When should I sign up for Medicare?

Your Initial Enrollment Period starts 3 months before you turn 65, includes your birthday month, and extends 3 months after. If you're already receiving Social Security, you'll be auto-enrolled in Parts A and B. If not, you must sign up manually. Missing the deadline means a 10% permanent penalty on Part B premiums for each 12-month period you were eligible but didn't enroll (exception: if you have employer coverage through active employment).

Should I claim Social Security at 62, full retirement age, or 70?

Each year you delay past 62 increases your benefit by about 6-8%. Claiming at 62 gives you the smallest monthly check (permanently reduced by 25-30% from full benefit). Waiting until 70 gives you the largest check (124-132% of full benefit). The breakeven age is roughly 78-80 — if you live past that, delaying pays off. For most people with good health and other income sources, delaying to at least full retirement age is the better financial move.

How much do I need to retire at 65?

A common rule of thumb: 25x your annual retirement expenses. If you need $60,000/year (after Social Security), you need $1.5 million in savings. If Social Security covers $25,000/year and you need $60,000 total, you need 25 x $35,000 = $875,000 in savings. Healthcare costs add $5,000-$10,000/year even with Medicare, so plan for that separately.

Financial Things to Do Before 65

Before you turn 65, you face the most consequential financial decisions of your life: Medicare enrollment, Social Security timing, withdrawal strategy, and the shift from saving to spending. The difference between getting these right and wrong can be hundreds of thousands of dollars over a 25-30 year retirement.

Critical Deadlines Before and At 65

Age	Deadline	Action Required
59½	Penalty-free 401(k)/IRA withdrawals	Can access retirement accounts without 10% penalty
62	Earliest Social Security eligibility	Can claim (at reduced benefit)
64 and 9 months	Medicare Initial Enrollment begins	3 months before 65th birthday
65	Medicare enrollment deadline	Parts A & B (or face permanent penalty)
65	Medigap open enrollment	6-month window for guaranteed issue
66-67	Full Retirement Age (FRA)	Full Social Security benefit (no reduction)
70	Maximum Social Security benefit	No further benefit increase after 70
70½		Legacy RMD age (pre-SECURE Act)
73	Required Minimum Distributions (RMDs)	Must start withdrawing from Traditional 401(k)/IRA

Financial Checklist: The 5 Years Before 65

#	Task	When
1	Project retirement income (Social Security + savings + pension)	5 years before
2	Create a retirement budget (realistic monthly expenses)	5 years before
3	Maximize catch-up contributions	Ongoing
4	Consider Roth conversions before RMDs begin	5-10 years before 73
5	Pay off mortgage and all debt	Before retirement
6	Plan Social Security claiming strategy	3-5 years before claiming
7	Research Medicare options (Parts A, B, C, D, Medigap)	1 year before 65
8	Enroll in Medicare during Initial Enrollment Period	3 months before turning 65
9	Review estate plan (will, trusts, POA, beneficiaries)	Annually
10	Create a tax-efficient withdrawal strategy	1-2 years before retirement
11	Review long-term care plan	Before 65 (insurance cheaper now)
12	Test-drive your retirement budget for 3-6 months	1 year before retirement

Medicare Quick Guide

Part	What It Covers	Monthly Cost (2025)
Part A	Hospital, skilled nursing, hospice	$0 for most (paid through payroll taxes)
Part B	Doctor visits, outpatient, preventive	$185/month (standard; income-based)
Part D	Prescription drugs	$15-$100/month (varies by plan)
Medigap (Supplement)	Covers gaps in Parts A & B (copays, coinsurance)	$100-$300/month
Part C (Medicare Advantage)	Alternative to Original Medicare; includes Parts A, B, often D	$0-$100/month (but may have network restrictions)

Original Medicare (A + B + D + Medigap) vs. Medicare Advantage (Part C) is the biggest decision. Original Medicare offers more provider flexibility; Advantage plans may cost less but limit networks.

Claiming Age	Monthly Benefit (if FRA benefit = $2,500)	Lifetime Total if You Live to 85
62	$1,750 (30% reduction)	$483,000
65	$2,167	$520,000
67 (FRA)	$2,500	$540,000
70	$3,100 (24% increase)	$558,000

If you live past ~80, delaying Social Security to 70 produces the most lifetime income.

Tax-Efficient Withdrawal Order

Priority	Account Type	Why This Order
1	Taxable accounts (brokerage)	Taxed at capital gains rate (lower); preserves tax-advantaged accounts
2	Traditional 401(k) / IRA	Taxed as ordinary income; must take RMDs at 73
3	Roth IRA / Roth 401(k)	Tax-free; grows longest; no RMDs (Roth IRA)
Strategic	Roth conversions	Convert Traditional to Roth in low-income years before 73 to reduce future RMDs

Healthcare Costs in Retirement

Expense	Annual Cost (per person)
Medicare Part B premiums	$2,220
Medicare Part D premiums	$180-$1,200
Medigap premiums	$1,200-$3,600
Out-of-pocket (copays, deductibles)	$2,000-$5,000
Dental and vision (not covered by Medicare)	$1,000-$3,000
Total annual healthcare cost	$6,600-$15,000
Total healthcare cost over 20-year retirement	$132,000-$300,000

Common Mistakes That Cost Retirees

Mistake	Cost
Missing Medicare enrollment	10% permanent premium increase per year late
Claiming Social Security too early	25-30% permanent reduction in monthly benefit
No Roth conversion strategy	Higher RMDs and taxes later
Ignoring IRMAA (income-adjusted Medicare premiums)	Higher Medicare costs for higher-income retirees
Underestimating healthcare costs	$300K+ over retirement
Not having a withdrawal strategy	Paying more taxes than necessary
Retiring with debt	Monthly obligations reduce retirement flexibility
No long-term care plan	Average nursing home: $100K+/year

The Bottom Line

The 5 years before 65 are the most critical planning window of your financial life. Enroll in Medicare on time (avoid the permanent penalty), optimize your Social Security claiming age, create a tax-efficient withdrawal strategy, and plan for healthcare costs that Medicare doesn’t fully cover. Every decision made in this window compounds for the next 20-30 years. This is the time to work with a fee-only financial advisor if you haven’t already.