🏖️ Retirement Changes Everything
When you retire, some insurance becomes more important (Medicare supplements, long-term care) while other coverage may no longer be necessary (life insurance, disability). Here's how to adjust.
Health Insurance: Medicare Basics
At 65, you're eligible for Medicare. But Original Medicare (Parts A & B) doesn't cover everything:
✓ Medicare Covers
- • Hospital stays (Part A)
- • Doctor visits (Part B)
- • Lab tests, surgeries
- • Some home health care
✗ Medicare Doesn't Cover
- • Prescription drugs (need Part D)
- • Dental, vision, hearing
- • Long-term care / nursing homes
- • Deductibles & copays
Your Options to Fill Gaps:
- Medigap (Supplement): Covers deductibles, copays, coinsurance. Works with Original Medicare.
- Medicare Advantage (Part C): Replaces Original Medicare. Often includes drugs, dental, vision. HMO/PPO style.
- Part D: Prescription drug coverage. Required if staying with Original Medicare.
Life Insurance: Do You Still Need It?
✓ Keep Life Insurance If:
- • Spouse depends on your pension/SS
- • You have a taxable estate (over $13M)
- • You want to leave an inheritance
- • You have outstanding debts
- • You're still supporting dependents
⚠️ May Not Need If:
- • All debts paid off
- • Spouse has own income/assets
- • Kids are independent adults
- • Savings cover final expenses
- • No estate tax concerns
Option: If you have whole life with cash value, consider a 1035 exchange to an annuity for retirement income instead of canceling.
Long-Term Care Insurance
70% of people over 65 will need long-term care. Medicare does NOT cover nursing homes or extended home care. This is the biggest gap in retiree coverage.
Long-Term Care Costs:
- • Nursing home: $8,000-$10,000/month
- • Assisted living: $4,500-$6,000/month
- • Home health aide: $25-$30/hour
LTC Insurance Options:
- • Traditional LTC (premiums can increase)
- • Hybrid life/LTC policies
- • Self-insure (need $300K-$500K+)
Best time to buy: Ages 55-60. Earlier = cheaper premiums. After 70 = difficult to qualify.
Auto & Home Insurance in Retirement
🚗 Auto Insurance
Rates often increase after 65-70 as accident risk rises. Combat this with defensive driving courses (5-10% discount), low mileage discounts, and bundling.
🏠 Home Insurance
Reevaluate coverage—you may be over-insured if kids have moved out. Consider higher deductible if you have savings. Update for home improvements.
Retiree Insurance Checklist
- Enroll in Medicare during initial enrollment period (3 months before/after turning 65)
- Choose Medigap OR Medicare Advantage (not both)
- Enroll in Part D (drug coverage) to avoid late penalties
- Evaluate if life insurance is still needed
- Consider long-term care insurance or hybrid policy
- Take defensive driving course for auto discount
The Bottom Line
Retirement shifts insurance priorities. Medicare + supplement or Advantage is your foundation. Long-term care is the big gap most people ignore. Life insurance may no longer be necessary if dependents are grown and debts are paid. Re-evaluate everything—your needs at 65 are different than at 45.