You are 65 and still working. Your spouse is 63. Here is the math on splitting up, and the tax return that decides it.

Part two of Healthcare in Retirement, and the same warning as yesterday. I am not an advisor. I am an engineer. What follows is me working the numbers on a legal pad until they made sense, and showing you the work. The advisors at American Retirement Advisors turn this into a decision for your actual family. I just draw the columns.

The situation

You turn 65 this year and you are still working. Your spouse is 63 and on your family plan at work. The premium comes out of your paycheck and it has been creeping up for years. Someone at the office says, you are 65 now, just go on Medicare, it is cheaper. Is it?

The honest answer is: it depends on three things most people never check. The size of your employer, the way your plan prices its tiers, and a tax return you filed a year and a half ago.

First, the rule that makes waiting safe

If your employer has 20 or more employees, the work plan pays first and Medicare pays second, and you can delay Part B for as long as you or your spouse keep working there, with no late penalty. When the job ends you get the same 8-month window we talked about yesterday. If the employer has fewer than 20 employees, Medicare pays first, which means you need Part B now, because the work plan will only pay as if you had it.

So for most people at a company of any real size, staying on the work plan past 65 is allowed and penalty-free. The question is only whether it is smart.

Column A: stay on the family plan

KFF's 2025 employer survey puts the average family plan at $26,993 a year, with the worker paying $6,850 of it. Call it $571 a month out of your check, and it covers both of you.

Column B: you go to Medicare, your spouse stays

Your side first. Part B is $202.90 a month in 2026. A Medicare Supplement Plan G in Maricopa County runs about $131 to $526 a month at 65. A drug plan can be as little as $0. So your column is roughly $335 to $730 a month, before we get to the surprise.

Now your spouse's side, and here is where you have to call HR, because I cannot do this part for you. Some plans price "employee plus spouse" close to family, so dropping yourself saves almost nothing. Some require the employee to be enrolled for a dependent to stay on at all, which means if you leave, your spouse leaves. Ask both questions before you touch anything.

The surprise: a tax return from two years ago

Medicare charges higher earners more for Part B and Part D. It is called the Income-Related Monthly Adjustment Amount, IRMAA for short, and it is set by your tax return from two years back. Your 2026 premium is based on your 2024 return. And in 2024 you were working full time.

The 2026 brackets for a couple filing jointly, straight from CMS:

• Up to $218,000: Part B is the standard $202.90.
• Over $218,000 to $274,000: $284.10, plus $14.50 added to your drug plan.
• Over $274,000 to $342,000: $405.80, plus $37.50.
• Over $342,000 to $410,000: $527.50, plus $60.40.
• Over $410,000 to $750,000: $649.20, plus $83.30.
• $750,000 and up: $689.90, plus $91.00.

So take a couple who earned $300,000 in 2024. The one who goes on Medicare pays $405.80 for Part B and $37.50 on top of the drug plan, which is $443.30 a month before a supplement is even in the picture. Add a mid-priced Plan G and that column is around $600 to $950 a month, for one person. Column A was $571 for two. For a high-earning household that is still working, the family plan very often wins, and it is creditable coverage, so no penalty is building while you wait.

Flip the incomes and the answer flips. A couple under $218,000 in 2024 pays the standard premium, and Medicare plus a supplement can beat a pricey family plan comfortably. That is why nobody should answer this question from a rule of thumb. It is arithmetic, and the inputs are yours.

One more thing on IRMAA, because it matters the year you retire. When your income drops, you do not have to wait two years for the surcharge to catch up. Social Security has a form for a life-changing event like stopping work, and it can reset the surcharge to your new income right away. We wrote about it here, and the longer IRMAA explainer is here. If you want the whole playbook, our IRMAA Trap guide walks through it.

The HSA rule nobody warns you about

If your work plan is a high-deductible plan with a Health Savings Account, read this twice. The IRS is blunt: "Beginning with the first month you are enrolled in Medicare, your contribution limit is zero." And here is the trap. If you sign up for Medicare after 65, Part A can start retroactively, up to six months back. Any HSA contributions made during those back-dated months are counted as excess, which means taxes and a penalty on money you thought was doing you a favor.

That is why Medicare's own advice is to stop contributing six months before you apply. The 2026 limits are $4,400 for self-only and $8,750 for family coverage, plus $1,000 if you are 55 or older, and they get prorated by month for the year you enroll. Plan the last contribution on a calendar, not on a hunch.

And the 63-year-old?

Medicare is individual. Your spouse does not get it early because you have it. Until 65, they need their own coverage, and when you finally retire the options are the ones that were expensive yesterday: COBRA on the work plan, which for a spouse can run up to 36 months in this situation, or a Marketplace plan with a special enrollment window when the job coverage ends. This is where COBRA earns its keep. Yesterday it was the expensive choice for you. For a 63-year-old spouse with no other bridge, it can be the only sensible one. Same law, opposite answer, because the person changed.

What a Certified Medicare Planner® does differently

They ask three questions before any advice: how many employees, what does HR charge for each tier, and what did your last two tax returns say. Then they build the columns above with your numbers instead of averages, including the IRMAA tier you are actually in. They put the HSA cutoff and the Part A start date on one calendar. They plan the spouse's bridge before the retirement date, not after. And the year you retire, they help file the income-change form so the surcharge drops with your income instead of two years later.

That is one meeting. It routinely moves the answer by several hundred dollars a month, in either direction. The advisors are at 602-281-3898.

Friday, October 2. Foothills Library, Glendale, 10:30 AM. Mustang Library, Scottsdale, 2:30 PM. No cost. Register at 123easymedicare.com/medicare-workshop or call (877) 220-1089.

Next in Healthcare in Retirement: you are a veteran with good VA care, so why would you ever look at a Medicare Advantage plan with a $0 premium? Three reasons, and one is a number Original Medicare simply does not have.

This event is presented by 123EasyMedicare, a brand of American Retirement Advisors, an independent, private organization. It is not sponsored by, endorsed by, or affiliated with Medicare, the Centers for Medicare & Medicaid Services, the Social Security Administration, or any government agency. The libraries are not sponsors of, and are not affiliated with, this event. Educational only; not tax, legal, or insurance advice.

Disclaimer: This article is for educational purposes only. It is not sponsored, endorsed, or otherwise representative of Medicare or the federal Medicare program. American Retirement Advisors is not a government agency. For official Medicare information, visit medicare.gov or call 1-800-MEDICARE (1-800-633-4227).