Celebrate your 65th birthday, but take the time to address the following important issues:
1. Enroll in Medicare
a. You should apply for Medicare during your initial enrollment period, the period
that begins three months before the month you turn 65 and ends three months
after the month of your 65th birthday. If you do not sign up for Medicare during
your initial enrollment period, you can still enroll for Medicare during the general
enrollment period. However, late enrollment penalties will apply.
b. Research and educate yourself about Medicare coverage and costs before you
apply. Understand that Medicare will not cover all your health-care costs.
i. Original Medicare includes Part A (hospital insurance) and Part B
(medical insurance). You can add Part D (prescription drug coverage) and
Medigap (supplemental) insurance. Medigap coverage fills in some of the
gaps in Original Medicare. Part A is free for most participants, while Part
B and Part D premiums are based on income.
ii. Medicare Advantage (Part C) combines Part A, Part B, and
usually Part D. Medicare Advantage limits the network of providers, but
often offers additional benefits and charges lower premiums than Original
c. If you’re still working at age 65 and have health insurance through your
employer, you may want to wait until your special enrollment period to enroll.
This period begins depending on when you leave your job or when your group
health insurance coverage ends.
2. Explore when to file for Social Security
a. You are eligible to file for Social Security at age 62.
b. You may claim the full monthly benefit if you file for Social Security at your full
retirement age (FRA). FRA depends on the year that you were born and gradually
increases from age 65 to age 67 (for people born in 1960 or later).
c. Benefits increase 8% per year for each year that you delay filing for Social
Security until age 70. To maximize your monthly payment, consider delaying
filing for Social Security if you have other sources of income during this period.
d. If you claim Social Security before reaching your FRA, earning other income can reduce your benefits. Also, if your income exceeds a certain threshold, you may have to pay taxes on up to 85% of your benefits. Married couples should consider other factors, including if one spouse was the higher earner, an age difference between the spouses, and if one spouse has a limited work history.
e. Determining when to file for Social Security can be complicated. A good idea is
to use a benefit calculator, such as the one on the Social Security website
A friend of mine, Dolores, turned 65 on June 1, 2017. Her best piece of advice is to research Medicare and Social Security BEFORE you turn 65. Start early! Talk to and question others and find the best choice for you. Consider contacting an independent health insurance agent and/or visiting your local Social Security office.
3. There are other issues you should address when you approach your 65th birthday. These include updating your legal and estate planning documents, reviewing your beneficiaries for retirement accounts and life insurance policies, and discussing your end of life wishes with your family.
Celebrate! You are 65 years young. Address the above issues and then you can enjoy the years ahead, knowing that you have made informed decisions. Seize the day!
Words of wisdom from a client, Ruth L, 101 years old, “It doesn’t take a lot of money to save for retirement, but it takes a lot of time.”
Beth Carroll is a CPA and a Professional Daily Money Manager. Her company, Cornerstone Money Management, LLC, helps seniors in their homes with billpay, financial organization and cash flow management. You may reach her at firstname.lastname@example.org or 401-323-4895.