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Turning 65 in the U.S. means finally being able to rely on Medicare covering most of your health expenses. But before you join the 62.7 million Americans enrolled in this program, it’s important to understand what’s covered and what’s not (1).
While trying to navigate the rules around Medicare can feel overwhelming, avoiding common mistakes can help protect your retirement fund.
And when you’re living on a fixed income, the last thing you want to do is throw money away because of a misunderstanding.
Here are three costly Medicare mistakes and how to avoid them.
Medicare and Medicare Advantage plans have a number of differences. Not understanding these means you could be overpaying for a plan that’s filled with features you don’t need.
Medicare plans are offered by the government and designed for those aged 65 or older or qualifying individuals with certain disabilities. Private health insurance companies offer Medicare Advantage plans for those 65 and older.
If you are on the cusp of retirement and are wondering about your healthcare expenses or your ability to meet your out-of-coverage needs, getting ancillary health insurance can ease your worry.
With U65 Health Insurance, Americans under the age of 65 can compare health insurance offers from leading insurance providers.
Simply enter some basic information about yourself and your finances, and U65 Health Insurance will compile and display offers from leading insurance providers like United Health, Anthem and Kaiser in less than five minutes.
Before signing up for any plan, ask to see the plan’s current formulary, which is a list of the medications a plan covers. And be sure to confirm if your doctor and providers are covered under a potential plan.
Not looking over whether your current doctor and preferred providers are covered under the plan you choose could end up costing you thousands of dollars in out-of-pocket costs.
Read More: Approaching retirement with no savings? Don’t panic, you’re not alone. Here are 6 easy ways you can catch up (and fast)
Taking care of yourself during old age can be difficult for many, especially if you have a disability or chronic illness.
According to the Administration for Community Living, Americans turning 65 today have roughly a 70% chance of needing long-term care services at some point during their golden years. However, Medicare typically doesn’t cover long-term care in a nursing home (2).
In 2026, the annual cost of a private room in a nursing home averages around $136,948, while the median cost of a semi-private room was $119,340, according to the American Council on Aging (3).
With costs skyrocketing, obtaining long-term care insurance can ease the burden on your finances, making sure you are able to afford long-term care should you need it.
You can also get term life insurance to ensure your loved ones are taken care of after your passing.
If you want to ensure your family isn’t hit with unexpected costs after your death, consider signing up for term life insurance from Ethos.
Rated “Excellent” on Trustpilot and with an A+ from the Better Business Bureau (BBB), Ethos offers simple and affordable coverage for a set period of time — typically between 10 and 30 years.
Ethos gives you the flexibility to select coverage amounts ranging from $2,000 to $100,000. Premiums start at just $9.80 a month and are guaranteed throughout the term.
Get coverage in just 10 minutes online or by phone today.
Navigating the complexities of Medicare and Social Security can be daunting, especially amid frequent changes. You could easily overlook important deadlines and end up with gaps in your coverage, higher out-of-pocket costs or even miss out on advantageous tax breaks.
But joining senior-focused organizations like AARP can help.
AARP members get access to guides that can help you make the most of Social Security, choose the right Medicare plan, and uncover other government benefits — potentially saving you thousands. Even better, AARP offers discounts on almost everything — from prescriptions and dental plans to travel, entertainment and insurance.
Sign up with AARP today and get 25% off your first year.
It’s also important to have an emergency fund available to meet any unexpected expenses. Having at least 12 months’ worth of expenses in your emergency fund can provide an adequate safety net in retirement.
Storing your emergency fund in a high-yield account also helps ensure your money remains accessible while keeping up with inflation.
You can earn up to 3.95% APY on your emergency fund with a Wealthfront Cash account with a base rate of 3.30% plus a boost of 0.65% for the first three months. That’s ten times the national deposit savings rate, according to the FDIC’s January report.
With no minimum balances or account fees, as well as 24/7 withdrawals and free domestic wire transfers, you’ll have peace of mind knowing you can always access your money.
Plus, Wealthfront Cash Account balances of up to $8 million are insured by the FDIC through program banks.
Looking for more options? Check out the Moneywise best high-yield savings accounts of 2026 that can earn you more than the national average.
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Centers for Medicare & Medicaid Services (1); Administration for Community Living (2); American Council on Aging (3); Joint Center for Housing Studies of Harvard University (4)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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