Medicare: 3 things to know

Key Points

  • An accurate estimate of the amount you’ll need for health care costs in retirement can help you feel more confident.
  • Your Medicare enrollment date depends on your circumstances; enrolling at the right time can save you money.
  • Well before you plan to retire, talk with your advisor about covering future health care expenses and making the most of your Medicare benefits.

If you’re nearing age 65, it’s time to learn about Medicare enrollment. You should also speak with your advisor about paying for health care costs that Medicare won’t cover in retirement.


1. Know your estimated costs

Retirement health care costs can be a significant part of your financial picture, but only three in 10 workers have tried to calculate how much money they will need.1 Your Ameriprise advisor can provide you with personalized advice to help plan for expected and unexpected medical expenses.

The age at which you choose to retire impacts your coverage options and costs.

  • Retire before age 65: You’ll need to arrange coverage until you are eligible for Medicare. Options could include a spouse’s employer plan or private insurance.
  • Retire at age 65 or older: Your advisor will take Medicare premiums into account in your financial picture as well as other options to augment what Medicare does not cover. This would include, for example, dental, vision, hearing aids, nursing home, assisted living or in-home care costs.


2. Know your enrollment date

You’re eligible to enroll in Medicare during a window three months before you turn 65, during your birth month and the three months after you turn 65, but other factors might affect your enrollment. You could pay penalties if you miss this window, so talk to your advisor to make sure your timing is right.

  • If you’re already collecting Social Security benefits, Medicare coverage generally will begin the month you turn 65.
  • If you’re not yet collecting Social Security, you have a seven-month window to enroll in Medicare. It begins three months before the month you turn 65. It’s a good idea to put a reminder on your calendar to enroll promptly.
  • If you or your spouse are still actively employed when you turn 65 and you have health insurance through your employer, you can keep it. (Important note: COBRA doesn’t count as active employer coverage.) When your employment ends, you have an eight-month special enrollment period to enroll in Medicare. The enrollment period starts the month after your employment or employer coverage ends, whichever is first.


3. Know how to avoid penalties

If you miss your initial enrollment period around your 65th birthday, you must wait for the annual general enrollment period, Jan. 1 to March 31. Coverage would begin July 1, and you may be subject to lifetime late-enrollment penalties.

Some exceptions and other rules apply if you have a disability, an HSA or are insured under the Affordable Care Act. Your advisor can review your specific situation with you.


Make Medicare an annual discussion topic with your advisor

During the annual Medicare open enrollment period between Oct. 15 and Dec. 7, you’ll have a chance to review and change your Medicare coverage plan, making it a good time to check in with your advisor to stay on track with your financial goals.