The Right Retirement Plan

The four parts of Medicare

Medicare has four parts. Part A covers hospitals (free for most). Part B covers doctors and outpatient ($185/mo base in 2026). Part C is Medicare Advantage, a private alternative to Original Medicare. Part D is prescription drugs. Original Medicare + Part D + Medigap is one path; Medicare Advantage is the other. They're different products with different tradeoffs.

Enrollment windows matter

Your Initial Enrollment Period is a 7-month window around your 65th birthday. Missing it can trigger lifelong late-enrollment penalties of 10%/year on Part B and 1%/month on Part D. If you're still working with employer coverage, you may be able to delay — but the rules vary by employer size, and getting it wrong is expensive.

IRMAA — the income surcharge

Higher-income retirees pay IRMAA surcharges on Part B and Part D premiums. In 2026, those surcharges begin at $212,000 MAGI for couples. The cliff is harsh — crossing by $1 can cost $1,000+/year per spouse. IRMAA uses income from 2 years prior, so Roth conversions at 63 trigger surcharges at 65.

Long-term care is not Medicare

The biggest healthcare misconception in retirement: Medicare does not cover long-term care. 70% of people turning 65 will need some form of LTC. The average nursing home costs $100,000+/year. Your options are LTC insurance (expensive but certain), hybrid policies (better fit for most), self-insuring (requires 7-figure assets), or Medicaid (after spending down).

Key takeaways

Medicare has 4 parts; enrollment windows have harsh penalties.
IRMAA surcharges kick in at $212K MAGI (MFJ, 2026) with a 2-year lookback.
Medicare does NOT cover long-term care — 70% of retirees will need it.
Original Medicare + Medigap vs Medicare Advantage is a real tradeoff with real consequences.

Medicare and Healthcare