For the millions turning 65 this year, here’s what to know about navigating

When Bill Saiff, 65, a management consultant in Washington, D.C., was nearing his milestone birthday in December, the anxiety over what he needed to do about signing up for Medicare was palpable.

“Medicare is so unnecessarily difficult,” he told Yahoo Finance. “My health insurance coverage is through my spouse’s employer, and it offers a much better medical plan for now, so staying on her plan is a better deal for me than Medicare, but the confusion over what to do was frustrating.”

Saiff’s scenario — including his confusion — is prevalent. And with 4.1 million Americans turning 65 this year — a record number — the decision is front and center in many households.

“The transition from employer-sponsored health insurance to Medicare is really complicated and actually can be kind of treacherous,” said Mark Miller, a retirement expert and author of “Retirement Reboot: Commonsense Financial Strategies for Getting Back on Track.” “Same if you’re transitioning from an Affordable Care Act plan to Medicare.”

“Medicare is my poster child for complexity in the retirement system,” Miller said. “Bar none, it’s the most complicated.”

Medicare enrollment basics

Medicare coverage begins for most Americans at 65 who are not actively covered by an employer-provided healthcare plan. The initial enrollment period is the three months before, the month of, and the three months after your 65th birthday.

Miss your sign-up and you start racking up late enrollment penalties and risk gaps in coverage.

The timing of your enrollment involves a host of factors, including whether you’re currently receiving Social Security benefits, whether you’re still working and are actively covered by an employer’s plan, or whether you have coverage under your spouse’s plan, as Saiff does, and whether that insurance is required to pay claims for people who are eligible for Medicare, but not enrolled.

“Medicare provides great insurance, but it’s not a ‘one-size-fits-all’ program,” Philip Moeller, a Medicare and Social Security expert and principal author of the “Get What’s Yours” book series, told Yahoo Finance.

There are exceptions to the mandatory sign-up period.

For example, if you’re still working at 65, you could opt to stay on your employer’s (or your spouse’s employer’s) health insurance past age 65, as Saiff did. But you’ll need proof that you were covered when you enroll in Medicare later to avoid late enrollment penalties. Moreover, if you work for an employer with 20 or fewer employees, you must enroll in Medicare at 65.

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Bottom line: Unless you are still working with employer health coverage or are covered under your spouse’s, you likely need to enroll at 65.

You also need to decide whether to enroll in traditional Medicare or Medicare Advantage, the all-in-one managed-care alternative to the traditional program that is offered by health insurance companies.

If you enroll in an Advantage plan, it’s difficult to transition back to traditional Medicare, which I will get to shortly.