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Think about the day you intend to retire. Will you be at least age 65? If so, then medical coverage isn't as big a problem for you as it will be for those who retire at a younger age. That's because at age 65 you will be eligible for Medicare coverage, a form of medical insurance funded partially by the government and partially by you.

Medicare is the medical insurance program for retirees with which most people are familiar. It has two parts, Part A and Part B. (They cleverly named it in this order because A comes before B in the alphabet.) Part A covers hospitalization and Part B covers doctor visits and various other medical services. For almost all Medicare recipients, Part A is free. That's because you paid for it with part of your FICA taxes during your working career. Part B, though, has a monthly premium that changes each year. This year the Part B monthly premium is $45.50 per person.

For a comprehensive description of Medicare, I encourage those who are or will soon be eligible for this program to get and read the booklet Medicare Basics, published by the Health Care Financing Administration (we also provide a link to it on the Resources list). With Medicare, your basic medical needs are largely met, although you will still need private supplemental insurance to help pay for items not covered by Medicare. The American Association of Retired Persons (AARP) website provides some guidance. We link to a series of helpful articles at the end of this lesson.