Turning 65? Every day, 10,000 baby boomers reach this milestone, making them eligible for Medicare. It’s a crucial time to review your retirement plan, government programs like Medicare, and financial arrangements. This checklist guides you through essential aspects to consider.
1. Medicare Preparation
As you approach the age of 65, you become eligible to enroll in Medicare Part A and Part B. If you are already receiving Social Security benefits, you will be automatically enrolled in Medicare. Otherwise, it’s essential to manually sign up through the Social Security Administration.
You have a three-month window to apply for Medicare, which starts three months before your 65th birthday. Applying during this period ensures that your coverage begins on the day you turn 65. Alternatively, you can apply during the month you turn 65 or within the following three months, though your coverage will begin after your birthday.
Failure to apply during this initial enrollment period may result in a penalty, leading to higher Medicare premiums during your retirement. However, if you still have group coverage from an employer, you can delay enrollment without incurring any penalties. Otherwise, it’s advisable to aim for Medicare enrollment by your 65th birthday.
Learn more about Medicare Enrollment Periods here.
2. Explore Additional Health Insurance Options
Although Medicare covers a significant portion of your healthcare expenses, there are still substantial out-of-pocket costs to consider. Moreover, Medicare Parts A and B do not include coverage for prescription drugs. Upon turning 65 and becoming eligible for Medicare, you have an enrollment period during which you can secure private insurance to address these expenses.
You have the choice to enroll in a Medigap plan or a Medicare Advantage plan, along with a Medicare Part D plan specifically designed for prescription coverage. It is crucial to act before reaching 65, as delaying enrollment can complicate matters. Medicare Advantage and Part D plans can only be signed up for during open enrollment, and Medigap may require you to undergo medical underwriting.
3. Evaluate Your Social Security Benefits Strategy
The decision of when to start collecting Social Security benefits lies within the age range of 62 to 70. If you have already started receiving payments, you have already made this choice for your retirement plan. However, if you haven’t started yet, take the time to consider when you’d like to commence.
The longer you delay, the higher your monthly payments will be, reaching their maximum potential at age 70. At 65, carefully assess whether you need the additional income immediately or if waiting a bit longer could result in more substantial benefits throughout your retirement.
4. Plan Ahead for Long-Term Care Expenses
Long-term care encompasses various services, including nursing home stays, assisted living facilities, and at-home nursing care. The expenses for these services can be significant, with average costs of around $3,628 per month for assisted living and $7,698 per month for a private room in a nursing home, as reported by the U.S. Department of Health and Human Services.
To address these potential costs, one option is to obtain a long-term care insurance policy. While age 65 still offers a good chance to qualify, obtaining coverage becomes more challenging as you grow older. Alternatively, you can set aside a portion of your savings to prepare for these expenses.
5. Review and Adjust Your Retirement Accounts and Investments
Before reaching 65, it’s crucial to assess your retirement investment strategy. As you age, the focus should shift from more aggressive growth through stocks to safeguarding your savings and generating income with safer assets like bonds. Review the mix of investments in your various retirement accounts to ensure they align with your financial goals.
6. Update Your Estate Planning Documents
Your estate plan outlines your wishes in the event of serious illness or after your passing. Essential documents include a will, a living will or medical directive, and a financial power of attorney. If you already have these documents in place, it’s important to verify that they are accurate and up-to-date. If you haven’t established your estate plan yet, consider working with an attorney to create all the necessary arrangements.
Age 65 presents an ideal opportunity to review these essential retirement planning steps. To ensure the adequacy of your plans, it’s advisable to consult with an insurance specialist or financial advisor, who can assist you in navigating this comprehensive checklist.
Need help? Call Health Plans in Oregon: 503-928-6918. Our assistance is at no cost to you.
