There are certain expenses that are likely to eat up more of your retirement income than others. Transportation, for example, could end up being a minimal expense if you're not commuting to a job and live in a walkable area. Housing, on the other hand, might be a huge cost even if your home is paid off after accounting for property taxes, insurance, maintenance, and repairs.
Similarly, healthcare is likely to be a huge expense during your senior years -- once you might need a lot of retirement savings to pay for. So it's important to do what you can to reduce your costs when possible.
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It's for this reason that Medicare's fall open enrollment period is so crucial. Each year, between Oct. 15 and Dec. 7, Medicare enrollees have an opportunity to choose a different plan for the new year. That could mean swapping one Part D drug plan for a new one, switching Medicare Advantage plans, or moving off of Medicare Advantage and onto original Medicare.
Now that open enrollment is underway, it's essential to make the most of that opportunity. And that means avoiding these potentially costly mistakes.
1. Not reviewing your current plan's notice of change
A big motivating factor in changing your Medicare coverage is to save money. But to make a smart choice, you first need to see how your current plan is changing. That way, you can compare what your plan will look like in the new year to other plans.
But don't just look out for increased costs under your current plan. Also be mindful of changes to your provider network if you're enrolled in Medicare Advantage. If losing access to your favorite doctors is a big deal (which it should be), then that alone is reason enough to shop for a new plan.
2. Focusing only on premiums when looking at a new plan
When comparing your plan options during open enrollment, it's natural to focus on premium costs. And you may find that there are $0 premium plans available to you.
But choosing a new plan on the basis of it having the lowest premium could be a mistake if you're not looking at the other costs involved. It may be that one particular plan has a low premium but higher deductibles, coinsurance, and copays. So be sure to look at the big picture, especially if money is tight in retirement.
3. Assuming you and your spouse should have the same coverage
It's generally a good idea for you and your spouse to make financial decisions together. In the context of retirement, that may mean coordinating on when to sign up for Social Security and setting a joint budget to follow.
It's definitely a good idea to shop with your spouse for a new Medicare plan during open enrollment. But you shouldn't assume that you and your spouse need to be on the same plan.
Being on the same plan may be easier from an administrative standpoint, since you'll be familiar with that plan's rules and coverage. But let's say you and your spouse take different medications.
It may be that there's a Part D plan that puts your drugs in a lower, less expensive tier, but puts your spouse's drugs in a higher tier with heftier out-of-pocket costs. In that case, that plan might make sense for you, but for your spouse, not so much.
4. Waiting until the last minute to start doing your research
Choosing a new Medicare plan isn't something you should do on a whim. You should compare the plans that are available to you, look at their costs and benefits, and do plenty of research before electing your coverage for 2026.
These are things that are apt to take time, though. So rather than rush through the process, start looking at plan choices sometime in October. If you wait until late November or, worse yet, early December to start looking at Medicare plans, you may end up making a poor choice due to running out of time.
The choices you make during open enrollment could lead to better healthcare coverage in the new year -- and a plan that costs you less money overall. Avoiding these mistakes could help you steer clear of a bad decision that hurts you.
