Preparing for Medicare: Know when to enroll to avoid extra costs and penalties

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Preparing for Medicare:  Know when to enroll to avoid extra costs and penalties

By Robert Wasky, Medicare Planning Specialist


Sixty-five traditionally signifies retirement and the beginning of your eligibility to receive Medicare benefits.  But the timing and process for enrolling will differ based on each individual’s situation.  Sorting through your options may be time consuming and confusing, but worthwhile, as mistakes can be costly and last a lifetime.

There are many facets to understanding Medicare…benefits, costs, supplemental insurance plans, etc. … this article focuses on the timing for enrollment.

Once you understand the options, it’s imperative to select the best one based on individual circumstance.  We strongly advise that you consult a knowledgeable Medicare planning resource for help.


Question: What is Medicare and should I sign up when I turn 65?

Part A

Medicare Part A helps pay inpatient hospital and skilled nursing facility expenses and is usually premium-free.  If qualified for premium-free coverage, in most circumstances it makes sense to enroll at 65.  Even if remaining on employer coverage, Medicare Part A will coordinate with current benefits so there is usually no downside.

Exception, if you want to continue contributing into an HSA while remaining on employer plan, you cannot be enrolled in any part of Medicare.

Part B

Part B helps pay medical costs such as doctors and health providers, and carries a monthly premium based on income.  While most people enroll at age 65, since Part B isn’t premium-free (unless you qualify for Medicaid), it makes sense to delay enrollment and avoid paying the monthly Part B premium under certain circumstances, mainly when remaining on group insurance.

If you have credible coverage through your employer or spouse (and that employer has 20 or more employees), you can usually delay enrolling in Part B until you leave the group plan.  When ready to transition to Medicare, there is a Special Enrollment option (summarized below) for enrolling in Part B without penalty or gap in coverage.

However, be aware that there are several exceptions.  If enrolled in Cobra or a retirement plan, you will need both Medicare A and B right away.  Moreover, often people find Medicare and Supplemental insurance a better option to their group plan and opt for Medicare when first eligible.

If considering delaying Part B or leaving employer plan for Medicare and supplemental insurance, speak to us to make sure you aren’t making a mistake and incurring penalties.


Know your Medicare Enrollment Periods

There are three ways to enroll in Medicare.

Initial Enrollment Period (IEP)

The Initial Enrollment Period is the first opportunity for most people.  IEP is a seven-month window that begins three months before the month of your 65th birthday and continues for three months after. During this time that you can enroll in Part A and Part B and a Part D drug plan or a Medicare Advantage Plan.  If your birthday is on the first of a month, eligibility starts the prior month.

Special Enrollment Period (SEP)

The Part B SEP is an eight-month period to enroll in Part B after you no longer have coverage from current work (employer insurance.)  There is no late enrollment penalty if using the Part B SEP option.  You also have 63 days after employer coverage ends to enroll in a Part D prescription plan and avoid gaps or penalties.


General Enrollment Period (GEP)

You can enroll during the Medicare General Enrollment Period (GEP) if you missed your Initial or Special Enrollment periods.   You can sign up for Medicare A and B between January 1st and March 31st of each year and coverage starts July 1.  This option almost always carries a lifetime late enrollment penalty for Part B of 10% of the standard Part B premium cost for each full year enrollment is delayed.

Reminder – even if you have great employer coverage and plan to continue working beyond 65, there must be 20 or more employees at your company for Medicare to consider this creditable coverage.


Key Takeaways

Medicare is confusing and made even more so by the mounds of advertisements and marketing materials cluttering our lives.  For anyone approaching eligibility for Medicare, we suggest you be proactive in seeking information and then finding an independent, objective resource to help evaluate your situation and best options.

Once on Medicare, the next step is to evaluate the many choices for obtaining supplemental coverage that coordinates with Medicare.  This important topic is a critical component of your retirement planning.

Seek out the right guidance for making informed choices and avoiding potential late enrollment penalties.

Robert Wasky is an independent Medicare Specialist and licensed insurance professional.  If you have questions related to this column or other related topics, we invite you to call him at 973-975-0064 or email

Tips to Help Stop the Robocalls

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Sick of getting unsolicited calls from unknown numbers? I think we all are. According to the Federal Trade Commission (FTC), robocalls are the number one complaint by far.1 While the robocalls crisis will never be totally fixed, fortunately there are multiple solutions to try and help slow down, if not eliminate, these automated phone calls.

  1. Don’t answer – or just hang up

The more you engage, your chances of being called again increase. This is partly due to the fact that your engagement shows on their record that they have reached a working line. This evidence of human interaction is what prompts them to keep you on a call list.

  1. Call-blocking services

Cellular carriers such as Verizon, AT&T, Sprint and T-Mobile all offer call-blocking services that attempt to reduce the frequency of automated calls. There are also third-party applications that can help to decrease unwanted robocalls such as Nomorobo, RoboKiller, Trucaller, among others.2 According to RoboKiller, 5.3 billion robocalls were made in July of 2019 – an overall total of almost 4,000 calls per second. That’s nearly 22 spam calls for every person.3

  1. Sign up for the Do Not Call list registry

The FTC has a Do Not Call list that people have the opportunity to register for – both landline and mobile phone compatibility. The one downside to this national registry is that it won’t stop scammers from calling, but rather those equally-as-irritating telemarketing calls. Given that robocalling is already illegal, this means that valid companies who abide by the list will not be contacting you.

  1. Block unknown numbers manually

Both iOS and Android phones are capable of manually blocking numbers through their settings. One detail to make note of is that it is not yet possible to block calls that are labeled Unknown, No Caller ID or Private.






Millennials Are Planning For Retirement Decades Early

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Contrary to popular belief, there is hope for the millennial generation – at least when it comes down to retirement savings. Studies have shown that the median millennial retirement fund increased by 400% from 2007 to 2017, a growth that far surpasses that of the Baby Boomers and Generation X.1 Additionally, Millennials start saving for retirement, on average, at the early age of 24. Gen X and Baby Boomers didn’t start saving until an average of 30 years old.2

In fact, there is an entire movement amongst frugal young Americans referred to as the “Financial Independence/Retire Early” movement or FIRE. The driving force behind the movement is to encourage and support the youth of America in their efforts to live sensibly and save a high percentage of their income to achieve financial independence at a faster rate down the road. 3

According to Transamerica Center for Retirement Studies, 80% of Millennials are skeptical about Social Security and concerned that they may never see their benefit.5 This may be one of the reasons why FIRE has become a widespread trend among the younger generation.

The basis of this trend is simple: it all depends on how you save, spend and invest.4 Some of the key points about achieving financial independence and longevity include:

  • Maximizing savings and reducing spending
  • Invest knowledgeably and mindfully to grow your assets
  • Fully understand the challenges

Reduce Spending for Maximum Savings

One of the easiest ways to maximize your savings is to decrease your expenses. Keeping track of your spending is a great way to visualize the dollars you spend on non-essentials. It’s imperative to be honest with yourself about your spending habits, as well as making goals that are reasonable and reachable for your lifestyle – both now and into the future.


Saving is just one part of the equation. Investing your savings to build your assets is a great way to accumulate more funds for retirement. Making knowledgeable investing decisions gives people the opportunity to positively impact their finances, but it is vital to work with someone how is educated in the field of investing.

Recognizing Obstacles

Be sure to take into consideration the different aspects of retirement, such as health insurance. You are unable to register for Medicare until age 65, so if you retire at 40, you will most likely need to purchase insurance from a private market. Purchasing from a private market can be expensive, and it’s important to that in mind.







Are you checking your Social Security statement?

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Americans have the ability to request their Social Security statement. This is an important piece of the retirement puzzle to be checking because you want to make sure your future benefits are actually reflecting what you have earned over your working life.1

The Social Security Administration (SSA) made the shift from mailing people their statements to electronically delivering people their statements – something that many aren’t thrilled about. According to a report by the SSA inspector general, only about half of the 39 million people who are signed up to receive electronic Social Security statements have actually checked their earnings report.2 These findings suggest that people are not inclined to check their Social Security statement because it is no longer being mailed to them periodically, as it was in previous years.

Today, your Social Security statement can be obtained through the Social Security Administration website, all you need to do is create a mySocial Security account. Checking your Social Security statement can greatly help you assess how much money you are going to need during retirement, and it’s important to stay informed about your financial situation – even if your retirement is years away.

Your Social Security statement contains the following3:

  • Your retirement benefit at your full retirement age of 67 (generally)
  • Retirement benefits if you delay collecting until age 70 (highest benefit you can receive)
  • Retirement benefits if you begin taking benefits at age 62 (the earliest you are eligible for retirement benefits)
  • Your disability insurance benefit (if needed)
  • Survivor benefits for your family (if applicable)
  • Along with other useful information such as your earnings record from the time you first began working and the amount of Medicare and Social Security taxes you’ve paid since the start of your working career






The Financial Numbers You Should Know

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  1. Credit Score

Ah, credit score. Something you may not want to know – but most definitely should. Two of the most important credit scores are your FICO score and VantageScore, partly because they are most widely referred to. Your credit score is what lenders use to determine the risk of loaning you money. This includes credit card companies, auto dealers, mortgage bankers, and even some landlords and insurance companies.1

Consistently paying your bills when they are due, in full, and keeping your credit card balance(s) low are great ways to improve your credit score.

  1. Debt-to-Income Ratio

`               Your debt-to-income ratio is a simple ratio that measures how much of your money has to go towards making debt payments.2 This number can be easily calculated by adding up the payments you owe (monthly car payment, credit card minimum payment, housing costs, etc.) then dividing it by your monthly income. This number is important because it allows lenders to quantify your ability to manage your monthly payments and repay the money you have borrowed.3

  1. Monthly Expenses

Your monthly expenses are vital to know because not only can it help you achieve financial independence, but it can help you not go into debt – or even get out of debt. Understanding your spending rates can help you to determine how much money you should be stashing away in an emergency fund. To be completely safe, some people suggest that you should have three to five months worth of living expenses saved up in the unfortunate event that a crisis occurs. It’s always better to be safe than sorry!

  1. Savings Rate

Probably the most important step to achieving financial success is actually saving for it. Saving around 15% of your income (more or less) for a comfortable retirement is not the only thing you should be saving for. Consider your other big purchases such as a home down payment, paying for a car in cash, and other financial goals and milestones.

  1. Net Worth

Your net worth represents the wealth that you have, and it’s fairly easy to determine and understand. For example, add up the value of your house, your car, your personal property and savings and subtract your debts, such as mortgage loans, etc. This will either be a positive or negative number depending on your assets and debts.4

The more assets and less liabilities you have, your net worth should be positive. If you have debts and few assets, your net worth will most likely be negative. For most people who are just starting out – i.e. recent college grads – with car loans and student loans, don’t stress too much. In that case, it’s normal to have a negative net worth. It just means you have to work a little bit harder to get to a positive net worth. Tracking your saving and spending rates can really help you get out of the negative net worth red zone.







A Private Island Could Cost Less Than Your Current Home

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A Private Island Could Cost Less Than Your Current Home

Average cost of a home in Oahu: $810,000

Average cost of a condo in Manhattan: $1.1 million

Average cost of a home in San Francisco: $1.61 million

Cost of buying your own private island: could be less than $99,000

Wouldn’t it be nice to just sit back and relax on a beach without all the loud tourists? Whether you’re looking for a new elite vacation spot or going off the grid, buying an island isn’t only for the uber wealthy. In fact, there are hundreds of islands on the market for sale, and some are even listed well below six figures. Living or vacationing on an island that’s exclusively your own may not be as far from reality as you might think.

Like shopping for shoes online, you can literally go on the internet and shop for your own island. Sites such as Private Islands Inc and Vladi Private Islands make this possible. Island locations are available in a variety of terrain, so there’s something for both the outdoorsy adventurer and the tropical beachgoer. Ranging from the woodland forests of Nova Scotia to the palm-lined shores of Fiji, private islands are attainable all over the world, including in the Bahamas, Canada, Ireland, French Polynesia and Belize.

Some islands are already equipped with all the necessary means of living, including housing, plumbing and electricity. There are some that even have an onsite staff! Other available islands give you the opportunity to build your dream home. This allows the owner to channel their inner architect and interior designer, customizing their island to perfectly suit their own personal style and needs.

Moving to a remote location isn’t for everyone, but buying an island could be a worthy investment opportunity. For example, British entrepreneur and founder of the Virgin Group, Richard Branson, purchased an island in the late 1970’s for $180,000. After building a resort on the island, its value has increased to approximately $60 million. That is a massive increase of 33,233 percent, according to Business Insider.

Nevertheless, no one says you have to build a resort or share your island with anyone if you don’t want to. Put your toes in the sand and let the sound of the waves be your ultimate escape from reality.

“Median Price of Single-Family Home On Oahu Hits Record High.” (accessed March 19, 2019).
“Manhattan Real Estate Is Now In a Year-Long Correction.” (accessed March 19, 2019).
“San Francisco’s Median House Price Climbs To $1.61 Million.” (accessed March 19, 2019).
“Find Your Private Island.” (accessed March 19, 2019).
“How To Buy Your Own Island.” (accessed March 19, 2019).
“Want To Buy A Private Island? Here’s How.” (accessed March 19, 2019).
“How To Buy A Private Island.” (accessed March 19, 2019).
“8 Private Islands You Can Rent on Airbnb Right Now.” (accessed March 19, 2019).
“Buying Necker Island For $180,000 Was The Best Deal Richard Branson Ever Made.” (accessed March 19, 2019).