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Retired Military Finances 101: Don't Lose Your TRICARE Thumbnail

Retired Military Finances 101: Don't Lose Your TRICARE

Retirement Funding Tricare Insurance

TRICARE provides robust health insurance coverage that many value highly. However, it's crucial to stay informed to avoid losing these benefits. Most individuals are covered by Active Duty/Retiree TRICARE until they turn 65, after which they transition to TRICARE For Life (TFL), regardless of preference.

How Does TRICARE for Life Operate?

The issue arises with how TFL operates. Upon becoming eligible for MEDICARE, Retiree TRICARE ceases, and enrollment in MEDICARE Parts A & B is required to receive TFL. Here's where confusion can occur:

  1. Working past 65: Despite having qualifying insurance through work, signing up for MEDICARE is necessary to maintain TFL. Delaying enrollment thinking there's no penalty is incorrect.
  2. MEDICARE eligibility age: It's separate from Social Security's Full Retirement Age (FRA), typically 66 or 67. Failing to enroll in MEDICARE at 65 means losing both MEDICARE and TFL coverage.
  3. Social Security Disability: Qualifying for Social Security Disability Benefits means MEDICARE eligibility 25 months later. Enrolling in MEDICARE Parts A & B upon eligibility is mandatory to retain TRICARE coverage.
  4. Moving overseas: Although MEDICARE generally excludes coverage overseas (except emergencies), canceling it forfeits TRICARE coverage. Even abroad, MEDICARE Parts A & B must be maintained.

What Will I Pay for MEDICARE?

MEDICARE Part A is automatic without premiums (apart from past contributions), whereas Part B requires payment. Premiums vary based on Adjusted Gross Income (AGI), as of this writing MEDICARE Part B premiums are as follows per person (Part D is not recommended for military retirees):

  • AGI < $206,000 / $103,000 (Married/Single): $174.70/month
  • AGI $206,001 - $258,000 / $103,001 - $129,000 (Married/Single): $244.60/month
  • AGI $258,001 - $322,000 / $129,001 - $161,000 (Married/Single): $349.40/month
  • AGI $322,001 - $386,000/ $161,001 - $193,000 (Married/Single): $454.20/month
  • AGI > $386,001 - $749,999 / 193,001 - $499,999(Married/Single): $559/month
  • AGI > $749,999/$499,999 (Married/Single): $594/month

High AGI from employment or Required Minimum Distributions (RMDs) may elevate premiums. Strategies like withdrawals from retirement accounts or Roth conversions between ages 59 1/2 to 65 can mitigate this.

Military Finances are Different

Your civilian counterparts don't have TFL. In fact, if you tell them about it, you might sense a bit of jealousy. That's not the only way your finances are different. There are many benefits that are available to you that aren't available to civilians and the tax code treats you differently too. That's why we think you should work with a financial advisor or planner that deals with Active and Retired Senior Military Officers each and every day. If you'd like to find out how we work with people like you, use the button below to schedule a free initial consultation.

If you found this article useful, you might like the following blog posts:

Retired Military Finances 101: Tricare, Medicare and Employer Provided Health Insurance


Military Finances 101: A Second to Die Life Insurance Primer


Military Finances 101: 6 Common Insurance Mistakes to Avoid


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