Your Medicare Choice Might Be Permanent – Here’s What to Know (with Medicare Specialist Andrew Mersereau)

Posted on June 18, 2025June 19, 2025 by Brian Colvert

When it comes to your Medicare choice, the decisions you make at age 65 (or even slightly before) can have long-lasting consequences. Yet many end up choosing a plan based on general advice, slick marketing, or a brief conversation with their benefits department.

To help cut through the confusion, we sat down with Andrew Mersereau, a Medicare specialist with over 24 years of experience guiding individuals through enrollment, plan selection, and strategy. Andrew is known for his no-nonsense, education-first approach to Medicare and has helped countless clients avoid costly mistakes.

Today we’re breaking down everything you need to know to make a confident, well-informed Medicare choice that fits your needs, especially if you’re financially secure, still working at 65, or considering a Roth conversion or property sale that could spike your income.

Let’s dive in.

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What Is Medicare, Really?

Before diving into strategies, it’s helpful to revisit the basics. Medicare is a federal health insurance program for people 65 and older, as well as some younger individuals with disabilities. But “Medicare” isn’t one plan, it’s a collection of parts:

Part A: Hospital coverage (inpatient)
Part B: Medical coverage (outpatient care, doctor visits, preventive services)
Part C: Medicare Advantage plans offered by private insurers as an alternative to A and B
Part D: Prescription drug coverage

Original Medicare (Parts A and B) is provided by the federal government. To cover additional costs and services, many people add Part D and either a Supplement (Medigap) policy or an Advantage plan.

The Big Decision: Supplement vs. Advantage

This is the crossroads most people face, and it’s not as straightforward as it seems.

Medicare Advantage (Part C)

Medicare Advantage plans are offered by private insurance companies and typically include Parts A, B, and D bundled together. These plans often tout extra perks like dental, vision, gym memberships, or transportation to doctor visits.

But those extras come with trade-offs. Advantage plans often:

Have narrow provider networks
Require referrals for specialists
Use prior authorizations for many procedures
Limit care to a specific geographic region

These plans are appealing due to their low or zero-dollar premiums, but you may find yourself paying more out of pocket when you actually need care.

Medicare Supplement (Medigap)

Medigap policies work alongside Original Medicare to pay for out-of-pocket costs like coinsurance, copayments, and deductibles. They do not include drug coverage, so you’d add a standalone Part D plan.

Key benefits of Medigap plans:

See any provider in the U.S. who accepts Medicare—no referrals needed
No network restrictions
Predictable costs with limited out-of-pocket expenses

For frequent travelers, snowbirds, or anyone who wants maximum freedom in choosing providers, Medigap is often the better long-term choice.

“People often pick Advantage for the low monthly price, but later regret the restrictions,” Andrew warns. “Your Supplement choice may cost more monthly, but it gives you far greater control.”

Why Your First Medicare Choice Might Be Permanent

Here’s the part most people don’t realize: the choice you make when you first sign up, especially between Supplement and Advantage, can be extremely hard to reverse.

Under federal law, you’re guaranteed acceptance into any Medigap plan only during your initial enrollment period (usually the six months after you enroll in Medicare Part B). After that window closes:

Insurance companies can ask health questions
They can deny you based on preexisting conditions
Approval becomes much more difficult as you age or develop medical issues

Andrew says it plainly:

“In my experience, 80% of people who try to switch from Advantage to Supplement later are denied.”

This is why the decision you make when you first sign up is so critical. Switching may not be an option later.

IRMAA and Income Traps: What Affluent Retirees Need to Know

Medicare premiums aren’t fixed for everyone. If your income is high, you may be subject to the IRMAA (Income-Related Monthly Adjustment Amount). This surcharge applies to Parts B and D and is based on your Modified Adjusted Gross Income (MAGI) from two years prior.

Here’s what can trigger IRMAA:

Roth conversions
Selling a business or property
Large capital gains
Taking large IRA distributions

A Common Scenario:

Janet, 64, sells her investment property and earns a $300,000 gain. Two years later, she’s shocked to find her Medicare premiums more than double, she’s now in an IRMAA tier that costs her over $500 more per month.

These are avoidable surprises, but only with proper planning.

Still Working at 65? Don’t Assume You Can Delay Medicare

Many people working past 65 wonder if they can delay Medicare enrollment. The answer: only if you have credible employer coverage.

Your plan must:

Cover 20 or more employees
Be deemed creditable by Medicare
Meet specific drug coverage standards

If it doesn’t, and you delay enrolling, you may face lifetime penalties based on your Medicare choice.

Mersereau’s advice: always confirm with HR in writing that your coverage meets Medicare’s standards, and compare your total healthcare costs before making a decision.

Important: If you’re still contributing to a Health Savings Account (HSA), enrolling in any part of Medicare makes you ineligible to keep contributing.

Medicare Doesn’t Cover Everything. Here’s What’s Missing:

Even the best Medicare plans don’t cover everything. Here are the biggest gaps that surprise people:

Hearing aids
Routine dental care
Eyeglasses and eye exams
Long-term care (like assisted living)
Home modifications or private-duty nursing
Unlimited rehabilitation or therapy

You may need private insurance, Medicaid, or a long-term care policy to bridge these gaps. Supplement plans won’t help with most of these either, they’re for traditional medical expenses only.

For Snowbirds and Travelers: Choose Wisely

If you live part of the year in Florida and the rest in Colorado, or travel often, your plan choice is especially important.

Advantage plans are often limited to regional networks, so out-of-state care may not be covered. Supplement plans allow access to any Medicare provider in the country, making them ideal for travelers or dual-state living.

Timeline: What to Do at 63, 64, and 65

Turning 65 is a major milestone, not just for birthdays, but for healthcare decisions that can impact your financial future. To help you stay ahead of deadlines and avoid costly missteps, here’s a step-by-step timeline of what to focus on at ages 63, 64, and in the months leading up to your Medicare choice and enrollment.

Age 63:

Begin tracking your income to anticipate IRMAA brackets
Evaluate if Roth conversions, property sales, or business exits are better done now
Schedule a financial planning session to model different Medicare scenarios

Age 64:

Research Medicare basics using Medicare.gov
Make a list of your doctors and medications to compare plan compatibility
Talk to a Medicare specialist or broker, ideally one who is fee-transparent and non-commission focused

3-6 Months Before Turning 65:

Enroll in Medicare Parts A and B via Social Security
Choose either a Supplement and Part D or an Advantage plan
Get proof of credible coverage from your employer if you’re deferring enrollment

Red Flags to Watch For

Too-good-to-be-true Advantage ads
“Free this” and “zero-dollar that” often hide tight restrictions and surprise bills.
Advice from friends
Everyone’s situation is different. What works for one person could be a disaster for another.
Brokers pushing one plan type
A good broker will help you compare, not sell you the highest-commission product.
Skipping Part D because you take no meds
This can result in penalties later. It’s often smarter to enroll in the lowest-cost plan anyway.

FAQ: Quick Medicare Questions Answered

Q: Is it ever smart to go with just A and B?
A: Rarely. Without a Supplement or Advantage plan, your out-of-pocket costs are unlimited.

Q: Can I change my mind later?
A: With drug plans (Part D), yes. With Supplement plans, possibly, but you may be denied.

Q: What if I have a concierge doctor?
A: You can keep them, but you’ll still need A and B, plus coverage for hospitals, specialists, and serious illnesses.

Q: Does my state affect my ability to switch plans?
A: Yes. Some states have more lenient rules, but most follow the six-month initial enrollment protection rule.

Final Thoughts: The Smartest Move is an Educated One

Andrew Mersereau emphasizes that education, not advertising, should guide your Medicare choice.

“Don’t just follow an ad or assume what worked for a friend will work for you. Take the time to understand what you’re buying and why.”

And remember, using a Medicare broker doesn’t cost you extra. Rates are set by law, and a good broker can help you avoid expensive mistakes.

Whether you’re helping a parent, preparing for your own retirement, or simply curious about your options, the takeaway is clear: Medicare isn’t something to wing. It’s a decision that affects your access to care, your costs, and your peace of mind for years to come.

Need help navigating Medicare?

You can contact Andrew’s team at 719-955-4991. They offer education-driven guidance with no pressure.

Healthcare in Retirement: What You Need to Know to Plan Ahead

Posted on February 5, 2025February 3, 2025 by Brian Colvert

When people dream about retirement, they often picture traveling the world, spending more time with family, or picking up long-forgotten hobbies. What they don’t envision is the growing cost of healthcare and how it can quickly derail even the best-laid retirement plans. The reality is that Medicare doesn’t cover everything, and medical expenses tend to increase as we age. Without proper planning, these costs can become a major burden, potentially draining your savings and limiting your retirement lifestyle.

Today we’ll explore the key aspects of healthcare planning in retirement, including Medicare basics, long-term care, and smart strategies to manage medical expenses so you can enjoy your golden years with peace of mind.

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The Real Cost of Healthcare in Retirement

One of the biggest financial shocks retirees face is just how much they will spend on healthcare. A study from Fidelity estimates that a 65-year-old couple retiring today will need approximately $315,000 for healthcare costs throughout retirement. This number doesn’t even include long-term care expenses, which can be astronomical. Without a plan in place, these costs can quickly eat into your retirement savings, leaving you financially vulnerable.

Healthcare costs increase due to several factors:

Aging-related conditions – The older we get, the more medical care we need.
Rising healthcare inflation – Medical costs tend to increase faster than general inflation.
Gaps in Medicare coverage – Medicare is helpful but doesn’t cover everything, leaving retirees to cover additional costs out of pocket.

So, how can you prepare for these expenses? Let’s start with the foundation of retirement healthcare: Medicare.

Understanding Medicare: What It Covers and What It Doesn’t

Medicare is a federal health insurance program primarily for people aged 65 and older. While it provides essential coverage, it doesn’t pay for all healthcare expenses. Here’s a quick breakdown of the different parts of Medicare:

Medicare Part A (Hospital Insurance): Covers inpatient hospital stays, skilled nursing facility care, hospice care, and some home health care. Most people do not pay a premium for Part A.
Medicare Part B (Medical Insurance): Covers outpatient care, doctor visits, preventive services, and some home health care. There is a monthly premium for Part B.
Medicare Part D (Prescription Drug Coverage): Helps cover the cost of prescription drugs. Private insurance companies offer Part D plans.
Medicare Advantage (Part C): A private insurance alternative to traditional Medicare that often includes additional benefits like vision, dental, and hearing coverage.

While Medicare provides significant coverage, there are gaps, such as:

No coverage for long-term care – Nursing home stays or in-home caregiving are not covered under Medicare.
High out-of-pocket costs – Deductibles, copays, and coinsurance can add up quickly.
Limited dental, vision, and hearing coverage – Medicare does not cover most dental work, eye exams for glasses, or hearing aids.

The Hidden Costs of Medicare

Many retirees are surprised to learn that Medicare costs aren’t one-size-fits-all. If you have a higher retirement income, you could end up paying more for your Medicare premiums. Medicare uses a two-year lookback period to determine your Income-Related Monthly Adjustment Amount (IRMAA), which increases premiums for those with higher incomes.

Additionally, Medicare does not cover everything. Some of the biggest out-of-pocket expenses for retirees include:

Medicare Part B and D premiums – These increase if your income is above a certain threshold.
Medicare supplement insurance (Medigap) – Helps cover out-of-pocket costs but comes at an additional monthly premium.
Long-term care costs – Not covered by Medicare and can be financially devastating.
Prescription drugs – Depending on your medication needs, costs can vary significantly.

How to Plan for Healthcare Costs in Retirement

To avoid healthcare expenses derailing your retirement, it’s crucial to plan ahead. Here are some strategies to ensure you’re financially prepared:

1. Estimate Your Future Healthcare Costs

Understanding what you might spend on healthcare can help you plan accordingly. Consider your current health, family medical history, and potential long-term care needs when estimating costs.

2. Take Advantage of a Health Savings Account (HSA)

If you’re still working and have access to a Health Savings Account (HSA), it’s one of the best tools for saving for healthcare expenses in retirement. HSAs offer triple tax advantages:

Contributions are tax-deductible.
Growth is tax-free.
Withdrawals for qualified medical expenses are tax-free.

HSAs can be a powerful way to accumulate tax-free savings to cover future healthcare costs.

3. Consider a Medicare Supplement Plan (Medigap)

Since Medicare doesn’t cover everything, many retirees opt for a Medigap policy to help cover additional expenses like copayments, deductibles, and coinsurance. There are multiple plan options, so working with a financial advisor to select the right coverage is key.

4. Plan for Long-Term Care

One of the most significant and often overlooked retirement expenses is long-term care. Whether it’s assisted living, home care, or a nursing home, these services are expensive and not covered by Medicare. Some ways to prepare include:

Long-term care insurance – Policies help cover extended care costs but can be expensive.
Hybrid life insurance policies – Some life insurance plans offer long-term care benefits if needed.
Self-funding – If you have significant assets, you may choose to set aside money specifically for long-term care.

5. Optimize Your Retirement Income to Manage Medicare Costs

Since Medicare premiums are income-based, being strategic about your retirement income can help reduce costs. Consider:

Using Roth IRAs or HSAs to withdraw tax-free income.
Strategizing Social Security withdrawals to avoid pushing your income into a higher premium bracket.
Working with a CERTIFIED FINANCIAL PLANNER™, like us, to minimize tax liability in retirement.

Get Your Free Social Security & Medicare Guide

Planning for healthcare in retirement can feel overwhelming, but you don’t have to navigate it alone. We’ve created a free, comprehensive Social Security & Medicare Guide which is updated annually to help you understand your benefits, avoid costly mistakes, and make informed decisions about your healthcare coverage.

Final Thoughts: A Proactive Approach Pays Off

Healthcare is one of the most significant financial considerations in retirement. Without a plan, it can quickly drain your savings and force difficult financial decisions. By understanding Medicare, estimating costs, and implementing strategies like HSAs and long-term care planning, you can protect your retirement savings and enjoy the retirement you’ve always envisioned.

The key takeaway? Plan for it, plan for it, plan for it. The best time to prepare for healthcare costs in retirement is before you need them. Don’t let medical expenses catch you off guard—take action today.

If you’re looking for personalized guidance on planning for healthcare costs in retirement, we are here and happy to help. Schedule a complimentary call with us today.

The Health Savings Account: Navigating Healthcare Costs

Posted on May 1, 2024January 19, 2025 by Brian Colvert

One of the most disruptive elements to any well-crafted financial plan is the unpredictable nature of medical expenses. Enter the Health Savings Account (HSA), a powerful tool that can change how you manage and mitigate healthcare costs both now and in retirement. Tune in to the most recent episode of The Field Guide Podcast, with Brian Colvert, CFP® to learn about its unique benefits and how you can navigate the ever-changing terrain of healthcare costs with confidence.

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A Health Savings Account is like a supercharged savings account specifically designed for qualified medical expenses. They offer a powerful triple tax advantage, allowing you to save money on healthcare while maximizing your tax benefits.

Today we will dive into Health Savings Accounts, exploring their advantages, eligibility requirements, and how to determine if it is the right fit for you.

The Rising Tide of Healthcare Costs: Why Health Savings Accounts Matter

A crucial factor to consider when it comes to healthcare savings is the cost of inflation. Medical expenses have historically inflated at a rate significantly higher than general inflation. This means the cost of staying healthy is likely to increase substantially over time. Whether it is prescriptions, medical insurance insurance, surgeries, or whatever else might come along, the cost of medical care is going to cost more in the future. A Health Savings Account quite possibly is the best tool out there to help you cover these costs.

Unveiling the Power of HSAs: Triple Tax Benefits

HSAs stand out for their unique ability to offer a triple tax advantage. This means you get tax breaks at three crucial stages:

Contributions: When you contribute money to your HSA, it’s deducted from your taxable income. This can significantly reduce your tax burden in the year you contribute.
Growth: The money in your HSA has the potential to grow tax-free through interest or investments offered by some HSA providers.
Withdrawals: The best part? When you use your HSA funds to pay for qualified medical expenses, those withdrawals are completely tax-free.

Let’s break down an example to illustrate the power of this triple tax benefit. Imagine you earn $200,000 annually and contribute the maximum HSA contribution of $4,150 (Limit as of 2024- Click here to get the most current limits) in pre-tax dollars. Assuming a 25% tax bracket, you’d effectively save $1,037.5 on taxes right off the bat.

Now, let’s say your HSA earns a 2% annual interest rate. Over ten years, your pre-tax contributions and interest earned would grow tax-free. Finally, when you withdraw those funds to pay for qualified medical expenses, you won’t owe any taxes on the withdrawal.

This triple tax advantage makes HSAs a highly attractive option for individuals aiming to save for current and future healthcare needs while minimizing their tax burden.

Making Your HSA Work for You: A Long-Term Strategy

Let’s talk about how to maximize the benefits of your HSA. Here’s a strategy we recommend: think of your HSA as a health savings bank.

As of 2024, the annual contribution limit for HSAs is $4,150 for individuals and $8,300 for families (with an additional $1,000 catch-up contribution allowed for individuals over 55). Click here to get the most current limits That’s a significant amount you can save each year towards future healthcare needs.

Here’s the key: during your working years, while you likely have a steady income, aim to cover your current medical expenses directly. This includes premiums, doctor visits, prescriptions, and anything else that comes up.

The real power of HSAs lies in their long-term potential. Instead of spending your HSA contributions right away, contribute the maximum allowed and invest those funds within your HSA. This allows your money to grow tax-free over time.

Imagine consistently contributing close to the maximum HSA limit (around $8,300 with catch-up contributions) and achieving a reasonable growth rate over a decade. You could potentially accumulate over $100,000!

This creates a significant tax-advantaged pool of funds you can tap into during retirement. You can use these funds tax-free to cover various healthcare expenses, such as Medicare premiums, surgeries, prescriptions, dental care, or vision needs.

Think of it as a tax-free safety net for your healthcare needs in retirement. By letting your HSA contributions grow over time, you reduce your reliance on withdrawing funds from taxable retirement accounts like 401(k)s or IRAs. This can help minimize your overall tax burden in retirement.

Beyond Savings: The Flexibility of HSAs

HSAs offer more than just tax-advantaged savings. They provide flexibility in managing your healthcare finances:

Wide Variety of Uses: HSAs can be used to cover a wide range of qualified medical expenses, including deductibles, co-pays, coinsurance, prescriptions, contact lenses, dental care, acupuncture, weight loss programs, and even some over-the-counter medications. Remember: It’s always best to check with your HSA provider to confirm coverage for specific expenses.
Save for Future Needs: HSAs aren’t limited to immediate medical bills. You can use them to accumulate funds for anticipated future healthcare needs, such as major dental work, vision care, or elective procedures. This allows for proactive financial planning for your health.
Portability: HSAs are portable, meaning they remain yours even if you change jobs or insurance providers (as long as the new plan is HSA-compatible). This ensures continuity and control over your healthcare savings.

Who Qualifies for a Health Savings Account?

To be eligible for an HSA, you must meet two key requirements:

High-Deductible Health Plan (HDHP): You must be enrolled in an HSA-qualified High-Deductible Health Plan (HDHP). HDHPs typically have lower monthly premiums but come with higher deductibles – the amount you’re responsible for paying before your insurance kicks in. The IRS sets annual minimum deductible amounts for HDHPs to qualify for HSA contributions. For individuals in 2024, the minimum deductible is $1,400, and for families, it’s $2,800.
Minimum Health Coverage: You cannot have any other health insurance plan that provides coverage beyond preventive care services while you’re contributing to an HSA.

HSA and Medicare

Understanding how Medicare interacts with your Health Savings Account (HSA) is crucial for managing your healthcare expenses effectively. Here’s what you should know:

Eligibility: You can’t contribute to an HSA once you’re enrolled in Medicare. This means if you’re planning to enroll in Medicare, it might be wise to maximize your contributions to your HSA before you become eligible.
Contribution Limits: If you have both Medicare and an HSA, your contribution limit to the HSA changes. You’re only allowed to contribute on a prorated basis for the months you were not enrolled in Medicare.
Qualified Medical Expenses: You can still use the funds in your HSA to pay for qualified medical expenses, even after you’re enrolled in Medicare. However, you can’t use HSA funds to pay for premiums for Medicare supplemental policies (Medigap) or Medicare Advantage plans.
Tax Implications: Withdrawals from your HSA for qualified medical expenses remain tax-free, even if you’re on Medicare. However, if you withdraw funds for non-medical expenses, you’ll incur a 20% penalty on the amount withdrawn, plus income tax (for those under 65). After age 65, you can withdraw for non-medical expenses penalty-free, but income tax is still applicable.
Medicare Premiums: You cannot use HSA funds to pay for Medicare premiums (except for certain specific circumstances, such as premiums for qualified long-term care insurance, or premiums for Medicare Part B, Part D, or Medicare Advantage, if you’re over 65).
Medicare and HSA coordination: When you enroll in Medicare, you should stop making contributions to your HSA. However, you can still use the funds in your existing HSA to pay for qualified medical expenses. Additionally, you may choose to withdraw funds from your HSA to cover Medicare premiums and out-of-pocket medical expenses.
Healthcare Costs in Retirement: While Medicare provides coverage for many healthcare expenses, it doesn’t cover everything. Having an HSA can be a valuable tool for covering co-pays, deductibles, and other out-of-pocket expenses in retirement.

Need more information on Medicare- Grab out FREE Medicare Cheat Sheet!

Is an HSA Right for You? Making an Informed Decision

While HSAs offer significant advantages, they might not be the perfect fit for everyone. Here are some key factors to consider:

Health Status: If you anticipate needing frequent medical care, the higher out-of-pocket costs associated with HDHPs might outweigh the tax benefits of an HSA.
Financial Stability: Ensure you have a financial safety net to cover your deductible in case of unexpected medical bills.
Future Healthcare Needs: If you foresee significant healthcare expenses in the future, an HSA can be a valuable tool to accumulate funds and prepare for those costs.

Maximizing Your HSA Advantage: Getting Started

If you’ve decided an HSA aligns with your financial goals, here’s how to get started and make the most of it:

Open an HSA: Many employers offer HSAs through payroll deductions. You can also open an HSA directly with wth us. Get started by booking an appointment.
Contribute Strategically: The IRS sets annual contribution limits for HSAs. Contribute as much as your budget allows to maximize your tax savings and long-term healthcare savings.
Plan for Deductible Expenses: Set aside funds in a separate savings account or budget to cover your deductible in case of unexpected medical bills. This will prevent dipping into your HSA funds prematurely and ensure you have access to tax-advantaged dollars for future needs.
Track and Manage Expenses: Maintain clear records of your HSA contributions, qualified medical expenses, and withdrawals. Many HSA providers offer online tools and mobile apps to simplify expense tracking and ensure you stay compliant with IRS regulations.

Leveraging HSAs for Long-Term Healthcare Savings

HSAs are powerful tools for long-term healthcare savings. Here are some strategies to get the most out of them for the future:

Invest Your HSA Funds: Some HSA providers offer investment options. Consider investing a portion of your HSA funds for long-term growth. Potentially outpacing inflation and accumulating a larger nest egg for future healthcare needs. Not sure where to start, book a free consultation call with us.
Pay Yourself Back: If you pay for qualified medical expenses out of pocket, you can reimburse yourself from your HSA funds later, even years down the line. Keep receipts for qualified expenses to ensure proper documentation.

Conclusion: Your Empowered Path to Healthcare Savings

Health Savings Accounts offer a unique opportunity to take control of your healthcare finances. By understanding the tax advantages, eligibility requirements, and strategic use of HSAs, you can significantly reduce your healthcare costs and build a secure financial future for your health.

Ready to explore a Health Savings Account further?

We are here to help answer any questions you may have about HSAs. Book a call with us today!

6 important things to do when turning 65 – A Retirement Checklist

Posted on February 16, 2022January 16, 2025 by Brian Colvert

Turning 65 – A Retirement Checklist

Are your turning 65 soon? Turning 65 is a major milestone and pivotal age for your retirement planning. Not only is this an important age for government programs like Medicare and Social Security, but it’s also a perfect time to check other parts of your financial plan, particularly if you’re about to retire. Here are 6 important things to do as you get closer to your 65th birthday to make sure this year and the many years that follow are amazing! (P.S. Read to the end for a special bonus gift for turning 65!!)

Prepare for Medicare
Consider Long Term Care Insurance
Review your Social Security Benefits
Review Retirement Accounts
Update Estate Planning Documents
Get Tax Breaks

1. Prepare for Medicare

Medicare is the most common form of health care coverage for older Americans. The program has been in existence since 1965 and provides a way for seniors to have their health needs taken care of after they retire from the workforce.

What is Medicare?

Medicare is basically the federal government’s health insurance program for people 65 or older (or younger with disabilities). Medicare is primarily funded by payroll taxes paid by most employees, employers, and people who are self-employed. Funds are paid through the Hospital Insurance Trust Fund held by the U.S. Treasury.

When can I enroll in Medicare?

Starting 3 months before the month you turn 65, you are eligible to enroll in Medicare, you can also sign up during your birthday month and the three months following your 65th birthday. Essentially, you have a seven-month window to sign up for Medicare. Be mindful of your timing and enrollment because Medicare charges several late-enrollment penalties.

What does Medicare cover?

Medicare benefits vary depending on the enrollment plan you choose. Medicare is made up of four enrollment plans: Medicare Part A, Part B, Part C, and Part D.

Here is a quick breakdown of the four parts of Medicare:

Medicare Part A: Know as the Original Medicare, Part A covers inpatient hospital care, home health, nursing, and hospice care. Part A is typically paired with Medicare Part B.

Medicare Part B: Still considered part of the Original Medicare, Part B helps cover doctor’s visits, lab work, diagnostic and preventative care, and mental health. It does not include dental and vision benefits.

Medicare Part C: This option offers traditional Medicare coverage but includes more coverage for routine healthcare that you use every day, routine dental care, vision care, and hearing. Plus, it covers wellness programs and fitness memberships. Medicare Part C is also known as Medicare Advantage and is a form of private insurance. Note that you will not be automatically enrolled in these benefits.

Medicare Part D: Medicare Part D is a stand-alone plan provided through private insurers that covers the costs of prescription drugs. Most people will need Medicare Part D prescription drug coverage. Even if you’re fortunate enough to be in good health now, you may need significant prescription drugs in the future.

While Medicare is great it’s not going to cover all your medical expenses. You’ll still be responsible for co-payments and deductibles just like on your employer’s health plan, and they can add up quickly.

To offset these expenses, a Medicare Supplement (Medigap) insurance policy could be a good option as well. Medigap is offered by private insurance companies and covers such as co-payments, deductibles, and health care if you travel outside the U.S.

How can I enroll in Medicare?

For most people, applying for Medicare is a straightforward process. If you already receive retirement benefits from Social Security or the Railroad Retirement Board, you’ll be signed up automatically for Part A and Part B.

If you aren’t receiving retirement benefits, and you don’t have health coverage through an employer or spouse’s employer, you will need to apply for Medicare during your 7-month enrollment window.

You can sign up for Medicare online, by phone, or in-person at a Social Security office.

Please note that if you have a Health Savings Account (HSA) or health insurance based on current employment, you may want to ask your HR office or insurance company how signing up for Medicare will affect you.

2. Consider Long Term Care Insurance

Another prudent thing to do when you are turning 65 is to consider your long-term care insurance options before retirement.

What is long-term care insurance?

The goal of long-term care is to help you maintain your daily life as you age. It helps to provide care if you are unable to perform daily activities on your own. It can include care in your home, nursing home, or assisted living facility. The need for long-term care may result from unforeseen illnesses, accidents, and other chronic conditions associated with aging.

Medicare often does not provide long-term care coverage, so it is a good idea to factor this additional coverage in.

Why do I need long-term care insurance?

While it may be hard to imagine needing long-term care now, the U.S. Department of Health and Human Services estimates that someone turning age 65 today has almost a 70% chance of needing some type of long-term care service in their lifetime.

Unfortunately, long-term care coverage is often hindsight, only thinking about it once it is needed. Planning for it now can help you access better quality care quickly when you need it and help you and your family avoid costly claims.

How do I get long-term care insurance?

First, talk with a CERTIFIED FINANCIAL PLANNER™ about whether long-term care insurance makes sense for you. Coverage can be complex and expensive. A good Financial Advisor can help guide you to a plan that is right for you.

Most people buy their long-term care insurance through a financial advisor, however, some states offer State Partnership Programs and more employers are offering long-term care as a voluntary benefit.

It is important to start shopping before you would need coverage. While you can’t predict the future, if you wait until you are well into retirement and already having medical issues, you may be turned down or the premiums may be too high to make it a feasible option.

3. Review your Social Security Benefits

If you haven’t yet started to collect Social Security, your 65th birthday is a great time to review your social security strategy to help you maximize your benefits.

When can I take Social Security?

The Social Security Administration (SSA) considers the full retirement age is 66 if you were born from 1943 to 1954. The full retirement age increases gradually if you were born from 1955 to 1960 until it reaches 67. For anyone born in 1960 or later, full retirement benefits are payable at age 67.

In deciding when to start receiving Social Security retirement benefits, you need to consider your personal situation.

How can I maximize my Social Security Benefit?

Turning 65 might raise questions about how to maximize your Social Security befits in retirement. Rightfully so. Receiving benefits early can reduce your payments, however, the flip side is also true. If you’re still working or have savings that will allow you to wait a while on receiving benefits, your eventual payments will be higher. Your benefits can stand to grow 8% a year if you delay until age 70. Plus, cost of living adjustments (COLA) will also be included in that increase.

In addition to delaying receiving your benefits, it is important to make sure all your years of work have been counted. SSA calculates your benefits based on the 35 years in which you earn the most. If you haven’t clocked in 35 years, or the SSA doesn’t have those years recorded, it could hurt you.

Be sure to create a “My Social Security” account and check to make sure your work history is accurately depicted. It is wise to download and check your social security statement annually and update personal information as needed.

Another potential boost in your benefit can come from claiming spousal payments. If you were married for at least 10 years, you can claim Social Security benefits based on an ex-spouse’s work record.

Everyone’s financial situation is different, but it can be helpful to have a plan for how you’re going to approach Social Security before you turn 65.

4. Review Retirement Accounts

Even if you are not planning to retire soon, now (and every quarter for that matter) is a good time to check in on your retirement accounts. Is your portfolio allocated in a way that lines up with your target retirement date? When is the last time you met with your financial advisor? Do you need to catch up a little? Do you have a plan for your Required Minimum Distributions?

Meeting with a CERTIFIED FINANCIAL PLANNER™ can help you evaluate your risk tolerance in comparison to your retirement goals, make sure your investments are aligned to help you retire when you want, and make a plan for you to maintain the lifestyle you want in retirement.

A financial advisor can also help with planning for 401(k) catch-up contributions, RMDs, early withdrawals, or completing a Backdoor Roth.

A big hurdle as retirement approaches is often all the homework you have to do. Penalties, enrollments, coverage gaps, deadlines, etc. A great financial advisor can help guide you through this process.

If you are wondering how to find a great financial advisor, we have put a simple guide here. Or, we would love for you to schedule an appointment now to meet with one of our CERTIFIED FINANCIAL PLANNERs™.

5. Update Estate Planning Documents

The next item on the retirement checklist of important things to do when Turning 65 is to get your estate planning documents and legal ducks in a row. If you do not yet have an estate plan, will, medical directive, or financial power of attorney, it is time to get those in order. It is not too late! If you do have them, take some time to update them.

Have you had recent changes in personal circumstances? Do you need to update beneficiaries? Reviewing your plan at regular intervals, in addition to major life events, will help ensure that your assets and legacy are passed on in accordance with your wishes and that your beneficiaries receive their benefits as smoothly as possible.

Further, it is also a good idea to take inventory and organize all your financial documents. Keep a list of all your accounts (banking and investment), insurance, and estate documents as well as key contact information in a safe place. Make note of any safety deposit boxes you have. Keeping all this info organized and in one place will be a big help to your loved ones during a difficult time.

You’ll feel great knowing that you and your family are prepared

6. Get Tax Breaks

Finally, don’t let Medicare be the only gift to you when you turn 65. Starting in the year you turn 65, you qualify for a larger standard deduction when you file your federal income tax return. You may also qualify for extra state or local tax breaks at age 65.

Many states also offer senior property tax exemptions as well. For example, in Colorado for those who qualify, 50 percent of the first $200,000 of the actual value of the applicant’s primary residence is exempted. Check with your local tax assessor to see what property tax breaks may be available to you.

Turning 65 Birthday Advice

Relax and enjoy it. As much as turning 65 is a time to plan for retirement, it is also a time to celebrate.

If you plan to indulge in a much-deserved tropical getaway or a quick trip to visit your grandchildren, you may be able to take advantage of new travel discounts. Delta, American, and United Airlines all offer senior discounts on selected flights. Additionally, many hotels, car rental companies, and cruise lines all also offer senior discounts. So treat yourself!

Happy 65th! Cheers to many more!

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Have more questions? We’d love to talk. You can reach us directly at 719-394-3900 or you can schedule a call here!

Tag: Medicare