Retirement Insurance Checklist

Retirement brings major changes to your insurance needs. Health coverage transitions from employer plans to Medicare, and your focus shifts from income protection to asset preservation. Use this checklist to ensure you’re properly covered.

12-6 Months Before Retirement

Medicare Planning (Essential)

• Understand you’re eligible for Medicare at age 65
• Initial Enrollment Period: 7 months (3 before, birth month, 3 after)
• Late enrollment means permanent penalty (10% per year late for Part B)
• Research Original Medicare vs. Medicare Advantage options
• Understand Parts A, B, C, and D

Healthcare Gap Assessment

• If retiring before 65: Plan for gap between employer coverage and Medicare
• Options: COBRA, ACA marketplace, spouse’s plan, retiree health benefits
• COBRA: Up to 18 months but expensive (full premium + 2%)
• ACA marketplace: May qualify for subsidies based on retirement income

Employer Benefits Review

• Check if employer offers retiree health benefits
• Review what happens to life insurance (often ends or reduces)
• Understand pension or 401(k) distribution options
• Clarify COBRA eligibility and costs

Medicare Enrollment (At Age 65)

Medicare Part A (Hospital Insurance)

• Most people get Part A premium-free (if 10+ years of work)
• Enroll even if still working (no penalty for delaying Part A)
• Covers: hospital stays, skilled nursing, hospice, home health

Medicare Part B (Medical Insurance)

• Standard premium: approximately $175/month (2024)
• Higher income = higher premium (IRMAA surcharges)
• Enroll during Initial Enrollment Period to avoid penalty
• Covers: doctor visits, outpatient care, medical equipment

Medicare Part D (Prescription Drugs)

• Separate enrollment required
• Compare plans annually during open enrollment (Oct 15 - Dec 7)
• Check that your prescriptions are covered (formulary)
• Penalty for late enrollment if you go without creditable coverage

Medicare Supplement (Medigap) OR Medicare Advantage

• Choose one approach (can’t have both)
• Medigap: Supplements Original Medicare, more flexibility, higher premiums
• Medicare Advantage: Replaces Original Medicare, often $0 premium, network limits
• Best time to buy Medigap: 6-month open enrollment starting at 65

Within First Year of Retirement

Review All Insurance Policies

• Life insurance: Do you still need it? (No dependents, mortgage paid off)
• Disability insurance: Ends at retirement (no longer protecting income)
• Long-term care insurance: Consider while still healthy enough to qualify
• Umbrella liability: Still important to protect accumulated assets

Life Insurance Decisions

• Term life may be expiring around retirement age
• Consider if you still need coverage (dependents, estate taxes, legacy)
• If not needed, let term policies expire (don’t pay for unneeded coverage)
• If needed, consider guaranteed universal life for permanent coverage

Long-Term Care Insurance (Important Decision)

• Covers: nursing home, assisted living, home health care
• Medicare does NOT cover long-term care
• Best to buy in your 50s-60s (premiums increase with age)
• Options: traditional LTC, hybrid life/LTC policies
• Consider: Can you self-insure? What’s the risk of needing care?

Ongoing Retirement Insurance Management

Annual Medicare Review

• Review during Open Enrollment (Oct 15 - Dec 7) every year
• Compare Medicare Advantage plans and Part D options
• Check if your doctors and drugs are still covered
• Evaluate if switching plans would save money

Protect Your Assets

• Maintain umbrella liability insurance ($1-5 million)
• Review homeowners insurance coverage amounts
• Consider downsizing and adjusting coverage accordingly
• Protect against identity theft and fraud

Estate Planning Insurance Review

• Review life insurance beneficiary designations
• Ensure policies align with estate plan and will
• Consider irrevocable life insurance trust (ILIT) for estate tax planning
• Review and update all beneficiaries annually

Early Retirement (Before Age 65)

Health Insurance Gap Solutions

• COBRA: 18 months coverage (expensive - 102% of full premium)
• ACA Marketplace: Subsidies available based on income
• Spouse’s employer plan: If spouse is still working
• Retiree health benefits: If offered by former employer
• Health sharing ministries: Alternative, not traditional insurance

ACA Marketplace Planning

• Subsidies based on Modified Adjusted Gross Income (MAGI)
• Manage retirement account withdrawals to stay in subsidy range
• Roth conversions count as income and affect subsidies
• Plan carefully to maximize healthcare subsidies

Special Enrollment Period

• Losing employer coverage is a qualifying life event
• 60 days to enroll in ACA marketplace plan
• Don’t miss this window or you’ll wait for open enrollment

Insurance You May No Longer Need

Typically Can Cancel

• Disability insurance (no longer earning income to protect)
• Term life insurance (if no dependents or debts)
• Collision/comprehensive on older vehicles (if paid off)
• Mortgage life insurance (if home is paid off)

Typically Should Keep

• Health insurance (Medicare + supplemental)
• Homeowners/renters insurance
• Auto liability insurance
• Umbrella liability insurance
• Long-term care insurance (if you have it)

Common Retirement Insurance Mistakes

• Don’t miss Medicare enrollment deadlines (permanent penalties)
• Don’t assume Medicare covers everything (it doesn’t - get supplemental)
• Don’t forget about prescription drug coverage (Part D)
• Don’t wait too long to buy long-term care insurance
• Don’t keep paying for insurance you no longer need
• Don’t ignore the healthcare gap if retiring before 65

Medicare Quick Reference

Related Insurance Types

• Health Insurance - Pre-Medicare options
• Life Insurance - Evaluate continued need
• Disability Insurance - Typically ends at retirement

This checklist is for educational purposes. Consult with a licensed insurance professional and a Medicare specialist for advice specific to your situation.