It is important to be prepared to handle your medical expenses when you reach your retirement years, and of course Medicare is something that many people are going to be relying on. It would be logical to assume that you become eligible for your full Social Security benefit and Medicare simultaneously, but the reality is that this is not the way that the system is set up.
People become eligible for full Social Security benefits at different times based on when they were born. Some would say it is unfair and it makes no sense, but this is how it works. If you were born between 1943 in 1954 you can receive full retirement benefits when you are 66. If you were born after this you have to wait longer. The full retirement age goes up by two months per year after 1954, culminating in 1960. People who were born in 1960 and after receive their full benefit when they turn 67. However, Medicare is more “democratic.” All Americans become eligible for Medicare when they reach the age of 65.
Many people mistakenly believe that they will never have to put out another cent for health care once they begin to receive Medicare coverage, but the reality is that Medicare does not take care of everything. If you have paid into it sufficiently Medicare Part A comes without any out-of-pocket cost, but there are a total of four parts. Medicare Part B costs about $100 a month at this time, and you need this to be able to see a doctor or receive outpatient care. Medicare Part C enables you to become part of a health services network that is in essence subsidized by your Medicare entitlement but you must pay additional monthly premiums and co-payments in some cases. Medicare Part D is a prescription plan that also requires out-of-pocket expenditures.
It should be noted that Medicare does not pay for long-term care, and this is something else you may want to keep in mind. Negotiating these waters when you’re planning for your retirement can be quite complicated. The laws are changing all the time, and if you’re paying attention there is a lot of talk in Washington about significant alterations. If you want to plan intelligently, the wise course of action would be to do so with the assistance of an experienced retirement planning attorney.