Last Updated Jun 10, 2011 12:39 PM EDT
Welcome to the second half of Week Ten in my series, 12 Weeks to Plan Your Retirement. My previous post discussed how to address medical costs before age 65. This post covers eight essential steps you'll want to take as you approach your 65th birthday regarding Medicare and medical insurance; it also provides links to helpful resources.
First, you'll want to understand the four parts of Medicare:
- Part A: hospital insurance
- Part B: physician and outpatient coverage
- Part C: Medicare Advantage (MA) plans
- Part D: coverage for prescription drugs
Now it's time to begin your homework.
Step 1: Check Your Eligibility
Your first step is to make sure you or your spouse has paid FICA taxes for at least 40 calendar quarters -- this qualifies you for free Medicare Part A coverage. If you haven't worked that much and don't qualify, you can purchase Medicare Part A, but it will be costly. The premium in 2011 is $248 per month if you paid FICA taxes for 30 to 39 calendar quarters, and $450 per month if you paid FICA taxes for fewer than 30 quarters. If you're close to these thresholds, you might consider continuing to work and pay FICA taxes to either reduce or eliminate your Medicare Part A premiums.
Your next step is to determine when to enroll; click to the next page for details.