Turning 65 in Dallas: The Complete Financial Checklist for DFW Pre-Retirees
The year you turn 65 is the most expensive year to get wrong.
Miss the Medicare enrollment window and you pay a penalty for life. Trip an IRMAA cliff by $1 and you owe Medicare thousands more in premiums per person, per year. Forget to file your over-65 property tax exemption with the appraisal district and you leave thousands on the table while your school taxes keep climbing.
Most of the generic “turning 65” content online is written for people pulling a $30,000 Social Security check and not much else. That’s not who lives in Plano, Highland Park, or Frisco. If you’re a DFW pre-retiree with a $300K+ household income, a 401(k) balance north of $2 million, and a Lockheed or PepsiCo pension benefit, the rules work differently for you. The traps are bigger too.
Here’s what to do – in the order it matters.
When does your Medicare enrollment window open?
Your Initial Enrollment Period is a seven-month window: three months before your birth month, the month you turn 65, and three months after.
Enroll in the three months before your birth month. Coverage starts the first of your birthday month and you avoid any gap. Wait until after your birthday and coverage gets delayed by a month or more.
If you’re already collecting Social Security when you turn 65, you’ll be auto-enrolled in Parts A and B. Your card shows up in the mail about three months before your birthday. If you’re not yet on Social Security, you have to enroll yourself at ssa.gov.
Still working past 65? This is common for DFW engineers at Lockheed, RTX, Texas Instruments, and Northrop. If your employer has 20 or more employees and you have creditable group coverage, you do not have to enroll at 65. When your employer coverage eventually ends, a Special Enrollment Period gives you 8 months to enroll in Part B without owing the late-enrollment penalty.
If you’re still contributing to an HSA, do not enroll in Part A. Medicare enrollment of any kind disqualifies you from making new HSA contributions, and Part A coverage is retroactive up to six months when you do eventually enroll, which can claw back HSA contributions you’ve already made. Most people assume “Part A is free, so why not?” The HSA problem is the reason why not.
Coordinate with HR before your birth month so you don’t accidentally drop coverage you still need or trigger Medicare enrollment you don’t want.
How will IRMAA affect your 2026 Medicare premium?
IRMAA is the Income-Related Monthly Adjustment Amount. It’s the Medicare surcharge that hits high earners, and almost every one of our clients triggers it in their first year on Medicare.
The standard 2026 Part B premium is $202.90 per month. If you cross the first IRMAA threshold, your total premium jumps to $284.10. At the top tier, you pay $689.90 per month per person. Part D drug coverage carries its own surcharge of $14.50 to $91.00.
Three things to understand:
- The two-year lookback. Your 2026 premium is based on your 2024 modified adjusted gross income. If you earned big in 2024 and retire in 2025, you’re still paying IRMAA in 2026 based on the old number.
- The cliff effect. IRMAA isn’t a marginal calculation. One dollar over a threshold pushes you into the full surcharge for that tier. A Roth conversion or realized capital gain that lands you $1 over a bracket can cost you thousands.
- The thresholds. For 2026, the first IRMAA tier hits at $109,000 single or $218,000 joint MAGI. Almost every high-income DFW pre-retiree lands in at least Tier 2 their first year on Medicare.
How to appeal IRMAA after retirement (Form SSA-44)
Many retirees pay IRMAA they don’t actually owe. The fix is a single form most people have never heard of: SSA-44, “Medicare Income-Related Monthly Adjustment Amount – Life-Changing Event.”
Retirement counts as a qualifying life-changing event under the category of “work stoppage.” If you retired in 2025, your 2026 Medicare premium is still based on your 2024 income — when you were working full time at your peak earnings. SSA-44 lets you ask Social Security to use your current estimated income instead of the 2024 number.
How to file:
- Wait for your IRMAA determination letter. Don’t file SSA-44 preemptively. Social Security has to tell you they’re charging IRMAA before you can appeal it.
- Download Form SSA-44 from ssa.gov. Each spouse files separately.
- Document the event. A retirement letter from your employer on letterhead, or a final pay stub showing your last day, is enough.
- Estimate your new income. A realistic projection of your post-retirement MAGI is fine. You don’t need a completed tax return.
- Submit it. Upload through your ssa.gov account, fax, mail, or drop it at your local Social Security office.
Approved appeals are typically processed within a few weeks, premiums get adjusted prospectively, and any overpayment gets refunded.
If your appeal gets denied or the wrong year is used, you can file again the following year. You can also keep filing each year as long as your income stays low enough to qualify.
This single form has saved our clients $5,000 – $10,000 per year in unnecessary Medicare premiums.
Should you claim the Dallas over-65 property tax exemption?
Absolutely. The rules vary by county and city, so know which apply to you.
State-level: Every Texas homeowner gets a $140,000 homestead exemption on school district taxes. At 65, you get an additional $60,000, for a total of $200,000 exempted from your school taxes.
School tax ceiling: The year you turn 65, your school district taxes get capped at that year’s amount. They can drop in future years if your appraisal falls, but they cannot rise above the ceiling as long as you own and live in the home. Major improvements (adding a pool, putting on an addition) can adjust the ceiling. Routine maintenance does not.
City of Dallas: The City Council raised its over-65 or disabled homestead exemption to $175,000 for the 2025 tax year. If your home is inside Dallas city limits, this stacks on top of your state homestead exemption and applies to the City portion of your tax bill.
Where to file:
- Dallas Central Appraisal District (DCAD) if your property is in Dallas County
- Collin Central Appraisal District (CCAD) if your property is in Collin County (most of Plano, Frisco, McKinney, Allen)
- Denton CAD or Tarrant CAD for properties in those counties
File Form 50-114. The deadline is April 30 of the tax year you turn 65, though late filings are often accepted. You qualify for the full year you turn 65.
Texas now requires homestead exemption re-verification every five years. Watch your mail. A missed verification letter will cost you the exemption.
One trap to avoid: the over-65 property tax deferral is not the same as the exemption. The deferral postpones your property taxes indefinitely, but they keep accruing with interest and come due when you sell the home or die. It’s a last-resort tool, not a planning strategy.
When should you claim Social Security?
Don’t claim Social Security at 65 just because you’re signing up for Medicare. They’re separate decisions.
Your Full Retirement Age is 67 if you were born in 1960 or later. Each year you delay claiming past FRA, your benefit grows by 8%. Wait until 70 and you collect 124% of your FRA benefit, locked in for life and adjusted annually for inflation.
For high-income DFW pre-retirees, the default move is usually to delay. Three reasons:
- You don’t need the income. Your 401(k), brokerage, and pension can carry you. Spending down those accounts first lowers your future RMDs and creates room in lower tax brackets for Roth conversions.
- You’re the higher earner. Your benefit becomes your surviving spouse’s benefit. A bigger Social Security check is the cheapest longevity insurance you can buy.
- The math favors delay if you live into your 80’s. Most high-income, healthy DFW retirees do. The “78-year average life expectancy” figure is dragged down by infant mortality and lower-income populations with very different health profiles. For a healthy 65-year-old couple in your income bracket, there’s roughly a 70% chance at least one spouse lives to 90, and a 25% chance one reaches 95.
Reasons to claim earlier: you have a serious health issue, family history of early mortality, no pension, or your spouse needs a spousal benefit started. Every situation is different, and you need to run the numbers (and consider the tradeoffs) before deciding which path is right for your family.
Keep in mind that Social Security is the only income stream you’ll have that’s inflation-adjusted, government-backed, and guaranteed for life.
What should you do with your 401(k) at 65?
Three options: leave it in the plan, roll it to an IRA, or do a partial rollover with NUA treatment.
Leave it: Many 401(k) plans (Lockheed Salaried Savings Plan, RTX Savings Plan, TI Contribution and 401(k) Savings Plan) offer institutional-class funds at low cost. Creditor protection inside a 401(k) is stronger than in an IRA. If you separate from service in the year you turn 55 or later, you can take penalty-free distributions from the 401(k) — though by 65 this matters less.
Roll to an IRA: Gives you broader investment choices, simpler beneficiary planning, and the flexibility to convert to Roth as well as the option for professional management from an independent advisor. Watch for higher fees if you’re moving out of an institutional plan.
NUA (Net Unrealized Appreciation): If you have employer stock in your 401(k) – like many Lockheed Martin, Raytheon Technologies, Texas Instruments employees do – here’s a one-time tax strategy that can save six figures. You distribute the employer stock in-kind to a taxable brokerage account, pay ordinary income tax only on the cost basis, and the appreciation gets taxed at long-term capital gains rates when you sell. The execution is technical, so be sure to get professional help. This is not one that you want to turn into a blooper by DIY-ing.
The Roth conversion window between 65 and RMDs
The years between retirement and your first Required Minimum Distribution (RMD) are the most valuable tax planning years of your life. Unfortunately, many DFW retirees never use this window strategically.
Under SECURE 2.0, RMDs start at 73 (or 75 depending on your birth year). Assuming retirement at age 65, that gives you roughly eight years before your first RMD, often called the “tax valley.”
In that valley, your income is low. Your tax bracket is low. And Texas has no state income tax, so every dollar you convert costs you only federal tax – a structural advantage Californians and New Yorkers don’t have.
The play: convert pre-tax IRA balances to Roth each year, filling up to the top of your target federal tax bracket, while considering the impacts of IRMAA thresholds (a balancing act). Done right over 8 years, this can permanently shift hundreds of thousands of dollars from a taxable to a tax-free bucket and dramatically lower your lifetime tax bill.
Done wrong, you can convert too much, overpay taxes, and trip IRMAA cliffs which reduces the benefits. Roth conversions are great for some situations and awful for others, so be sure to run the numbers for your individual situation – or delegate this to a professional.
The turning-65 in Dallas checklist
- Enroll in Medicare three months before your birth month
- Confirm your employer coverage if you’re still working past 65
- File Form 50-114 with your appraisal district for the over-65 homestead exemption
- Confirm the City of Dallas $175,000 exemption if inside city limits
- Project your 2024 and 2025 MAGI against the 2026 IRMAA thresholds
- File Form SSA-44 if you’ve retired and your current income is lower than your 2024 income
- Decide on Social Security timing: claim, delay, or coordinate with a spousal strategy
- Review your 401(k) options: leave, roll to IRA, or NUA on employer stock
- Build a written Roth conversion schedule through your tax valley
- Update beneficiary designations on every account and review your estate plan while you’re at it
- Re-verify your homestead exemption with the appraisal district (required every five years)
- Write down your withdrawal sequence: which account funds to draw from in which year for maximum tax efficiency – nobody wants to overpay the IRS!
When does it make sense to work with a flat-fee advisor for retirement planning?
Every decision in this checklist interacts with the others. Medicare timing affects IRMAA. IRMAA affects Roth conversion sizing. Roth conversions affect future RMDs. RMDs affect Social Security taxation. Social Security timing affects your surviving spouse.
A single mistake like claiming Social Security too early, missing your Medicare enrollment, tripping an IRMAA cliff with a Roth conversion that was almost the right size can cost you a significant amount of money. And that’s not even considering the cost of an inappropriate investment portfolio that’s not optimized for this next stage of life.
At 7 Saturdays Financial, we specialize in working with DFW pre-retirees on a flat annual fee, with deep specialization in retirement income planning for high-income professionals. Our flat fee pricing tends to be a cost-effective option for those with nest eggs of $1.5M or more.
If you want to talk through your turning-65 year, schedule a complimentary intro meeting.
Frequently asked questions
Do I have to enroll in Medicare at 65 if I’m still working?
If your employer has 20 or more employees and you have creditable group health coverage, you do not have to enroll at 65. When your employer coverage ends, a Special Enrollment Period gives you 8 months to enroll in Part B without owing the late-enrollment penalty. If you’re still contributing to an HSA, you should also delay Part A — Medicare enrollment disqualifies you from new HSA contributions, and Part A coverage is retroactive up to six months. Coordinate with HR before your birth month.
What’s the income limit before IRMAA hits in 2026?
The first IRMAA tier kicks in at $109,000 modified adjusted gross income for single filers and $218,000 for joint filers, based on your 2024 tax return. The top tier hits at $500,000 single or $750,000 joint.
How much can the Dallas over-65 exemption save me?
It depends on your home’s value, your taxing entities, and whether you’re inside Dallas city limits. The state over-65 exemption removes $60,000 from your school district taxable value on top of the $140,000 general homestead. The City of Dallas over-65 exemption removes another $175,000 from the City portion. Most high-value Dallas homes see savings of $1,500 to $4,000 per year.
Does Texas freeze all my property taxes at 65?
No. Only school district taxes are automatically frozen at the year-you-turn-65 amount. Cities, counties, and special districts may offer their own freeze, but they’re not required to. Check with each taxing entity.
Can I do a Roth conversion after I turn 65?
Yes. There’s no age limit on Roth conversions. The constraint is the IRMAA two-year lookback. A conversion done in 2026 affects your 2028 Medicare premiums. Plan conversions in coordination with the IRMAA brackets.
Should I claim Social Security at 65 to coordinate with Medicare?
No. They’re separate decisions. Medicare eligibility starts at 65 regardless of when you claim Social Security. For many high-income DFW pre-retirees, delaying Social Security to age 70 produces a meaningfully larger lifetime benefit. Consider the tradeoffs of claiming early vs. claiming later and model out the scenarios for your specific circumstances.
Can I appeal IRMAA after I retire?
Yes. File Form SSA-44 with Social Security. Retirement qualifies as a “work stoppage” life-changing event. You’ll need a retirement letter from your employer and an estimate of your post-retirement income. Wait for your IRMAA determination letter before filing the appeal.
What if I miss the Medicare enrollment window?
You’ll pay a Part B late enrollment penalty of 10% of the standard premium for each full 12-month period you were eligible but didn’t enroll. The penalty applies for as long as you have Part B — for life. Don’t miss the window.
I’m about to retire. How do I create retirement income from my 401(k)?
Accumulating money in your 401(k) is one thing, but turning it into reliable income that lasts 30+ years is a different challenge entirely.
How much can you safely spend? Which accounts do you draw from first? How do you coordinate your 401(k) with a pension and Social Security — and minimize your lifetime tax bill along the way?
These questions don’t have one-size-fits-all answers. Getting them wrong can mean retiring later than you planned, running out of money, or overpaying the IRS.
At 7 Saturdays Financial, retirement income planning is our core focus. We specialize in helping pre-retirees and retirees build comprehensive plans that address not just investments, but spending strategy, tax efficiency, and the peace of mind that comes from knowing you have a plan that’s prepared for whatever life throws your way.
We’re a fee-only, flat-fee firm with no products to sell and no incentive tied to which funds you hold. Our only job is to help you retire with confidence and spend with clarity.
About the author: Allen Mueller, CFA, CFP®, is an “engineer turned finance nerd” and founder of 7 Saturdays Financial, a wealth management firm based in Dallas, Texas.
The core focus of 7 Saturdays Financial is helping high performers retire with confidence and make the most of their 7 Saturdays a week.
