Medicare & Retiree Health for California Educators

Turning 65 as a CalSTRS or CalPERS member is different: some of you never paid into Social Security, your district may owe you retiree health benefits, and your pension income can quietly raise your Medicare premiums. Here's the 2026 playbook.

The 2026 numbers

The CalSTRS trap: IRMAA is calculated from your modified adjusted gross income two years back. A large lump-sum, a rental sale, or a big Roth conversion in one year can push a married couple from $202.90 each to $400+ each per month in Medicare premiums two years later. This is exactly the kind of thing we time around — it's why withdrawal sequencing matters as much as investment returns.

What's different for CalSTRS & CalPERS members

• No Social Security? You still get Medicare. Most CalSTRS teachers didn't pay into Social Security — but if you paid Medicare tax for 10+ years (most hired after April 1986 did), you qualify for premium-free Part A at 65. If not, you may qualify through a spouse.
• CalPERS members: CalPERS requires enrolling in a CalPERS Medicare health plan when you turn 65 to keep your retiree coverage — your CalPERS plan then wraps around Medicare. Miss the window and you can lose the subsidy.
• District retiree health benefits vary wildly. Some districts pay retiree medical to 65, some to Medicare age, some for life. We read your collective-bargaining language as part of the plan — before you pick a retirement date.
• Enrollment windows are unforgiving: your Initial Enrollment Period is the 7 months around your 65th birthday. Late Part B enrollment costs a 10% premium penalty per year missed — permanently.

Medigap vs. Medicare Advantage — the honest comparison

One more thing no one tells you: Medicare does not cover long-term care — the largest unfunded risk in most retirements. That's a separate plan: see Long-Term Care and the 6 ADLs that trigger benefits.

How we plan around Medicare

• IRMAA-aware withdrawal sequencing — which account you draw from, in which year, decides your premium two years later.
• Roth conversion timing — we model conversions against the $109K/$218K cliffs so one good tax idea doesn't become a Medicare surcharge.
• Retirement-date coordination — aligning your district benefits, CalSTRS/CalPERS start, and the 7-month Medicare window.
• Appealing IRMAA — retirement itself is a qualifying "life-changing event"; form SSA-44 can reset your surcharge to your new, lower income. Most people never file it.

Educational only — not insurance, tax, or legal advice. 2026 figures (Part B $202.90, deductible $283, IRMAA thresholds $109,000/$218,000) per CMS as reported June 2026 and subject to change. We do not sell Medicare plans; we coordinate your retirement plan around them. Capital Wealth LG / LA Pension Planners.