You’ll face more major financial decisions than ever as you approach retirement. And most of those decisions involve “big dollars,” including Medicare.

If you’ve already filed for Social Security benefits, Medicare enrollment is automatic at age 65. If you’re not yet drawing Social Security, you’re required to sign up for Medicare during the seven month window around your 65th birthday. This window includes the month you turn 65 and the three months before and after your birthday month.

Failing to sign up for Medicare during the required timeframe will cost you a big-time penalty. The Medicare Part B premium (for medical insurance) and Part D premium (for prescription drug plans) jump 10% for each full 12-month period that you were eligible but didn’t sign up. If you wait for 5...