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
| Part | Coverage | Cost |
|---|---|---|
| Part A | Hospital | Usually $0 |
| Part B | Medical | ~$175/month |
| Part C | Medicare Advantage | Varies ($0 - $$$) |
| Part D | Prescription Drugs | ~$35/month |
| Medigap | Supplements A & B | ~$150-$300/month |
Related Insurance Types
- Health Insurance - Pre-Medicare options
- Life Insurance - Evaluate continued need
- Disability Insurance - Typically ends at retirement
Related Guides
- Insurance for Pre-Retirement (55-64) - Planning before Medicare
- Insurance for Seniors (65+) - Medicare and retirement coverage
- Medicare Guide: Turning 65 - What you need to know
Frequently Asked Questions
Common questions about insurance when retiring answered below.
Frequently Asked Questions
When should I sign up for Medicare?
Sign up for Medicare during your Initial Enrollment Period—the 7-month window around your 65th birthday (3 months before, your birth month, 3 months after). Late enrollment results in permanent penalties: 10% higher Part B premiums for each year you delay. If you’re still working with employer coverage, you may be able to delay without penalty.
What's the difference between Medicare Advantage and Original Medicare?
Original Medicare (Parts A & B) is government-run with broad provider access but gaps you fill with Medigap and Part D. Medicare Advantage (Part C) is private insurance that replaces Original Medicare, often with $0 premiums and extra benefits but network restrictions. You can’t have both—choose one approach.
Do I still need life insurance after retirement?
Maybe not. Life insurance protects dependents from lost income—if you’re no longer earning and your spouse has sufficient retirement savings, you may not need it. However, keep coverage if you have dependents, estate tax concerns, or want to leave an inheritance. Let expensive term policies expire if no longer needed.
What insurance do I need if I retire before 65?
You’ll need to bridge the gap until Medicare eligibility. Options include COBRA (up to 18 months but expensive), ACA marketplace plans (subsidies based on income), a spouse’s employer plan, or retiree health benefits if offered. Plan carefully—this can be your biggest early retirement expense.
Does Medicare cover long-term care?
No, Medicare does not cover long-term care like nursing homes, assisted living, or extended home care. You need separate long-term care insurance, which is best purchased in your 50s-60s before health issues arise. Alternatively, some retirees self-insure or use hybrid life/LTC policies.
What's the penalty for late Medicare enrollment?
Part B late enrollment penalty: 10% higher premiums for each 12-month period you delayed (permanent). Part D penalty: 1% of national base premium for each month without creditable drug coverage. These penalties last for life and can add up to hundreds of dollars per year.
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This checklist is for educational purposes. Consult with a licensed insurance professional and a Medicare specialist for advice specific to your situation.
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