Most people know Medicare eligibility commonly begins around age 65, but affluent individuals often have additional financial considerations. If you're still working, contributing to an HSA, realizing large capital gains, exercising equity compensation, selling a business, or considering Roth conversions, the timing of Medicare can intersect with broader financial planning. Besides learning about how to handle signing up for Medicare, it’s crucial to consider Medicare as part of retirement, investment, wealth management, and tax planning decisions.
When Can You Apply for Medicare?
In general, enrollment for Medicare happens during your initial enrollment period, which is three months before the month you turn 65 and ends three months after your birthday month. Most people don’t pay a premium for Medicare Part A because you contributed to Medicare taxes while working, but if you don’t enroll during that timeframe, you may face a late enrollment penalty. That penalty is added to your monthly premium and isn’t just a one-time fee — it could increase the longer you wait.
Medicare Part A covers inpatient care in hospitals, skilled nursing facility care, hospice care, and home health care, while Part B helps cover doctor and healthcare provider services, outpatient care, home health care, durable medical equipment, and many preventive services. Part D helps cover the cost of prescription drugs.
Medigap is Medicare supplemental insurance that you can buy from a private company that helps pay your share of the costs in the original Medicare (Parts A and B). Medicare Advantage plans cover the “medically necessary services” that Original Medicare does, but they often cover other services such as vision, hearing, and dental.
Special Enrollment Periods
Turning 65 doesn't necessarily mean everyone should make the same enrollment decisions. If you or your spouse are still working at 65, qualifying job-based group health coverage may allow you to delay Part B without a late-enrollment penalty. Once the employment or that coverage ends, Medicare generally provides an eight-month Special Enrollment Period to enroll in Part B.
General and Open Enrollment
You should be aware of Medicare enrollment dates when planning. Your initial enrollment differs from Medicare Open Enrollment, which runs Oct. 15 through Dec. 7 each year and is primarily a chance for people already in Medicare to make changes to their coverage. During this period, you can switch, sign up for, or drop a Medicare Advantage plan (Part C) or prescription plan (Part D). Any changes you make go into effect on Jan. 1.
Signing Up for Medicare When You're Still Working After 65
If you plan to still work after 65, it’s necessary to coordinate Medicare with your employer coverage. Make sure you understand your employer coverage before delaying Medicare coverage because having employer health insurance doesn’t automatically prevent you from facing penalties. Evaluate whether your employer coverage is considered adequate for delaying enrollment. The Medicare website says you should ask your employer if you need to sign up for Part A and Part B when you turn 65.If you don’t, your employer’s insurance might not cover the costs for any services you need.
Wealthy executives and business owners working beyond traditional retirement age shouldn't simply assume they can delay every part of Medicare. If you have health insurance that isn’t from an employer, such as from the marketplace or another private company, ask your health insurance plan provider whether you should enroll in Medicare when you turn 65 and how Medicare will coordinate with your existing coverage.
HSA contributions are also a factor in planning for those who work past 65. If you are covered by an HSA-eligible high-deductible plan but you don’t yet have Medicare, you may still be eligible to contribute to the HSA. Usually, you become ineligible for HSA contributions when you sign up for Medicare, per the IRS.
Remember that some delays may result in enrollment penalties. Medicare notes that for Part B late enrollment, you’ll generally pay an additional 10% for each year you could have had Part B but didn’t enroll, with some exceptions. You may also pay a higher premium based on your income.
Why High-Income Earners Need to Consider IRMAA
High earners often find that they must pay higher premiums because of their income. In 2026, the standard Part B premium is $202.90 per month, according to Medicare.gov. If you exceed certain thresholds, you pay a surcharge on Part B and D, called Income-Related Monthly Adjustment Amount (IRMAA). This additional charge can bring your payment as high as $689.90 for Part B if you make $500,000 or more for singles and $750,000 or more for married couples filing jointly, based on IRMAA brackets.
Because the premium is based on your income from two years earlier, your decisions now impact your future premiums, including selling a home or taking retirement distributions — which can trigger the surcharge.
For 2026, income-related Part B and Part D premium adjustments are generally based on the income reported on your 2024 federal tax return. That two-year lookback means a higher-income year can affect your Medicare costs even if your current income is lower.
AGI vs. MAGI: What Income Counts?
Adjusted gross income (AGI) starts with your total income — including wages, business income, taxable retirement income, dividends, taxable interest, and realized capital gains — and subtracts certain adjustments to income. It is calculated before your standard or itemized deduction. For Medicare IRMAA purposes, modified adjusted gross income (MAGI) is your AGI plus tax-exempt interest. Other tax provisions may use different definitions of MAGI, so it’s important to use the Medicare-specific calculation.
Think of AGI as the starting point: Income that increases AGI generally carries through to Medicare MAGI. Dividends, taxable interest, and realized capital gains can therefore affect your future premiums. Tax-exempt interest is added back even though it is not included in AGI. The taxable portion of a Roth conversion also increases AGI and flows through to Medicare MAGI. As a result, a one-time income increase can move you into a higher IRMAA bracket, generally two years later.
A Higher IRMAA Bracket Isn’t Permanent
One higher-income year doesn’t lock you into a higher Medicare IRMAA bracket forever. Your income-related surcharges are recalculated each year, generally using your MAGI from two years earlier and the applicable thresholds for that premium year. If your income falls, your surcharge may decrease or disappear when that lower-income year is used in the calculation.
You may also be able to request a lower surcharge sooner if a qualifying life-changing event, such as retirement or reduced work hours, lowers your household income. You can submit Form SSA-44 to the Social Security Administration with evidence of the event and updated income information. Keep in mind that a reduction isn’t automatic, and Social Security reviews your request to determine whether you qualify.
Aligning Investment and Tax Decisions with Medicare Premiums
The possibility of paying a surcharge makes it vital for wealthy retirees to align wealth and Medicare planning. Before making investment changes, consider how each of the following strategies impacts Medicare premiums.
Roth Conversions
A Roth conversion can support long-term tax, retirement, and estate-planning goals, but the converted amount is generally treated as ordinary income in the year of the transfer. Because Medicare uses modified adjusted gross income from two years earlier to determine income-related monthly adjustment amount (IRMAA) surcharges, a large conversion could increase future Part B and Part D premiums.
Consider both the timing and size of a conversion alongside your projected income, tax bracket, and Medicare costs. A partial conversion or conversions that are spread over multiple years may help manage taxable income while still advancing your broader financial goals.
Capital Gains and Investment Income
If you realize significant gains as part of portfolio rebalancing or selling concentrated positions, this can raise your (MAGI and thus increase your Medicare IRMAA bracket two years later. Consider the timing of your investment changes or use strategies to minimize your taxable income.
Business Sales and Other Major Income Events
If you’re a business owner approaching retirement and plan to sell, or you are considering other significant liquidity events, include potential Medicare surcharges in your planning. Taxable income from the transaction can increase your MAGI and may raise your Part B and Part D premiums two years later, even if your ongoing retirement income is much lower.
Work with your tax team and wealth advisor before the transaction to understand how the expected income fits with other gains, retirement distributions, and planned Roth conversions. A higher Medicare premium may be a manageable trade-off within a successful exit strategy, but it's not a reason on its own to delay an otherwise sound sale.
Required Distributions and Retirement Income
Rather than looking at Medicare decisions independently, consider it part of your overall retirement-income plan. Look at your anticipated distributions and overall retirement income when planning Medicare. A move that might result in a higher premium may still make sense for other reasons. Consider the tax, investment, and Medicare implications together.
Medicare Enrollment Considerations for High-Net-Worth Families
Before signing up for Medicare, talk to your advisor about the following questions to find the right timing and strategy for you.
- When does my Initial Enrollment Period begin and end?
- Will I or my spouse continue working after age 65?
- What employer health coverage will remain available to me?
- Am I contributing to an HSA?
- What will my projected MAGI look like?
- Do Roth conversions makes sense for me and when should they be planned for best results?
- Am I expecting significant capital gains or a business liquidity event?
- How does Medicare fit into my retirement cash-flow needs?
- How can I coordinate upcoming tax decisions with Medicare planning?
- Is my Medicare planning aligned with my overall wealth and retirement goals?
Make Medicare Part of your Broader Wealth Strategy
Enrollment for Medicare is one piece of a much larger retirement picture. For high-net-worth individuals, enrollment decisions can intersect with taxes, investments, retirement income, and estate planning. Having your tax team and wealth advisor work together helps connect those decisions. Together, they can help you plan for required minimum distributions (RMDs), evaluate the timing and size of Roth conversions, and coordinate charitable giving with your retirement-income needs and potential Medicare costs.
For example, eligible individuals may be able to use qualified charitable distributions to satisfy all or part of an RMD without including that qualifying distribution in income. Talk with an M&S Wealth Management advisor about how Medicare fits into your retirement and tax strategy.
This content is for general informational purposes only and does not constitute tax, legal, or professional advice. Readers should consult their tax advisor regarding their specific situation before making any tax-related decisions.