If you’re turning 65 soon, you’re likely thinking about Medicare. And while it might seem like a health-only decision, Medicare is actually a financial decision too—one that deserves the same thoughtful planning as your investments and retirement income strategy. If you don’t consider the financial side of Medicare, you could end up choosing a plan that puts your hard-earned savings at risk.
Before you enroll, it’s essential to sit down with your CPA or financial advisor and have a real conversation about how Medicare fits into your retirement plan. Here are four important discussions that can make all the difference in choosing the best Medicare plan for 2025—one that supports both your health and your wallet.
1. What Can You Afford—Now and in a High-Cost Year?
Start by asking your financial advisor what your overall budget is for healthcare—not just what you can afford to pay in monthly premiums, but also what you could handle in the event of a high-cost year. This is where Medicare plan comparison really matters. For example, Medicare Advantage plans usually have lower premiums, but higher out-of-pocket costs if you get sick. On the flip side, Original Medicare paired with a Medigap policy typically means higher premiums but much lower surprise costs—and fewer denials of care. The key question is: what can you realistically afford both monthly and in a year where your healthcare costs are unexpectedly high? You want to be sure you’re choosing a plan that won’t force you to decide between getting the care you need or protecting your retirement savings.
2. How Do Medicare Costs Compare to Your Current Insurance?
If you are working past 65 and have employer health insurance that meets Medicare rules, another important conversation to have is how your future Medicare costs will stack up against your current employer health insurance. If your advisor determines that you can afford, for example, $500 per month on total healthcare costs, it’s helpful to compare that figure with what you’re currently paying through your employer coverage. Many people are surprised to learn that Medicare often ends up costing less overall—especially when factoring in both premiums and out-of-pocket expenses. However, that’s not always the case. Some people, particularly those with high incomes or employer-sponsored plans that are fully covered, might see their costs increase after switching to Medicare. Understanding this comparison helps you budget accurately and plan ahead, including what you could do with any extra savings from lower costs.
3. Will Your Income Cause You to Pay More for Medicare?
This is where working with your CPA becomes crucial. Medicare premiums are tied to your income, and if you’re earning over about $100,000 as an individual or $200,000 as a couple, you’ll pay what’s called IRMAA surcharges—a premium penalty for higher-income beneficiaries. Medicare looks at your income from two years prior, which means decisions you and your financial advisor make now—such as Roth conversions, 401(k) withdrawals, or severance payouts—can significantly impact what you’ll pay when you enroll. I’ve seen people surprised by unexpected costs because of these income-triggering events. One woman took money out of her 401(k) to buy a condo and was frustrated to find that her Medicare premiums went up by $5,000 a year. These decisions may still make sense for your broader financial plan, but they need to be made with Medicare’s rules in mind to avoid surprises.
4. What’s Your Plan for Long-Term Care?
The last conversation is perhaps the most overlooked: how will you handle potential long-term care expenses? Many people assume Medicare covers long-term care—but it doesn’t. If you or your spouse need extended help with daily living activities down the road, those costs will fall to you unless you have a plan. That plan might include long-term care insurance, self-funding through assets, or leveraging other resources depending on your financial situation. It’s different for everyone, which is why it’s so important to talk this through with your trusted financial advisor. Medicare may be the missing piece in many retirement plans, and discussing long-term care ensures that your healthcare strategy is truly complete.
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