How to Navigate Medicare When You Turn 65 and Plan to Continue to Work

"Hey Mike, what do I need to do if I turn 65 but still plan to work?" Discover what you need to know about Medicare when you turn 65 years old.

Text your questions to 913-363-1234.

Request Your Wealth Analysis by going to www.yourwealthanalysis.com.

What is How to Retire on Time?

Welcome to How to Retire on Time, a show that answers your questions about all things retirement, including income, taxes, Social Security, healthcare, and more. This show is an extension of the book How to Retire on Time, which you can grab today on Amazon or by going to www.howtoretireontime.com.

This show is intended for those within 10 years of their target retirement date or for those are are currently retired and are concerned about their ability to stay retired.

Mike: 00:05

Welcome to How to Retire on Time, a show that answers your questions about all things retirement, including income, taxes, Social Security, health care, and more. This show is an extension of the book, How to Retire on Time, which you can grab today on Amazon or by going to www.how to retire on time.com. My name is Mike Decker. I'm the author of the book, How to Retire on Time, but I'm also a licensed financial adviser, insurance agent, and tax professional, which means when it comes to financial topics, we can pretty much cover it all. So that said, please remember this is just a show.

Mike: 00:35

Everything you hear should be considered informational as in not financial advice. If you want personalized financial advice, then request your wealth analysis from my team today by going to www.yourwealthanalysis.com. With me in the studio today is my colleague, mister David Fransen. Thanks for being here today.

David: 00:51

Yes. Glad to be here.

Mike: 00:52

David's job is reading your questions, and I'm gonna do my best to answer them. Now you can send questions in at any time by texting them to 913-363-1234. Again, that's 913-363-1234, or email them to hey [e-mail]. Let's begin.

David: 01:12

Hey, Mike. What do I need to do if I turn 65 but still plan to work?

Mike: 01:17

Okay. I'm gonna assume this is talking about health care. Seems like it. Yeah. 65 is the Medicare start.

Mike: 01:24

So Yeah. Real quick, when you turn 65, or what was it within 3 months of 20 65?

David: 01:29

Yeah. You have, like, the 7 month sort of window of your initial enrollment. 3 months before the month when you turn 65 and 3 months after.

Mike: 01:36

Yeah. So you do need to enroll in part a. It doesn't cost you anything, but you've got to enroll in part a. Do not get penalized for that. Yeah.

Mike: 01:44

And then if you're working and you have a health care plan, you know, from the employer or whatever, then you would defer. But they gotta know. You've gotta defer part b. You don't need to defer part d. Part d is technically voluntary, though if you don't sign up for it and then sign up for it later, you get penalized.

Mike: 02:02

But as long as you've got a health care plan through your employer, then you would defer part b and and then you'd be fine. And then when you retire, that's when you would enroll for your first time. And that's an important time to really explore the different options, whether it's original Medicare, if you wanna go down that route, if you want supplemental Medicare, if you want an advantage plan. There are so many polarizing strategies. Anytime you hear an absolute, and what everyone should do this, just raise the red flag and do more research.

Mike: 02:29

Because every version, original, supplemental, or advantage has different benefits and detriments. And you need to figure out what is right for you and not what some sort of pundit or article and their strong opinion would suggest. Don't go down the absolute routes. Explore that. When you enroll in Medicare, whether it's Advantage Supplement, or they can't deny you in that first enrollment.

Mike: 02:56

But like supplemental plans, they they can't they they can deny you later on.

David: 02:59

The industry jargon would be like a guaranteed issue. Right? So when your initial enrollment, when you're first 65 and you're enrolling for the first time and you want to have a supplemental plan to help you with the original Medicare, can't be denied, guaranteed. But if you were to

Mike: 03:15

In your seventies, let's say you wanna switch to a supplemental plan.

David: 03:18

Yeah. Well yeah. So if if you had it and then left it and then wanted to come back, then there's sort of no guarantee. Then you go into the underwriting process, and who knows what'll happen?

Mike: 03:27

Yeah. So you wanna start right so you have a better chance of ending right. Right. So these are things to consider. Make sure you're aware of it.

Mike: 03:35

Again, part d, if you don't need drugs at that moment, it may be worth just enrolling in it anyway and doing the cheapest way of part d possible.

David: 03:44

Which could be just, like, $3 a month.

Mike: 03:46

Is it that that cheap?

David: 03:47

Yeah. It's that's where it could start or it could be all the way up to, you know, 50.

Mike: 03:50

Just get in there so you're not paying a a penalty later on when you might need medication in the future. Right. I'm not for or against eastern or western medicine or anything like that. It's just in my mind, having options is a nice thing. I I think that's that's kind of it.

Mike: 04:06

65, you wanna be considerate too of your tax planning. You wanna be considerate of your Social Security optimization. 65, you don't wanna file for social security if you're still working. You basically reduce your benefit. If you're working and you earn, more than a certain amount, every $2 you earn, $1 will be deducted from benefit until full retirement age.

Mike: 04:26

That's another thing a lot of people miss. So once you hit full retirement age, that's 667 for most people, then you could file and still work. But these these are all the nuances. So people that are getting to, I'll say, 60 to 65. If you're in that category, there's a lot that you could do to be proactive about your retirement planning and preparation that you may not realize.

Mike: 04:49

Lot of rules here. Finding a specialist that can help you navigate through it can be a very beneficial thing. That's very biased of me to say, but chat g p t can only answer questions that you ask. Yeah. And the hard part is you have to know the right questions to ask.

David: 05:06

Right.

Mike: 05:07

So anything else on 65, David? And anything on health care, Medicare that I should recommend? Not recommend, but, you know, discuss because this is not financial advice. This is a audio based program that we're discussing stuff.

David: 05:20

I think you covered a curve in the beginning when you said that there's no one right option. So you have these sort of of 3 lanes you can go down. Everyone is gonna have a different lane that they either feel more comfortable in or that works best for them. So, you know, don't let anybody steer you or push you into to one of those 3 because they have some incentive to do so.

Mike: 05:39

Well and let's let's address health care in general for just a moment. I think this is a nice thing to consider. A lot of people wait to retire until 65 because they can't solve the health care issue.

David: 05:51

Yeah.

Mike: 05:51

But they've never actually shopped health care options. So, some employers will let you stay on. Most employers don't. And COBRA only works for so long. And so people are scared of the Affordable Care Act options or Obamacare.

David: 06:05

Right.

Mike: 06:05

Why won't you just ask to see what what's out there? Yeah. Compare your current insurance with what is on the open market, and then ask yourself, how much is a year of your life worth? If you could get, let's say, roughly the same health care that you have right now, just for example, and it costs you or your family 12 to $15,000 a year. Just throwing out a number.

Mike: 06:26

K?

David: 06:27

Sure.

Mike: 06:28

Would you rather pay something you could afford to have an additional year of life to do whatever you want or keep working. You don't get more time, but you can buy more time. And so you have to ask yourself how much is a year of your life worth. Shop the options. Maybe you should retire at 62, 63 years old.

Mike: 06:47

And if that's possible, then great. But don't assume anything, especially when it comes to health care planning or Social Security planning or tax planning or any of these things. Put together a comprehensive plan. Ask all the questions you can think of. Ask whoever you're working with if there's questions you're not asking.

Mike: 07:06

What are they? And then how do you address them? And really look at it from a holistic standpoint. And then take a step back and say, what gives me purpose? If you were to retire, would you be fulfilled leaving your job?

Mike: 07:18

For some people, it may not be the case. Some people probably should keep working because there would be too big of a void if they stopped. For other people, their work is kind of slowly killing them. I mean, the the horror stories I've seen in certain work environments of just not so healthy supervisors. That's the only way I'm gonna put it.

Mike: 07:36

Yeah. We've all had 1 or 2 probably in our career, but certain situations that would just make you sick from the stress that you have to experience. So you have to ask yourself, how much is a year of your life worth? Can you afford to just buy more time in some sense? And then make an informed decision.

Mike: 07:52

But you can't do that unless you're prepared. And maybe you love your job now, but, you know, maybe next year you have a few too many bad days and you want out. This is my personal belief, but I think anyone 60 years or older should understand if they wanted to retire today, what would it look like? Even if they don't wanna retire today, they know what to expect if they were. That's kind of freedom that's liberating.

Mike: 08:15

Because now you're going to work because you want to. If you understand, oh, I could retire today. I keep working. And the next year, I could retire today. Or I could keep working.

Mike: 08:23

And you have the context. It's just it's life changing. Because who knows? You could just lose your job unexpectedly and be forced into early retirement. It'd be nice to know what that looks like as it's happening.

Mike: 08:35

And to know that you don't need to get another job, but maybe you do, maybe you don't. Maybe you get sick and you can't keep working. Wouldn't it be nice to know what that would look like? You already have the plan kinda built out. There's so many people that come through our process here and build a growth focused portfolio.

Mike: 08:51

Right? So, you know, you plan first, and then you look at the efficiencies, you look at the strategies, and then you build the portfolio to support the plan, to support the strategies. They go through this process that we have. They can't move a lot of money, but we're making adjustments in their 4 zero one k. We're making some adjustments in their other funds.

Mike: 09:07

And they're really putting together a nice plan that if they lost their job, quit, or got sick, they're not losing sleep over it. That's the kind of peace of mind that you just you can't get unless you put in the work and put together a plan. That's all the time we've got for the show today. If you enjoyed the show, consider subscribing to it wherever you get your podcast. Just search for how to retire on time.

Mike: 09:30

Discover if your portfolio is built to weather flat market cycles or if you're missing tax minimization opportunities that you may not even know exist. Explore strategies that may be able to help you lower your overall risk while potentially increasing your overall growth and lifestyle flexibility. This is not your ordinary financial analysis. Learn more about Your Wealth Analysis and what it could do for you regardless of your age, asset, or target retirement date. Go to www.yourwealthanalysis.com today to learn more and get started.