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Reaching Medicare eligibility is an important milestone, but understanding the different parts, when to enroll, and what is and isn’t covered can be complex. If you haven’t properly planned for Medicare, medical expenses could potentially derail your retirement. That’s why Medicare planning should be a key part of your overall retirement strategy.

In this episode of Money Wisdom, Jake Doser, CFP®, CPWA® and Nicholas J. Colantuono, CFP®  break down the essentials of Medicare – in just 10 minutes.

When to Enroll

Medicare is the federal health insurance program for people aged 65 and older. Your Initial Enrollment Period (IEP) begins three months before the month you turn 65. Coverage typically starts on the first day of your birth month, unless your birthday falls on the first day of the month, in which case it begins the month before.

There’s also the Medicare Open Enrollment Period, which runs from October through December. During this time, you can review and make changes to your Medicare coverage. It’s important to sign up for Medicare on time to avoid any coverage gaps or late enrollment penalties.

Parts A & B: Original Medicare

Medicare is split into four distinct parts, each with varying degrees of coverage. You can sign up for Parts A and B, or just Part A, through Social Security. Part A is free if you worked and paid Medicare taxes for at least 10 years. It covers inpatient hospital stays, skilled nursing facility care, and hospice care.

Part B covers certain doctors’ services and other outpatient care, with premiums starting at $185 a month in 2025. These premiums can increase depending on your modified adjusted gross income (MAGI). This is where tax planning becomes essential. If you’re withdrawing from tax-deferred accounts, that income may impact your Medicare premiums and how much of your Social Security benefits are taxed.

Parts C & D: Medicare Advantage and Drug Coverage

Together, Part A and B make up Original Medicare. From there, you can choose Part C, or Medicare Advantage plans, which replace A and B. These are offered through private insurers and often have lower monthly premiums, but out-of-pocket costs can be higher.

Part D, which covers prescription drugs, is not included automatically so you must enroll through a private insurer. The average monthly cost is around $50, though it can vary based on the plan, your medications, and income level.

Choosing the Right Coverage for You

You also have the option to select a supplemental plan (Medigap), which helps cover what Original Medicare doesn’t. Choosing between Medicare Advantage and supplemental coverage is a personal choice that depends on your health and budget. That’s why it’s helpful to consult an independent Medicare agent who can compare multiple plans across different providers.

Are you wondering if you’re ready to retire? Get your free Are You Ready to Retire? Starter Kit by texting “KIT” to 800-757-0436.