With deadlines to meet, acronyms to learn, and multiple paths to choose from, it’s easy to feel overwhelmed by Medicare. But making the right choices for your healthcare in retirement can have a significant impact on your financial future.
We’ve expanded on the most frequently asked questions we receive from clients to provide a roadmap for your planning process.
Medicare comes with various costs, including premiums, deductibles, co-pays, and co-insurance. A critical factor that directly impacts your premiums is IRMAA (Income-Related Monthly Adjustment Amount). If your modified adjusted gross income (MAGI) from two years prior exceeds certain thresholds, you will pay a higher premium for Medicare Parts B and D.
Because IRMAA is based on your income, a well-structured financial plan can potentially help manage your MAGI in early retirement years, thus managing your future Medicare costs. We encourage you to see the connection between your investment strategy and your healthcare expenses.
Once you understand the basic parts of Medicare (A: Hospital, B: Medical, D: Prescription Drugs), the biggest choice you face is how to address the gaps in coverage:
Original Medicare + Medigap (Supplement)
Parts A & B from the government, plus a private Medigap plan to cover deductibles, co-pays, and co-insurance.
Offers the most freedom, allowing you to see any doctor in the U.S. that accepts Medicare. Generally a higher monthly premium with predictable costs.
Medicare Advantage (Part C)
A single plan offered by a private company that contracts with Medicare, replacing Original Medicare. It must cover everything A & B cover, and often includes extra benefits (vision, dental, hearing).
It usually has a lower or $0 premium but often limits you to a specific network of doctors and requires co-pays for services. Costs are managed through co-pays/co-insurance as you go.
Weighing these options is not a one-size-fits-all proposition. The right choice depends on your health needs, budget, and travel habits. We help you evaluate your options and select the path that aligns with your personal and financial objectives.
Medicare is always shifting. In fact, there’s a new $2,100 out-of-pocket cap on what you’ll spend for covered prescription drugs.
This cap, which will be fully implemented in 2026, is designed to protect beneficiaries from catastrophic drug costs. While it is a positive change, it shifts the financial burden of high-cost drugs. Understanding this and other changes now allows you to adjust your retirement budget and planning accordingly. Proactive planning prevents unexpected expenses.
One of the most common and costly mistakes is missing your Initial Enrollment Period (IEP). If you fail to enroll in Part B (and sometimes Part D) when you are first eligible, you could face lifelong late enrollment penalties.
The penalty is added to your premium for as long as you have Medicare.
Your enrollment is restricted to certain times of the year, leading to potential gaps in coverage.
Recognize common pitfalls such as missing enrollment windows, assuming all costs are covered, or not accounting for supplemental plans. If you are approaching age 65, your enrollment timeline is critical.
Jeffrey Trombly, Vice President, Senior Portfolio Manager and Medicare Specialist, has a deep understanding of how healthcare choices connect with long-term wealth strategies.
If you are an individual approaching age 65 and have questions, Jeff is available to help you build your retirement healthcare strategy. You can reach him by emailing: jeff.trombly@ledyard.bank.
Jeff is also hosting Medicare Planning With Confidence, a 30-minute webinar on October 29. Register to join.
ONWARD