Worried about healthcare costs in retirement? These smart moves by Medicare could lower your expenses

Did you know that a 65-year-old can expect to spend $157,500 on healthcare costs in retirement? This is the latest estimate available from Fidelity. And that doesn’t even include long-term care.

There are steps you can take to make healthcare less of a burden in retirement. These include topping up your IRA or 401(k) or contributing to a health savings account and setting aside as much of that money as possible for your senior years.

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But making smart Medicare decisions could also lead to huge savings for you. Here are some smart moves that could make a world of difference.

1. Sign up when you should

Enrolling in Medicare on time accomplishes several key goals. First, it helps ensure you have medical coverage to begin with, saving you the cost of covering medical expenses entirely on your own. Second, it helps you avoid an additional late enrollment fee that makes both Part B and Part D more expensive over the course of your life.

Enrolling in Medicare on time means enrolling in the seven-month period that begins three months before the month you turn 65 and ends three months after that month. If you miss this initial window, you generally have to wait until the general Medicare enrollment period, which runs from January 1 to March 31 each year. But having to wait to sign up could mean missing out on health coverage when you need it.

2. Knowing when Medicare Advantage makes sense

Once you turn 65 and are eligible for Medicare, you can choose between Original Medicare (Parts A and B plus a Part D drug plan) and Medicare Advantage. Medicare Advantage works similarly to private insurance. You are generally limited to a specific network of providers and usually require pre-authorization for various services and procedures.

But you should know that Medicare Advantage plans usually offer additional benefits on top of what Medicare originally covers. These include dental care, eye exams and hearing aids.

In some cases, the extended coverage you get from Medicare Advantage could lead to lower health care costs. So it’s worth exploring your options and seeing if an Advantage plan is right for you. This won’t be the case for everyone, but it’s worth doing your research.

3. Taking advantage of open enrollment

Medicare open enrollment takes place between October 15 and December 7 each year. During this time, existing enrollees can make changes to their coverage. This includes changing Part D drug plans, changing Advantage plans, switching from Original Medicare to Medicare Advantage, or dropping Advantage and returning to Original Medicare.

Some seniors choose not to open enroll if there is no glaring problem with their existing coverage. But researching your plan choices each fall could lead to additional savings.

Part D plans, for example, may change their formularies every year, resulting in different out-of-pocket costs for different drugs. So, in some situations, changing Part D plans could mean you face less expensive co-pays.

It’s natural to worry about healthcare bills in retirement, especially given Fidelity’s daunting estimate. But if you manage your Medicare wisely, you may find that healthcare isn’t as worrisome an expense as you might expect.