We all want to cut our expenses when we retire to help us have a comfortable standard of living on our more limited income. Generally, the last thing we want is to add another new expense.

And many people intentionally wait to retire after they turn 65, so they will have Medicare to cover their health expenses. But the free part of Medicare alone may not cover everything you’ll want and need as you age during your retirement.

For example, if you want prescription drug coverage, you’ll also want to purchase a Medicare Part D plan. And that’s still true even if you buy a Medigap policy, since any Medigap policies sold since 2006 cannot include prescription drug coverage.

Medigap (also known as Medicare Supplemental insurance) is intended to supplement your Medicare. It should help you to pay some of the expenses not covered by Original Medicare, such as copayments, coinsurance, deductibles, and medical care in foreign countries (some plans cover this, others do not).

It only covers one person, so if you and your spouse both want Medigap coverage, you’ll need separate policies. And the premium you’ll pay for your Medigap policy is in addition to the premium you pay to Medicare for your Medicare Part B – it’s an additional expense, not a replacement. And it’s an expense you’ll be paying to a private insurance provider – not to Medicare.

To qualify, you must already have Medicare Part A and Part B. Part A (hospital insurance) is the part that is free for some people. Part B (medical insurance) helps with some of the doctor expenses you’ll incur for ongoing healthcare and for on-demand visits when you are ill. The standard Part B premium in 2018 is $134 per month but it may be higher or lower depending upon your income. And it has an annual deductible, after which you’ll still need to pay 20 percent of doctor visit costs.

It’s important not to confuse a Medigap policy with a Medicare Advantage Plan (Part C). They’re not the same thing.

If you already have a Medicare Advantage Plan, be sure you are able to leave it before signing up to begin your new Medigap policy. It is illegal for anyone to sell you a Medigap policy unless you are switching back to Original Medicare.

A Medigap policy is just one of the expenses you may need to contemplate when deciding when to retire and how much you’ll need for ongoing expenses thereafter. At Texas Financial and Retirement we work to develop a retirement plan customized to each individual family’s needs. We help you to consider all of the expenses you may have during your retirement, so you can maximize the benefits of your retirement income and “get retirement right!”

Contact James Holloway, Sr. and the team at Texas Financial and Retirement by emailing bestclients@texasfinancialandretirement.com or calling (903) 534-5477. You can apply for a free initial visit where we can learn enough about your situation to determine what we can do to help you. Follow us on Facebook for more general information.