Do you have to do anything when you turn 65? A guide to Medicare and more

According to the Social Security Administration, most Americans become eligible for Medicare when they turn 65. People often wonder if they have to do anything when they turn 65, with Medicare enrollment being a primary concern. Other considerations include taxes, Social Security, and estate planning. This guide outlines essential actions.

Quick Summary

Deciding on Medicare enrollment is the primary action for most people turning 65. Automatic enrollment can occur if already receiving Social Security benefits. Other actions include reviewing Social Security claiming strategy, updating financial documents, and taking advantage of potential tax benefits. Some steps are mandatory, while others are optional.

Key Points

• Decide on Medicare Enrollment: Most must actively sign up during their seven-month Initial Enrollment Period to avoid penalties, unless automatically enrolled.

• Understand Automatic Enrollment: If receiving Social Security benefits, you're automatically enrolled in Parts A and B, but may need to act to delay Part B.

• Review Social Security Claiming Strategy: Turning 65 is ideal to analyze when to claim benefits, as delaying increases payments.

• Assess Health Savings Account (HSA) Contributions: Stop HSA contributions upon enrolling in Medicare.

• Update Legal and Financial Documents: Review and update your will and power of attorney.

• Explore Senior Tax Benefits: At 65, you qualify for a higher standard tax deduction and potential state breaks.

• Consider Supplemental Health Coverage: Original Medicare doesn't cover all costs; research Medigap, Medicare Advantage (Part C), and Part D.

Navigating Medicare: The Most Important Task at 65

For most people, navigating Medicare is the most critical item on the to-do list at age 65. Medicare is the federal health insurance program for people 65 or older. Your specific enrollment process depends on your employment status and whether you are already collecting Social Security benefits.

Automatic vs. Manual Enrollment

• Automatic Enrollment: If you are already receiving Social Security retirement or disability benefits at least four months before you turn 65, you will be automatically enrolled in Medicare Parts A (Hospital Insurance) and Part B (Medical Insurance).
• Manual Enrollment: If you are not yet receiving Social Security benefits, you must actively sign up for Medicare during your Initial Enrollment Period (IEP), which is a seven-month window around your 65th birthday.

Understanding Medicare Parts and Supplemental Coverage

Original Medicare consists of Part A and Part B. Many people seek additional coverage for out-of-pocket costs.

• Medicare Part C (Medicare Advantage): Private companies offer these plans, often including extra benefits.
• Medicare Part D (Prescription Drug Coverage): This is optional coverage for prescription drugs.
• Medigap (Medicare Supplement): These policies help pay some healthcare costs not covered by Original Medicare.

Key Medicare Enrollment Decisions at 65

Feature	Original Medicare (Parts A & B)	Medicare Advantage (Part C)
Coverage	Includes hospital and medical insurance.	Combines Part A and B, often with extras like dental and vision.
Network	Can see any doctor in the U.S. who accepts Medicare.	Typically requires using doctors within the plan's network.
Referrals	No referrals needed to see a specialist.	Often requires a referral to see a specialist.
Cost	Part A is often premium-free. Part B has a monthly premium.	Often has a low or $0 monthly premium, plus the Part B premium.
Extra Coverage	Must purchase separate Medigap and Part D policies.	Often includes Part D and other benefits bundled into one plan.

Social Security: Claiming Strategy and Timing

Turning 65 is a good time to evaluate your Social Security claiming strategy, especially if you are still working. For most born after 1943, Full Retirement Age (FRA) is not 65. You can claim earlier for reduced benefits or wait for larger payments, maximizing at age 70.

Reviewing and Updating Financial and Legal Documents

Entering a new life phase necessitates reviewing financial and legal affairs.

• Retirement Accounts: Review accounts like 401(k)s and IRAs for appropriate asset allocation.
• Health Savings Account (HSA): Stop contributing to your HSA once you enroll in any part of Medicare.
• Estate Planning: Update or create a will, power of attorney, and advance medical directive.

Health Check-ups and Tax Benefits

Turning 65 also presents health and tax opportunities.

• Get a Complete Physical: Utilize Medicare eligibility for a thorough check-up.
• Take Advantage of Tax Breaks: Those 65 and older qualify for a higher standard deduction on federal income taxes. Many states offer additional tax relief.

Conclusion

Ignoring the 65 milestone can lead to penalties and missed opportunities. The most pressing matter is an informed decision about Medicare enrollment during your Initial Enrollment Period. Reviewing Social Security strategy, updating documents, and exploring tax benefits are also crucial. Consulting a financial advisor or licensed Medicare agent can provide personalized guidance for specific circumstances.

Working Past 65: What You Need to Know

If working, you might delay Part B enrollment without penalty if you have qualifying employer health coverage. Enrolling in the premium-free Part A is often still beneficial. Find guidance on enrollment and working past 65 at {Link: medicare.gov https://www.medicare.gov/}.

Frequently Asked Questions

Do I have to enroll in Medicare at 65?

You must actively enroll if not receiving Social Security benefits. If you are, you'll be automatically enrolled in Parts A and B.

What happens if I miss my Medicare enrollment period?

Missing your Initial Enrollment Period may result in a permanent late enrollment penalty, leading to higher Part B premiums.

Can I delay Medicare enrollment if I'm still working?

Yes, if you have qualifying health coverage through an employer.

Does my Social Security automatically start when I turn 65?

No, you must file to receive benefits. Full retirement age is higher than 65 for most, and delaying increases benefits.

What is the difference between Medicare and Medigap?

Medicare provides primary insurance (Parts A & B). Medigap is supplemental insurance from private companies covering costs Medicare doesn't, like deductibles.

Are there any tax breaks for turning 65?

Yes, you're eligible for a larger federal standard tax deduction and potentially state/local relief.

Do I need to update my will at 65?

Turning 65 is a good time to review estate documents like your will and power of attorney.