Medicare can feel like something to deal with once 65 gets closer. But some of the most important decisions tend to come before then: which coverage path may fit you best, when you may need to enroll, and what other details need to be lined up first, like employer coverage, HSA contributions, retirement timing, or coverage for a younger spouse.
Getting started earlier gives you more room to think through the decisions before the deadlines are in front of you.
At 63, that usually means getting familiar with the basics and starting to think about how Medicare may fit into your retirement timeline.
This is when it helps to get familiar with the difference between Medigap plus Part D vs Medicare Advantage, and to start asking a few practical questions.
If you’re married, this is also a good time to think about both spouses together. One person may reach Medicare first. One may retire earlier. One may need different coverage for a period of time. Medicare planning is often a household decision, not just an individual one.
At age 64, it’s time to get practical. Make a list of your doctors, hospitals, and prescriptions. Then use that information to compare plans on Medicare.gov. That can help you see whether a Medicare Advantage plan would work well with your providers and medications, or whether Medigap plus Part D is likely to be the better fit, especially if provider flexibility is important to you. We wrote an article on this topic: Medigap plus Part D vs Medicare Advantage.
If you want a broader overview of Medicare coverage and enrollment, Medicare publishes a Medicare & You handbook each year.
If you’ve already thought through your options, taking action at age 65 may feel more manageable.
For many people, that means using the Initial Enrollment Period, which runs for 7 months: three months before the month you turn 65, your birthday month, and three months after. But whether you need to enroll at 65 depends in part on whether you’re still covered by a qualified employer plan.
If you choose Medigap plus Part D, timing matters in another way, too. The first six months after Part B begins are especially important for Medigap because, in most states — though some states, including Massachusetts, offer year-round guaranteed issue — that’s the key guaranteed-issue window. After that, underwriting may become part of the picture.
If you choose Medicare Advantage, it’s worth reviewing your plan and drug coverage each year because plan premiums, covered drugs, and provider networks can shift. Open enrollment from October 15 to December 7 is when to compare options and confirm your plan still fits.
Medicare cost planning can start before enrollment. Part B premiums can be affected by income from two years earlier, which is one reason tax planning before and during retirement can matter for Medicare too.
This is one of the areas where timing can get more complicated than it first appears.
For most people, Part A is premium-free for most people (generally those with at least 10 years of Medicare-covered employment) and covers hospital care. Part B covers doctor visits and outpatient care, and it has a monthly premium.
If you or your spouse is still working and you have health coverage based on current employment, you may be able to delay enrolling in both Part A and Part B without penalty. But that depends on the size of the employer and the kind of coverage you have.
In broad terms:
This is also where confusion can creep in. COBRA, retiree coverage, and Marketplace coverage don’t work the same way as active employer coverage when it comes to delaying Part B.
HSA contributions are one of the more important planning issues to get right. If you want to keep contributing to an HSA, signing up for Part A can become a problem because once Medicare begins, HSA contributions are no longer allowed. Since Part A can be retroactive, it’s important to stop HSA contributions early enough before enrollment to avoid problems.
That’s one reason some people who are still working and covered by a qualified employer plan choose to delay both Part A and Part B. There is a common misconception that delaying Part A at 65 automatically creates a penalty. For most people in this situation, the more important penalty risk is delaying Part B after qualified employer coverage ends.
If you’re working past 65, it’s worth getting clear on the rules before you reach the deadline. We also cover that more directly in Working Past 65? Plan Ahead to Avoid a Medicare Penalty.
If you may retire before 65, it helps to think early about when you want to stop working full-time. If you retire before 65, Medicare doesn’t begin just because work ends. That means healthcare coverage needs to be part of the retirement bridge.
For some people, that bridge may only last a few months. For others, it may last a few years. And for couples, one spouse may move onto Medicare while the other still needs separate coverage.
Before anyone leaves work, it helps to map out:
That last point matters. The question isn’t only whether you can afford to retire. It’s also whether the cost of the healthcare bridge fits comfortably into that decision.
Medicare planning starts before 65 because some of the most important decisions come before enrollment does.
If Medicare is on your horizon, it helps to understand your options early enough to make thoughtful decisions about coverage, timing, and how Medicare fits into the rest of your retirement planning.
Sachetta, LLC is an SEC-registered investment adviser. This content is for educational purposes only and does not constitute investment, legal, or tax advice. Past decisions and outcomes vary by individual circumstances. Please review our Form ADV Part 2A for more information about our services, fees, and conflicts of interest.