So, the big day is coming, and you are turning 65. You may be planning a special celebration or maybe a long-awaited dream trip. Whatever your birthday plans include there are some practical things to consider that will impact your future finances and healthcare tremendously. While some of these decisions can be put off that option may cause penalties and higher costs. So, let’s get some things off your to-do list and move on to celebrating!
Determine your working status-Your first decision is whether you are still going to continue working or retire. Did you know that continuing to work can affect your retirement benefits? Now is the time you should talk to your Human Resources or Benefits department to understand your company’s policies. Gather all this information and follow up by meeting with a financial professional to help guide you with all the aspects of timing your retirement and Social Security payments.
Plan your Social Security benefits claim. Full retirement age is dependent on your birth year and is when you can claim your full Social Security retirement benefits. Some people claim reduced benefits as early as age 62, while others wait until after full retirement age (up to age 70) to claim higher benefits. Deciding what works best for you, your dependents, and your survivors takes a little planning.
Enroll for Medicare Part A and B-Almost everyone who is 65 and older is eligible for Medicare Part A (inpatient care) and Medicare Part B (outpatient care). You can sign up as early as 3 months before your 65th birthday to ensure your coverage begins when you are eligible.
Consider private Medicare coverage and drug plans-While original Medicare (Part A & B) will cover about 80% of your healthcare cost there are different plan options through private insurance companies available. You may have heard some different plans and terminology in this realm but due to its complexities and regulations it is best to discuss your options with a Medicare specialist. In addition you need to know that if you do not have credible coverage and chose not to enroll in part B or for prescription drug coverage you may owe a late enrollment penalty that can last for your entire life. Credible coverage is considered insurance as good as or better than original Medicare.
Find out about extra help if you have low income and few assets. There is both full medical coverage and direct financial help available to people 65 and over who have low income and few assets other than their homes. Medicaid can pay the full cost not only for medical care but also for long-term home care and nursing home residence. For drug coverage there are solutions available through state programs which can be applied for. Some of these options do not have an asset test and go by income only.
Get your legal documents in order. Although most 65-year-olds still have many years to live, a sudden illness or accident can make decision making difficult if not impossible. Getting your legal documents in order can make sure your wishes are followed with regard to healthcare, including end-of-life care, your ongoing finances, and your estate. These documents include a will, a power of attorney for finances, an advance medical directive (also called a living will), and perhaps a living trust. Not only does this provide peace of mind for yourself but also for your family.
This is only the tip of many options available to you that may be of assistance. Read part 2 of this blog to learn about some other options, such as Long Term Care, Hospital indemnity plans, Final expense insurance, Cancer, Heart Attack and Stroke policies.