Medicare Open Enrollment — Insight for Pre-Retirees

Education is key to feeling confident about your retirement decisions. As a pre-retiree, it’s time to gain a solid understanding of the timelines associated with retirement to build a clear plan.

 Medicare is one piece of the retirement puzzle and this time of year, we hear about open enrollment — but who is that actually for and what does it really entail? If you plan to retire in the coming year, is there something you need to do?

Medicare Open Enrollment Overview — Who’s It For?

Open enrollment is primarily for people who are already enrolled in Medicare. As a reminder, Medicare eligibility is based on your birthday. You can sign up for Medicare up to 3 months before turning 65. By doing this, your coverage starts on the 1st day of the month you turn 65. If you wait to enroll until your birthday month, coverage will start the first day of the next month.

 Now back to open enrollment, which spans from October 15th — December 7th. You’ll receive a notice in the mail explaining any upcoming changes to your plan, cost, or service area. You can also log into your Medicare account to review pertinent updates and make changes.

What Open Enrollment Is For

Open enrollment is a time for reflection, review, and planning. It’s an opportunity to make changes to your existing Medicare coverage plan. Someone enrolled in Original Medicare, Parts A and B, may choose to transition to a Medicare Advantage Plan if out-of-pocket expenses were higher than expected, especially in the areas of vision, hearing, or dental. Be aware that if you are on an Original Medicare plan you may be required to go through a physical exam to change to another Medicare plan. For example, if you are on Plan N and want to move to Plan G you may be denied coverage if you can not pass the physical. Open enrollment does not allow for you to simply change from one plan to another. 

If new, costly prescriptions have been added to your regime, it may be time to consider a different Medicare Part D, prescription drug coverage. While most people are using this opportunity to expand their coverage, others may find they are over protected. This is mostly likely to happen if you had chosen a Medicare Advantage Plan which very greatly as they are Medicare-approved plans from private companies.

It’s important to consider costs, understand where you are spending money for medical expenses, and plan for the future. If only we had a crystal ball, medical expenses are hard to plan for, leading many to lean on the side of extra coverage.

Use This Knowledge To Prepare for Retirement

If you’re planning to retire soon and are not yet a Medicare participant, there’s no need to be too worried about the open enrollment buzz. But at the same time, you want to be prepared for the transition, so be sure to register before your birthday month to avoid any coverage gaps if you plan to participate when you turn 65. 

As a pre-retiree, it’s also important to understand that although Medicare does provide extensive coverage at a low cost; it will not cover all medical expenses. According to an AARP study, in 2017, people with traditional Medicare spent an average of $5,801 on insurance premiums and medical services. One in 10 people on Medicare spent at least $10,268.

While Medicare premium costs fall in a general range for most, your premium is calculated by The Social Security Administration. SSA conducts a 2-year look-back into your tax returns to determine your Medicare premiums. This means 2021 premiums are based on your 2019 tax return. We did a deep dive into Medicare premiums, follow this link to gain a better understanding of how premiums are calculated.


If you have Medicare on your mind or are wondering how you should plan for those unforeseen medical expenses of the future — it’s time to create an all-encompassing plan that allows you to retire with confidence. By scheduling a no-obligation call with an Integrated Wealth Management financial advisor, you can determine if we’re the best fit for your finances.


About Integrated Wealth Management

Integrated Wealth Management is a fee-only firm based in Delaware offering wealth management and retirement planning services. With 2 locations in Wilmington and Rehoboth Beach, no matter where you are in Delaware, we’re here to serve your retirement planning needs. Through integrated financial planning, investment management, and tax minimization strategies, we want you to enjoy retirement to the fullest.

We’re here to guide you through the 3 stages of retirement:

  1. Uncertainty Stage: When you are within 10 years of retirement and have questions about how to make it work

  2. Stability Stage: When you have reached the financial milestone to retire comfortably and confidently

  3. Reflection Stage: When you are looking to leave a legacy

We are also here to provide experienced, empathetic support during times of loss, such as the death of a life partner. You need confidence and a sense of security to enjoy retirement. As fiduciaries with a fee-only structure, we never receive commissions. Free of ulterior motives, you can be sure we’re focused on your goals.

 

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