Turning 65? Here’s Why Medicare Matters More Than You Think
Every day, about 11,000 Americans celebrate their 65th birthday, marking not just a new year, but also an important financial milestone: enrolling in Medicare.
For many retirees, this is the first time they’ve had to choose their own health insurance. Others are still working and unsure how Medicare fits with their employer plan. And nearly everyone wonders how to avoid making a costly mistake.
The good news? With a little preparation, Medicare doesn’t have to be overwhelming. At Access Wealth, we help clients approach this process with clarity and confidence so healthcare decisions align with their broader retirement goals.
This guide walks you through the essentials: how and when to enroll, what each part covers, and how Medicare fits into your long-term financial plan.
Getting Ready for Medicare: Your Pre-Enrollment Checklist
If you’re approaching 65, start your planning early—ideally three to six months before your birthday. That’s when you’ll want to:
- Confirm your eligibility. Most people qualify at age 65 if they (or their spouse) worked and paid Medicare taxes for at least 10 years.
- Review your current coverage. Check whether your existing employer or retiree plan will continue after 65 and how it coordinates with Medicare.
- Create a timeline. Your Initial Enrollment Period (IEP) starts three months before your 65th birthday and lasts for seven months (three before, your birthday month, and three after).
- Gather important documents. Have your Social Security card, proof of age, and work history ready to streamline enrollment.
Medicare A, B, C, and D: What Each Part Really Covers
Medicare is divided into four main parts, each covering specific aspects of care:
Part A (Hospital Insurance): Covers inpatient hospital stays, skilled nursing, hospice, and some home health care. Usually premium-free.
Part B (Medical Insurance): Covers doctor visits, outpatient care, preventive services, and lab work. Has a monthly premium.
Part C (Medicare Advantage): Offered by private insurers, these plans combine Parts A and B and often include additional benefits such as dental, vision, and prescription coverage.
Part D (Prescription Drug Coverage): Helps pay for medications, either through a standalone plan or as part of a Medicare Advantage plan.
Note: Medicare does not cover most long-term or custodial care (such as help with daily living).
When to Sign Up for Medicare (and Why Timing Matters)
If You’re Turning 65
You can enroll during your Initial Enrollment Period, which begins three months before your 65th birthday. Apply through the Social Security Administration (online, by phone, or in person).
If you sign up before your birthday month, coverage usually begins the month you turn 65. Waiting until your birthday month or later can delay your start date, so it pays to plan early.
If You Miss Your Initial Window
You’ll need to wait for the General Enrollment Period (January 1–March 31), with coverage starting July 1. Missing your initial window can also mean lifetime penalties (a 10% increase to your Part B premium for every 12-month period you were eligible but didn’t enroll).
Making the Most Out of Medicare Open Enrollment Season
Each fall, Medicare offers Open Enrollment, a time when current enrollees can:
- Switch between Original Medicare and a Medicare Advantage plan
- Add or change a Part D prescription drug plan
- Review and update existing coverage
Even if you’re happy with your plan, it’s wise to review your options each year—especially if your health, prescriptions, or preferred doctors have changed.
If you’ve never enrolled in Medicare before, note that Open Enrollment applies only to those already in the program. First-time enrollees should use their Initial Enrollment Period instead.
Still Working at 65? How Your Employer Plan Fits with Medicare
Today, many people work well beyond age 65. If that’s you, it’s essential to know how your employer coverage interacts with Medicare.
- If your employer has 20 or more employees:
You can usually delay enrolling in Part B (and avoid the premium) as long as your employer’s coverage is creditable—meaning it’s equal to or better than Medicare. Ask your HR department for written confirmation. This letter allows you to delay Medicare enrollment without penalty and later enroll during a Special Enrollment Period (SEP) when you retire or lose coverage. - If your employer has fewer than 20 employees:
You generally need to enroll in Medicare Parts A and B when first eligible, because Medicare becomes your primary coverage. Not enrolling could result in unpaid claims. - If you contribute to a Health Savings Account (HSA):
Stop HSA contributions six months before enrolling in Medicare to avoid tax complications.
We highly recommend contacting your employer’s benefits department before making any decisions.
Retiring Early? What to Know About Medicare and Retiree Health Coverage
If you retire early, your former employer may offer a retiree medical plan that bridges the gap until you reach Medicare eligibility. When you turn 65, Medicare usually becomes your primary coverage, and your retiree plan becomes secondary, covering costs like copayments or coinsurance.
Before turning 65, confirm:
- Whether your retiree plan automatically becomes secondary once you enroll in Medicare
- If you need to enroll in Medicare Parts A and B to maintain retiree benefits
- Whether your plan includes prescription coverage (or if you’ll need a separate Part D plan)
If your retiree coverage ends when you reach 65, you’ll qualify for a Special Enrollment Period to sign up for Medicare without penalty—just be sure to enroll within eight months.
Already Retired? Here’s How Medicare Enrollment Works for You
If you’re already retired when you turn 65, you’ll generally enroll in both Part A and Part B, then decide whether to add a Part D prescription plan or opt for a Medicare Advantage plan that bundles coverage.
This is also the time to explore Medigap (Medicare Supplement) policies, which can help fill the cost gaps left by Original Medicare.
If you already receive Social Security benefits, enrollment in Medicare Parts A and B happens automatically about four months before your 65th birthday.
If you’re receiving Social Security Disability Insurance (SSDI), you’re automatically enrolled after 24 months of benefits.
Avoid These 5 Costly Medicare Mistakes
Even well-prepared retirees make errors that can lead to higher costs or gaps in coverage. The most common include:
- Missing enrollment deadlines, resulting in lifetime penalties.
- Assuming Medicare covers long-term care. In general, it doesn’t. Only limited coverage is available for short-term skilled nursing support after a qualifying hospital stay.
- Overlooking how Medicare interacts with employer coverage.
- Failing to review plans annually. Provider networks and drug lists change each year.
- Ignoring total costs. Premiums, deductibles, and out-of-pocket expenses all add up.
Avoiding these mistakes can save thousands of dollars and prevent unnecessary stress.
Why Your Financial Plan Should Include a Medicare Strategy
For most retirees, Medicare decisions are not just health decisions—they’re financial ones. The right strategy can help protect income, reduce taxes, and preserve long-term independence.
A financial planner can help by:
- Aligning your Medicare timeline with Social Security and retirement income strategies
- Projecting healthcare costs within your retirement budget
- Coordinating Medigap or Advantage choices with your cash flow and investment income
- Incorporating tax planning to manage IRMAA surcharges, Roth conversions, and RMD withdrawals
- Evaluating long-term care funding options
At Access Wealth, we believe the right Medicare decisions should enhance—not complicate—your financial life.
The Takeaway: Plan Ahead for a Smooth Medicare Transition
Medicare can feel complicated, but with early preparation and the right support, it becomes a manageable—and even empowering—part of your retirement plan.
Begin researching your options three to six months before turning 65 so you understand your coverage choices, key deadlines, and how Medicare fits into your broader financial picture. Then, revisit your plan each year during Open Enrollment (October 15 – December 7) to ensure it continues to meet your needs.
If you’d like help aligning your Medicare decisions with your long-term financial goals, contact Access Wealth today. One conversation can bring clarity, confidence, and peace of mind to this important life transition.
Next up in this series: Breaking Down the Costs of Medicare
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Sources:
1Genworth Cost of Care Survey, 2024.
Fidelity Investments, “How Much Does Healthcare Cost in Retirement?” (2024).
Centers for Medicare & Medicaid Services (CMS.gov), “Medicare Eligibility & Enrollment.”
