, particularly those with a spouse.

The lifetime income gains from Social Security are correctly said to provide the lowest cost longevity insurance available. With longer lives and taking into account Medicare deductions, it’s almost a sure bet, not a 50/50 one, to delay that first payment. That’s just another reason to be very careful when choosing a Social Security strategy.

The absolute minimum savings for retirement should be to have savings enough for retirement support before a delayed start of Social Security to the full-retirement-age (66-67) or, even better, 70.

And it’s also advisable to have a year of retirement living expenses set aside as an emergency reserve. There are many uncertainties in retirement planning. The list is endless. Don’t let an unplanned event, such as a medical emergency, new roof or major car repair take you by surprise.