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What To Do When You Turn 65

What To Do When You Turn 65

| October 28, 2019

Every decade has its milestones, but the ones you face in your 60s have more financial consequences and require more preparation. After all, you want to enter retirement with confidence and excitement, and that doesn’t happen by chance. The problem is, retirement planning can get confusing, and if you aren’t paying attention, important deadlines can be easy to miss. Here’s our version of a cheat sheet to help you with some steps to take and decisions to be made when you celebrate your 65th birthday.

Get On The Medicare Train

Medicare eligibility begins at age 65. If you are already receiving Social Security, you will automatically receive Medicare too. But if not, you will need to manually apply for Medicare benefits. You can sign up as early as three months before your 65th birthday so that your coverage begins as soon as possible.

There are plenty of Medicare choices to make, such as what type of coverage to apply for, whether you want a prescription drug plan, and if you need supplemental insurance. Your premium costs will depend on your coverage choice and your income. Medicare can be complicated and overwhelming, so start researching now to make informed choices. 

On the other hand, you aren’t required to apply for Medicare. Depending on your situation, you may be better off postponing your Medicare enrollment, especially if you plan to continue working and your employer’s healthcare plan is cheaper than what your Medicare Part B premiums would be. If this is the case, you can still enroll in Part A. It’s free in most circumstances, covers hospital-related expenses, and can supplement your employer’s plan. 

Figure Out Social Security

If you have yet to tap into Social Security, be mindful of the fact that 65 is not quite full retirement age (FRA). If you were born between 1943 and 1954, your FRA is 66. Starting in 1955, two months a year is added again until the FRA becomes 67 for those born in 1960 or later. If you want to maximize your Social Security benefit, you’ll need to wait a bit longer before claiming Social Security. Regardless, turning 65 is a good time to get the details in place and paperwork ready to start collecting your benefits. If you are still working or don’t need the money to cover living expenses, you can delay receiving your benefits until age 70.

Keep in mind that the income you earn in the year before FRA and the year you reach FRA will impact your benefit amount. Any income you earn before the year in which you reach FRA reduces your Social Security benefit once it surpasses a specific limit. For 2019, the limit is $17,640. Once your earnings exceed that, your Social Security benefit will be reduced by $1 for every $2 you earn. The income restrictions change the year you reach FRA. That year there is a higher limit, which is $46,920 for 2019. Your Social Security benefit will be reduced by $1 for every $3 you earn once you pass that limit.

Creating a Social Security strategy will help you determine the best time to claim benefits and guide you in making decisions about how much to work in the years leading up to your full retirement age. 

Consider Long-Term Care Insurance

More than half of people turning 65 will need some form of long-term care during their lifetimes; that’s why it’s critical to have a plan to pay for these costs. (1) On average nationally, it costs $275 per day or $8,365 per month for a private room in a nursing home. (2) But the older you get, the higher your cost for a long-term care insurance policy will be and the greater the likelihood of your application being denied. Generally, the last age long-term care insurance is affordable is when you are in your mid-60s.

Cover Your Legal Bases

Although age 65 is far from the end of your life, as you get older and your health risks increase, it would be wise to use this milestone to get your affairs in order so your family is taken care of. Consider drafting a will, finding a power of attorney for your finances and health, and creating an advanced medical directive in case you cannot make decisions on your own. 

Create A Savings Withdrawal Plan

When you do start living off of your hard-earned savings, you need a plan in place to help insure your money lasts through your retirement. You don’t have to start taking required minimum distributions (RMDs) from your IRA or 401(k) until you are 70½, but you may want to withdraw some money now to lessen the tax impact later. The key is to sit down and map out multiple scenarios to reduce your tax bill, make your money last as long as possible, and enjoy your future retirement with less worry. 

We’re Here To Help

Retirement brings up a number of questions and decisions, from deciding where you’ll live to how much you can spend. While working with a financial advisor can be beneficial at any time in life, receiving objective advice and personalized guidance can be especially helpful as you get closer to your retirement date. 

At Setchfield Asset Management, our goal is to make it easy for you to understand what you need to do to achieve your retirement dreams. We want to help you navigate the path to retirement, no matter what questions come up along the way. Contact us for a complimentary introductory meeting to see if we’re the right fit by emailing me at or calling (303) 627-1099.

About Steve

Steve Setchfield is Chief Investment Strategist at Setchfield Asset Management, an independent financial advisory firm. With almost 30 years of experience, Steve serves his clients by keeping them out of financial trouble in volatile markets, using a low-key, rules-based approach to investing and helping them with every aspect of their financial lives. Steve studied finance at the Metropolitan State University of Denver and spent several years working at Shearson Lehman Brothers and Kemper Securities before founding his own independent firm so he could offer objective, personalized advice and strategies. Steve is a Colorado native and enjoys skiing and other outdoor activities. He spends his free time volunteering for Big Brothers/Big Sisters of Colorado and coaching wrestling in the Cherry Creek school system. In 2003, Steve was a living kidney donor for his uncle who suffered from polycystic kidney disease. To learn more about Steve, connect with him on LinkedIn.