4 Major Healthcare Mistakes Too Many Retirees Risk Making

Once you retire, it's important to manage your money carefully. While you may have a nice amount of savings and a decent Social Security benefit coming your way, if you're done working for a living, it's important to do what you can to stretch your income as far as possible.

You may find that of all of your retirement expenses, healthcare is the hardest one to predict. That's because your healthcare costs will hinge on a variety of factors -- the extent to which you take care of yourself, the issues that inevitably crop up, and the decisions you make with regard to your Medicare coverage.

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Mismanaging your healthcare costs could lead to a world of financial stress in retirement. So it's important to avoid these major mistakes retirees risk making.

1. Not signing up for Medicare on time

Medicare Part B, which covers outpatient care, may be a huge expense for you in retirement. But if you don't sign up for Medicare on time, you could end up paying more for Part B -- for life.

Your initial Medicare enrollment window starts three months before the month you turn 65, and ends three months after that month. If you miss that initial window, you'll have an opportunity to sign up later. But by then, it may be too late to avoid Part B surcharges that eat up even more of your Social Security benefits. That's why enrolling on time is generally your best bet.

2. Not participating in Medicare open enrollment each year

Each fall, Medicare runs an open enrollment period, from Oct. 15 through Dec. 7. During this time, you can switch your Part D drug plan or Medicare Advantage plan.

If you're reasonably happy with your coverage, you may be inclined to sit out open enrollment. But if you don't research plan choices, you won't know if there's a better option for you. That could lead to you paying more for healthcare for no good reason.

3. Underestimating out-of-pocket costs

You might assume that once you retire, Medicare will cover all of your health-related needs. In reality, there are many services original Medicare will not cover, including:

• Dental cleanings
• Eye exams and eyeglasses
• Hearing aids

Plus, even when Medicare does cover your care, there are often out-of-pocket costs like copays, coinsurance, and deductibles. It's important to budget carefully for all of these expenses so your budget isn't thrown off.

4. Not buying Medigap coverage right away

Because there are numerous out-of-pocket expenses you might incur as a Medicare enrollee, it's important to have a means of protecting yourself from some of those larger bills. That's where Medigap comes in.

Medigap is supplemental insurance. And its purpose, as the name implies, is to fill in some of the gaps left by Medicare.

You shouldn't expect Medigap to cover services Medicare won't. But Medigap policies commonly pick up the tab for coinsurance and deductibles under Medicare that can really add up.

Your initial window to sign up for Medigap coverage lasts six months, and it starts once you turn 65 and become enrolled in Medicare Part B. If you wait beyond that window to buy a Medigap plan, you risk being denied coverage or having to pay more for it. The nice thing about signing up during that initial window is that you can't be denied a plan due to preexisting health conditions.

There's no getting around the expense of healthcare in retirement. The key, therefore, is to be strategic with your Medicare choices and read up on your costs so you know what to expect. With proper planning, you can set yourself up to better manage your healthcare needs and expenses.

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