Even Retired Millionaires Still Qualify for These 5 Government Benefits

24/7 Insights

• • Even millionaires can receive government benefits.
  • Medicare is one of the best benefits available regardless of net worth.
  • Millionaires can defer Social Security until age 70 to maximize their monthly check.
  • Also: 2 Dividend Legends to Hold Forever

Reaching millionaire status solves a great many financial problems. What surprises many high earners, though, is that wealth alone does not disqualify you from several valuable government programs. Whether it is Medicare, Social Security, or favorable tax treatment on long-term investments, these benefits exist regardless of your net worth. Here is a look at five that every retired millionaire should understand.

This post was updated on October 27, 2025 to clarify that Social Security benefits are taxed at 85% for high-income individuals, details regarding Medicare part A, Roth IRA rules, and specifics on taxing long-term investments.

1. Social Security Benefits

Social Security is an earned benefit, not a welfare program, so your accumulated wealth has no bearing on whether you qualify. You contributed payroll taxes throughout your working years, and those contributions translate into a monthly benefit once you claim. For higher-income recipients, up to 85% of benefits may be included in taxable income, but the payments themselves are still yours to collect.

The strategic question for a retired millionaire is not whether to claim, but when. Benefits can start as early as age 62 at a reduced amount. Waiting until age 70 increases the monthly check by 8% for each year deferred past full retirement age, and the delayed retirement credit stops accumulating at 70. For 2026, the maximum monthly benefit for someone who claims at 70 reaches $5,181, assuming a full 35-year earnings history at or above the Social Security taxable wage base of $184,500. Someone who does not need Social Security for everyday expenses can use that deferral period to let compounding work inside other accounts, then collect the larger check for the rest of their life.

2. Medicare

Medicare is often confused with Medicaid, but the two programs serve different populations. Medicaid is income-based; Medicare is an age-based entitlement open to all U.S. citizens once they reach 65, regardless of net worth. The government-sponsored coverage encompasses hospital stays, physician services, prescription drugs, and more.

Higher income does come with a cost. The Income-Related Monthly Adjustment Amount (IRMAA) is a surcharge layered on top of standard Part B and Part D premiums for enrollees whose modified adjusted gross income exceeds certain thresholds. For 2026, the standard Part B premium is $202.90 per month, and IRMAA surcharges kick in when individual MAGI exceeds $109,000 (or $218,000 for joint filers). IRMAA is calculated on a two-year lookback, so 2026 surcharges are based on 2024 income. At the highest income tier, total Part B premiums can reach $689.90 per month for 2026.

Medicare Part A, which covers inpatient hospital care, carries no monthly premium for most enrollees. Premium-free Part A requires you or your spouse to have paid Medicare payroll taxes for at least 40 quarters (10 years) of work. High earners who maintained steady employment typically clear that threshold well before retirement. Many wealthy retirees also carry supplemental coverage such as a concierge medical practice or a Medigap policy, but Medicare still functions as a meaningful safety net behind those arrangements.

3. IRA and 401(k) Withdrawals

Traditional IRAs and 401(k)s allow contributions to grow tax-deferred throughout your working years, and that deferral applies regardless of how much you ultimately accumulate. Both account types work the same way for millionaires as for anyone else: withdrawals before age 59.5 generally trigger a 10% early withdrawal penalty on top of ordinary income taxes, while withdrawals taken at or after 59.5 are penalty-free, though they are still taxed as ordinary income.

The more consequential rule for high-net-worth retirees involves Required Minimum Distributions. Under the SECURE 2.0 Act, RMDs begin at age 73 for those born between 1951 and 1959, and at age 75 for anyone born in 1960 or later. Each year’s RMD is calculated by dividing the prior December 31 account balance by an IRS life expectancy factor. For a wealthy retiree with substantial balances, those mandatory withdrawals can be large enough to push income into a higher bracket, trigger additional IRMAA surcharges, or increase the taxable portion of Social Security. Consulting a financial advisor well in advance of your RMD start date gives you the most flexibility to restructure accounts and soften the tax impact.

Roth IRAs operate under a different set of rules. Original account owners are never subject to RMDs during their lifetime, and qualified withdrawals are fully tax-free. Converting traditional IRA or 401(k) balances to a Roth in the years before RMDs begin is a strategy many high-net-worth retirees use to manage their long-term tax exposure.

4. Health Savings Accounts

Health Savings Accounts remain one of the most tax-efficient tools available to anyone enrolled in a qualifying high-deductible health plan (HDHP), and income or net worth does not limit eligibility. Contributions go in pre-tax, the invested balance grows tax-free, and qualified withdrawals for medical expenses come out tax-free as well. That triple tax advantage is particularly valuable for high earners who would otherwise pay the top marginal rate on investment income.

For 2026, the IRS allows contributions of up to $4,400 for self-only HDHP coverage and $8,750 for family coverage. Account holders age 55 or older who are not yet enrolled in Medicare can add a $1,000 catch-up contribution on top of those limits. One critical rule: HSA contributions must stop once you enroll in Medicare. However, funds already in the account can still be used tax-free for qualified medical expenses, including Medicare premiums, copays, and prescription costs. For millionaires who want to build a dedicated health care reserve before Medicare enrollment, maxing out an HSA each year is a straightforward and fully legal way to reduce taxable income in the process.

5. Capital Gains Tax Treatment on Long-Term Investments

Preferential treatment for long-term capital gains is not restricted to middle-income investors. Any asset held for more than one year qualifies for the lower long-term rates, which top out at 20% regardless of total income. That stands in contrast to ordinary income tax rates, which can reach 37% for top earners. High-net-worth individuals who can afford to leave positions intact rather than rebalancing frequently benefit the most from that differential, since they often have no urgent need to liquidate.

There is an additional layer to account for. High earners also owe the 3.8% Net Investment Income Tax on investment income above certain thresholds, bringing the effective ceiling on long-term capital gains to 23.8%. Even at that combined rate, the long-term treatment remains meaningfully cheaper than what the same dollars would cost if treated as ordinary income. For retired millionaires who manage large taxable portfolios, timing realizations carefully and coordinating capital gains with other income sources can reduce the annual tax bill significantly.

Editor’s note: This update added 2026 figures for the Social Security maximum benefit at age 70 ($5,181/month), the Social Security taxable wage base ($184,500), the standard Medicare Part B premium ($202.90/month), the IRMAA income thresholds ($109,000 single/$218,000 joint), and updated HSA contribution limits for 2026 ($4,400 self-only, $8,750 family). The RMD section was expanded to reflect the SECURE 2.0 Act’s two-tier starting ages (73 for those born 1951 to 1959, 75 for those born 1960 or later).