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A significant birthday can lead you to take stock—and take action, research has found. In this series of stories, you’ll see how to apply that newfound motivation to your finances at age 50, 60, and 65.
Age 65 may be shorthand for the traditional retirement age and all the joys that come with not working 9-to-5 anymore—kicking back, traveling, bouncing grandchildren on your lap. But there’s nothing traditional or predictable about what you’re doing at this age anymore.
First off, 65 is no longer the age at which you can collect your full Social Security benefits; it’s 66 for those born in 1953.
There’s a good chance, though, that you may already have left the full-time workforce (early 60s is the typical retirement age) or have started collecting Social Security (the most popular age to claim is 62).
But if you are still working—and the numbers of employees staying on the job past 65 is growing—you may, like more than half of working boomers today, be planning on collecting a paycheck well into the second half of your sixties or to 70 and beyond.
Still, this is a crucial psychological milestone for your money and a critical practical one for your healthcare. Plus, based on the averages, you have another two decades or so of retirement to look forward to. So use this birthday to do a status check of your financial plans and adjust as needed.
1. Sign up for Medicare
This is the most urgent item on your checklist this year. If you’re already receiving Social Security benefits, you’ll be automatically enrolled in Medicare when you turn 65.
If you haven’t claimed Social Security yet and aren’t doing so now, you’re in the middle of a seven-month window to sign up for all types of Medicare: Part A (hospitals), Part B (doctors), Part C (Medicare Advantage), and Part D (prescription drugs).
What’s called your initial enrollment period starts three months before your 65th birthday and goes for three months after your birth month. If you fail to sign up for Medicare then, you may face higher premiums, coverage delays, or other hassles later on.
Also, when you turn 65 and enroll in Medicare Part B, the clock starts on another enrollment period: You have six months to buy a private Medicare Supplemental policy (or Medigap) and be guaranteed access to any plan.
If you’re still working and have health insurance through your job, you may be able to wait to sign up for Medicare, but ask. “One thing people don’t understand is that some group plans can force you to sign up for Medicare Part B when you turn 65, even if you remain employed with the company,” says Ted Toal, a financial planner in Annapolis, Maryland.
You can find more information on medicare.gov. Or you may want to work with a health insurance broker licensed to sell private Medicare plans. If you buy a private Advantage or Medigap plan, your costs will be the same whether you buy directly or through an agent.
“It’s very confusing, and you’ll be getting a ton of mail soliciting your business,” says Kristi Sullivan, a financial planner in Denver. “It’s just better to have a neutral third party sit down and say, ‘What are your health issues, what drugs are you taking, and how important is it that you have specific doctors?’”
2. Revisit your retirement timing
If you had figured on retiring around now, are you still enjoying your work? If you’ve retired already, is it what you imagined?
“My dad thought he was going to retire and play golf all the time,” says Sean Pearson, a financial planner with Ameriprise Financial in Conshohocken, Pa. “He didn’t enjoy it—he went back to work. Sixty-five is a good time to sit down and think, ‘Is what I wanted at 45 still the same thing I want now?’ ”
You might find that there’s a middle ground between total retirement and a full-time job, such as consulting in your field. Or perhaps your employer would keep you on (or take you back) part-time.
Even a small income for a few years will let you stretch out your retirement savings or delay claiming Social Security—or, if you have started already, suspend your checks—letting your benefit build.
3. Plan to simulate a paycheck
Once you do retire, you need to create a steady income stream that mimics a regular paycheck through a combination of Social Security, withdrawals from your retirement savings accounts, and possibly a traditional pension or annuity.
By age 65, you’ve been able to collect Social Security for three years, but you’re still a year away from getting your full benefit. If you have a pension, 65 is the traditional age to start taking your full benefit.
If you’re unsure of how and in what order you want to withdraw funds, this is a good time for a checkup with a financial advisor.
You can look for advisor in your area via the Financial Planning Association, the National Association of Personal Financial Advisors (NAPFA), or the Garrett Planning Network. Many will charge by the hour or a flat project fee to help you put a plan together.
4. Step up your exercise routine
Think this isn’t a financial move? Think again.
You’re heading into an era of high health costs. In the 2018 Retirement Confidence Survey from the Employee Benefits Research Institute, 44% of retirees reported spending more than expected on health care. The average 65-year-old couple will spend $280,000 on health care in retirement, including insurance premiums, according to Fidelity.
The financial toll of poor health is all the more reason to devote time to taking care of yourself, and research finds that it’s not too late to start.
A 2013 study published in the British Journal of Sports Medicine, which tracked a group of seniors over eight years, concluded that taking up physical activity later in life is associated with better health overall. And a recent study in the journal Circulation found that regular aerobic exercise helped previously sedentary middle-age adults decrease their risk of heart failure.
5. Claim your discounts
You’ve been able to collect “senior” discounts when you shop, dine out, or travel for years, but, depending on your state, you may now be eligible for property tax discounts or credits.
In Texas, for instance, residents age 65 and over get an extra $10,000 exemption from school taxes. In Illinois, those 65 and older may have the assessed value of their home lowered by $5,000, among other things.
Check with your local tax assessor to see whether you qualify for any savings.
6. Review key legal documents
Assuming you already have a will, financial and healthcare powers of attorney, and a medical directive—and if you don’t, it’s critical to take this step—now’s the time for a review, and to update and revise, as needed.
“It’s [about] making sure all your assets are titled the right way, the people you’ve named are still the people you would entrust, the way you’re leaving assets to people still makes sense, and that you’re on top of your own medical wishes,” says Danielle Van Ess, an estate planning attorney in Hingham, Mass.
7. Let everyone know who’s on your team
If you or your spouse suddenly became incapacitated or died, would your children know whom to contact to manage your affairs? If you haven’t already, create a list of your financial accounts, plus user names and passwords so they can be accessed, and tell your family where it is. (For advice on what to tell your adult children about your money, go here.)
“Make sure your adult children or other people you’ve named in your plan know your CPA, your financial advisor, and where they can turn for advice when they need it,” Van Ess says.
