Healthcare can be a large expense at any age. But in retirement, it can eat up quite a lot of your income.

As people age, health issues tend to emerge. So it's important to do what you can to save for healthcare expenses ahead of time, whether by funding an HSA or boosting your IRA or 401(k) plan contributions.

But it's just as important to understand how Medicare works. Once you turn 65, you'll be eligible for coverage under Medicare, and that's something you'll want to make the most of.

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It's also essential that you have a solid grasp of your costs under Medicare before retirement rolls around. That way, you'll know to save for them in advance.

Unfortunately, though, there's a lot of misinformation out there when it comes to Medicare. And buying into these three specific misconceptions could really ruin your retirement.

1. Medicare is free

If you're working now and getting health insurance through your employer, you may be paying a portion of your premium costs via payroll deductions. But some employers cover employee premiums completely as part of their benefits package. And if yours does that, it's a really nice perk you should be thankful for.

Medicare doesn't work like that, though. There's no employer to share in the cost of your premiums, and those premiums certainly aren't free.

In fact, this year, the standard Medicare Part B premium is $164.90 a month. And on top of Part B, you'll need to pay for Part D, which is prescription drug coverage. The cost there will hinge on the plan you choose. But the point is that you should expect to pay some amount of money for your health coverage -- and that's before expenses like coinsurance and deductibles come into play.

2. All of your health-related needs will be covered under Medicare

Medicare covers a wide range of services. But if you need dental care, an eye exam, or hearing aids, guess what? Those are expenses you'll need to cover out of pocket, because Medicare won't pay for them (at least not original Medicare -- if you have Medicare Advantage, it's a different story).

Also, to be clear, while Medicare might pay for things like diagnostic testing and sick visits at the doctor, you'll generally share in those costs via some type of coinsurance. So don't assume that all you need to do is pay your monthly premiums and call it a day.

3. You don't have to enroll once you become eligible

Nobody is going to force you to sign up for Medicare during your initial enrollment window, which starts three months before the month you turn 65 and ends three months after that. But if you don't sign up for Medicare on time and you're not covered by a qualified group health plan at the time you delay your enrollment, Medicare could end up costing you a lot more money down the line.

We talked about how there's a monthly charge for Medicare Part B. If you delay your enrollment too long, you'll risk being charged a 10% surcharge on your Part B premiums for each year-long period you were able to sign up for Medicare but didn't.

Get the facts

There's lots of misinformation about Medicare out there, so in the course of your retirement planning, know this:

  • Medicare coverage is not free.
  • Medicare will not cover every service you need.
  • Delaying Medicare enrollment could have serious financial consequences.

Now that you're in the know, you can make plans to sign up for Medicare at the right time. And ideally, you'll be motived to boost your savings so you have money to spend on healthcare when you need to.