By Margo Steinlage Kreider
Retirement is exciting but when Medicare is involved, timing matters.
If you’re planning to retire in 2026, one of the most important pieces of your transition is understanding when and how to enroll in Medicare. Missing your enrollment window can lead to lifelong penalties, gaps in coverage, or unnecessary stress.
Let’s walk through what you need to know based on your retirement timing.
Retiring at 65 in 2026
If you’re turning 65 and retiring in 2026, you’ll enroll in Medicare during your Initial Enrollment Period (IEP).
Your IEP is a 7-month window:
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3 months before your 65th birthday month
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Your birthday month
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3 months after
If you apply in the three months before your birthday month, your Medicare coverage will start on the first day of your birthday month.
If you wait until the months after your birthday month to enroll, your coverage will begin the month after you apply.
Most employers keep your group coverage active through the end of the month you retire but always confirm this with HR so you can coordinate your Medicare start date correctly.
Retiring Before 65
If you retire before 65 and lose employer coverage, Medicare is not yet an option.
In that case, you’ll likely need coverage through:
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An ACA marketplace plan
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COBRA from your former employer
If you enroll in an ACA plan, you’ll keep that coverage until you turn 65. Then you’ll switch to Medicare during your Initial Enrollment Period.
COBRA works the same way — it does not replace Medicare. You must still enroll in Medicare when you turn 65 to avoid penalties and gaps.
You’ll want your ACA or COBRA plan to end the day before Medicare begins so there’s no coverage gap.
Retiring After 65 in 2026
If you’re already past 65 and still working for a large employer, your enrollment process looks different.
Once you retire and lose employer coverage, you qualify for a Special Enrollment Period (SEP).
While you have have 8 months to enroll in Part B to avoid any Medicare Part B Late Enrollment Penalties, you’ll need to enroll in Medicare Part B asap to avoid gaps in your health insurance. In most instances, Cobra will refuse to pay as the primary payor when you become Medicare eligible. So if you plan to “work the system” and delay Medicare B for the 8 month duration, you may be able to avoid the late enrollment penalties but could face sticker shock when you find out that your Cobra benefit refuses to pay on claims made and points the finger to Medicare as the primary payor responsibility.
Most people prefer their Medicare to begin immediately after employer coverage ends to avoid these gaps in their health benefit. We typically recommend applying about 2-3 months before your retirement date to allow processing time.
When enrolling after 65 due to loss of employer coverage, you must submit:
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CMS Form 40B
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CMS Form L564 (completed by your employer)
These forms are submitted to the Social Security Administration to activate your Medicare benefits without penalties and gaps.
Small Employer vs. Large Employer Rules
If you work for a small employer (generally fewer than 20 employees), Medicare becomes primary at 65.
That means you should enroll in Part A and Part B during your Initial Enrollment Period — even if you’re still working — to avoid coverage issues or penalties.
If you work for a large employer, 20+ full or part time employees, you can delay Medicare while you have creditable coverage (meets the minimum requirements of Part D) and enroll in Medicare at a later date under your Special Enrollment Period.
What About Retiree Coverage or COBRA?
Many employers offer retiree plans or COBRA coverage.
In most cases:
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Medicare becomes primary
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Retiree or COBRA coverage becomes secondary
This means you’ll typically want Medicare Part A and Part B active as soon as you transition off active employee coverage.
Always confirm how your retiree benefits coordinate with Medicare before making a decision.
Choosing Coverage After Enrolling in Medicare
Original Medicare (Parts A and B) does not cover everything.
There are deductibles, copays, and a 20% coinsurance on outpatient services — with no cap on out-of-pocket spending.
That’s why most retirees choose additional coverage.
Option 1: Medicare Supplement (Medigap)
A Medicare Supplement plan works alongside Original Medicare and helps pay deductibles, copays, and coinsurance.
Once your Part B is active, you have a 6-month Medigap Open Enrollment window where you can enroll without answering health questions.
After that window closes, underwriting may apply in most states.
Option 2: Medicare Advantage
A Medicare Advantage plan is an alternative way to receive your Medicare benefits.
These plans often include:
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Hospital and medical coverage
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Prescription drug coverage
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Additional benefits like dental, vision, or hearing
Enrollment windows for Advantage plans follow your Initial Enrollment Period or Special Enrollment Period timing.
Don’t Forget Prescription Drug Coverage
If you enroll in Original Medicare, you’ll also need a standalone Part D drug plan.
If you’re retiring at 65, you enroll during your Initial Enrollment Period.
If you retire after 65 and lose employer drug coverage, you have 2 months to enroll in Part D to avoid a late enrollment penalty.
Part D penalties are lifelong, so this step is important.
Medicare Costs in 2026
Most people pay $0 for Part A if they’ve worked at least 40 quarters in the U.S.
However, everyone pays a Part B premium.
In 2026, the standard Part B premium is $202.90 per month.
Higher-income retirees may pay more due to IRMAA (Income-Related Monthly Adjustment Amount).
Medicare looks at your income from two years prior to determine your premium. If your income has dropped due to retirement, you may be able to appeal and reduce your premium.
In addition to Part B, you’ll want to budget for:
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A Medicare Supplement or Medicare Advantage premium
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A Part D premium (if applicable)
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Out-of-pocket costs
Final Thoughts
Retiring in 2026 means coordinating multiple moving parts:
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Enrollment windows
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Employer coverage end dates
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Part B premium costs
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Drug coverage timing
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Supplement vs. Advantage decisions
- IRMAA appeals
Getting the timing right can help you avoid penalties and ensure a smooth transition.
Retirement should be exciting — not stressful.
If you’re planning to retire in 2026, now is the time to review your Medicare strategy so everything lines up properly when you step into your next chapter.
