Retiring After 65

If you decide to retire after you’re 65, it’s important to understand some of the nuances of Medicare.

You’re not required to sign up for Medicare when you turn 65. You can choose to defer the coverage until you actually retire.

When you retire, you’ll enter a Special Enrollment Period (SEP), which lasts for eight months starting on the last day of your current coverage or your last day of employment, whichever comes first. During the SEP, you can sign up for Medicare Part B, usually without penalty. To sign up for Medicare Part B, visit the Social Security website. Once you are signed up for both Parts A and B, you can review your Medicare supplemental plan options and enroll in new coverage.

Late Enrollment Penalties

Medicare Part B

If you don’t enroll in Medicare Part B during your SEP or when you turn 65, you may face a late enrollment penalty. When you do enroll, you’ll pay that penalty for as long as you have Part B. The penalty is an extra 10% added to your Part B premium for each 12-month period you declined to enroll after your SEP. If you enroll in Part B during your SEP, you usually don’t incur a penalty.

Medicare Part D

Part D refers to plans that cover your prescription drugs. It can be a stand-alone Part D plan or bundled into a Medicare Advantage plan, also called an MAPD plan. Similar to the Part B penalty, the surcharge is added to the premium for your prescription coverage. Unlike Part B, you can’t enroll then defer when you are first Medicare-eligible.

To avoid the penalty, enroll in prescription drug coverage when you retire and choose your Medicare supplemental coverage. Even if you don’t take prescriptions, it’s a good idea to enroll to avoid the late enrollment fee.

Some employers and unions do offer prescription drug coverage during retirement. This isn’t common, but if you have this option and choose to switch to a Medicare plan with prescription drug coverage, you will not pay a penalty if you can show you have creditable coverage. This is a document provided by your former employer, union, or insurance carrier.

If you have questions, please call Via Benefits at 1-833-939-1209 (TTY: 711), Monday through Friday, 8:00 a.m. to 9:00 p.m. Eastern time.