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7 Important Financial Moves If You Turn 65 in 2016

Kimberly Lankford

Now is when you need to make important decisions about signing up for Medicare, planning your Social Security strategy, bolstering your retirement savings and more.

I’m going to be turning 65 in 2016. What financial decisions do I need to make this year?

Age 65 is a key time to take advantage of special savings opportunities, make important decisions about Medicare and Social Security, and in general take stock of your progress toward your retirement goal.

See Also: 11 Common Medicare Mistakes

Sign up for Medicare (or not). For most people, turning 65 brings big changes in health coverage. You can sign up for Medicare anytime from three months before to three months after the month you turn 65. If you’re already receiving Social Security benefits, you’ll automatically be enrolled in Medicare Part A and Part B when you turn 65 and will receive your Medicare card in the mail three months before your 65th birthday. If you’re still working and don’t want Part B yet, you can send back the card and have it reissued for Part A only.

If you haven’t claimed Social Security benefits yet, you’ll need to take steps to enroll in Medicare. If neither you nor your spouse has employer health coverage, you should sign up for Part A and Part B. For an online application, even if you aren’t signing up for Social Security, see How to Apply Online for Just Medicare. Also see Social Security’s Apply Online for Medicare booklet for more information. The decision becomes more complicated if you’re still working and have employer coverage. See When to Sign Up for Medicare – and Why You Might Want to Delay for more information. Also see What You Need to Know About Enrolling in Medicare.


2) Fill in Medicare’s gaps. If you don’t have retiree health insurance, you’ll probably want a Medicare supplement policy (also known as medigap) to help cover Medicare’s co-payments and deductibles and a Part D drug plan to cover prescription drugs. Or you can get a Medicare Advantage plan, which provides medical and drug coverage from a private insurer. You have six months after you sign up for Medicare Part B to pick a medigap policy (after that, you can be denied or charged more for medigap because of your health). Most state insurance departments have price lists for the medigap plans available in their state. See for links. You can also find helpful information from the Medicare Rights Center. For more information, see How to Fill Medicare Coverage Gaps.

You can sign up for Part D when you enroll in Medicare Part B or, if you have other drug coverage (such as through an employer plan), you generally have 63 days after losing that coverage to sign up for a Part D plan without paying a late-enrollment penalty. For more information, see How to Save With a Medicare Prescription Drug Plan. Or you can enroll in a Medicare Advantage plan when you enroll in Part B or after losing other coverage. See When Can I Join a Health or Drug Plan?

You can also switch to another Part D or Medicare Advantage plan during open enrollment every year from October 15 to December 7. Shop for plans available in your area with the Medicare Plan Finder. You can get help with your decisions from your State Health Insurance Assistance Program. Also see When Can I Join a Health or Drug Plan for more information.

3) Make HSA changes. If you have a high-deductible health insurance policy, you’ll need to stop making HSA contributions when you enroll in Medicare. You lose eligibility to contribute to the HSA on the first day of the month that you turn 65 and enroll in Medicare, but you can contribute for the portion of the year before then. For example, if you turn 65 in October and enroll in Medicare, your maximum contribution would be 9/12 of the full year’s contribution, says Eric Dowley, senior vice president of health savings accounts for Fidelity. (You can continue to make HSA contributions after age 65 if you don’t enroll in Medicare Part A or Part B; see When to Sign Up for Medicare – and Why You Might Want to Delay for more information about these rules.)

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