5 Medicare Myths That Could Destroy Your Retirement

“Always read the fine print” is a sentiment that can keep you in the know and help you avoid falling prey to myths and rumors. Medicare is no exception, so read on to learn some common “facts” and the real truth behind them.

Like Social Security, Medicare is something most will lean on during retirement to supplement – or fully cover – their healthcare needs. It’s a great federal health insurance program for older Americans (65+) and is a lifeline for many millions.

With its size and reach, Medicare is a concept known to most and because of that many myths and misconceptions have arisen. Below are the top 5 we believe can be the most damaging to your retirement if not dispelled. 

The 5 Myths

1. Medicare isn’t for those who are working: while full retirement for some is now 67, Medicare coverage can begin at age 65. This means you might continue working – utilizing employee healthcare – while enjoying the benefits of Medicare. In this case, do your research and determine if adding Medicare as soon as you are able is necessary.

2. Social Security and Medicare are tied together: while there is some truth to this, you don’t have to have Social Security to sign up for Medicare. You’re eligible for Social Security at age 66 or 67, while Medicare is available for those 65 and older. Another point to consider is that under Social Security your Part B premiums will be deducted directly. If on Medicare prior to Social Security, those premiums will come out of pocket.

3. Enrollment is always open: just like your employee sponsored healthcare plan, there is an enrollment period for Medicare, and a penalty if you don’t take advantage of it. Starting three months before turning 65 and three months after, you’ll have the option to enroll. If you don’t secure Medicare during this time, you can still enroll, but will be charged a 10% penalty on your Part B premiums each year you were eligible but did not enroll.

4. Social Security and Medicare are enough to live on: unfortunately, medical costs and general cost of living continue to skyrocket. A couple retiring in 2022 should plan to spend an average of $315,000 in health related expenses during retirement. On top of this, Social Security tends to cover about 40% of pre-retirement income. This means you would need to cut your spending by more than half if Social Security is your only source of income, while also preparing for unseen medical costs.

5. Medicare coverage is comprehensive: while Medicare Part A/B covers quite a bit in the way of hospital visits and out-patient needs, there are aspects that it won’t cover. Consider your employee health plan and the fact that it’s generally divided into health, dental and vision. Medicare covers the health portion of the three but does not cover the latter. You’ll need to look into Medicare Advantage or be prepared for out of pocket expenses.

Final Thoughts

Medicare – like Social Security – is a great government sponsored program for older and retired Americans. It’s subsidized and can help reduce expenses greatly, but it’s not perfect.

When planning for retirement, it’s paramount to be aware of all of the different nuances of the services you’re going to take advantage of. Beyond this, it’s important to not believe every anecdote, internet myth or viral social media “article”, as they often are misleading or outright untrue. 

About APO Financial 

At APO Financial, we live and breathe helping you plan for retirement. Because of this, our team’s knowledge of Medicare – as well as other retirement tools – is thorough. If you have more questions about Medicare, or your financial situation as you approach your golden years, schedule a call and let us guide you through the process.

Schedule a call here today.

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