5 Best Money Strategies for People 65 and Up
Give yourself this 5-point financial checkup
1. Assess your Medicare options and review your plan. Contrary to a common misperception, the Affordable Care Act (also known as Obamacare) does not affect Medicare beneficiaries. But what many people don’t realize is that signing up for Medicare at 65 can be a fairly time-consuming process. You have to choose among a variety of plans and making the wrong decision can lead to substantially higher costs. So be sure to choose the most cost-effective plan for you, given your particular health and prescription-drug needs.
“Medicare has complex rules, and you should do homework to find out how they apply specifically to your enrollment needs and options, including whether it makes sense to enter the program at 65,” said Debra Whitman, AARP’s executive vice president for policy, strategy and international affairs, in a recent blog post.
If you’ve already claimed Social Security, you’ll be automatically enrolled for Medicare Parts A and B, Whitman said. If you’re delaying Social Security, then you’ll need to initiate your Medicare on your own.
“If you are beyond 65 and getting health insurance from your own or your spouse’s employer, you can probably delay Medicare enrollment until that employment ends, without risking late penalties,” Whitman said. If you’re unsure about when to enroll, try calling Social Security at 800-772-1213.
Even if you’ve been a Medicare beneficiary for awhile, take time once a year to review your plan. Whitman said she goes online every Thanksgiving to check that her father-in-law’s plan is still the best deal for him; she saved him $400 this year by switching to a lower-cost plan.
“I type in all of my father-in-law’s drugs and his favorite pharmacy to make sure there aren’t really any changes from his perspective and then I just do a cost comparison,” she said. “I really encourage people to check each year. The price increase can go up substantially over time.”
Check out the Medicare.gov page if you’re just getting started with Medicare.
2. Revisit your retirement plan. Are your finances on track? The only way to find out is to review your written retirement plan (and, if you don’t have one, to create one).
One common problem for retirees who don’t have an up-to-date plan: they’re so worried about running out of money that they fail to enjoy their retirement.
You don’t necessarily need to visit a financial planner to come up with a plan, though the right expert can make the process easier, particularly when it comes to choosing which accounts to pull income from first.