The dream of early retirement comes with numerous challenges, but perhaps none are more daunting than securing affordable healthcare. As we weigh the implications of leaving the workforce before age 65, the reality of steep medical expenses looms large on the horizon. With Medicare eligibility delayed until that milestone age, early retirees must navigate a complex landscape of insurance options to bridge the gap.
- Average Costs of Health Insurance for Ages 62-65:
The cost of health insurance for individuals aged 62 to 65 can vary significantly based on factors such as location, health status, and the chosen plan. Here is an approximate breakdown of the average costs across different types of coverage:
- ACA Marketplace: $800 to $1,200 monthly (without subsidies)
- Employer-Sponsored: $200 to $600 monthly (if employed)
- COBRA: $700 to $1,500 monthly (based on previous employer’s plan)
Can you afford early retirement healthcare and an early retirement? Utilize the Boldin Retirement Planner to assess your financial readiness for early retirement and consider the following possibilities to cover health care costs:
- Private Individual Coverage:
While private insurance may be the most expensive option, it offers flexibility that could be worth exploring. - Affordable Care Act (ACA or Obamacare):
Love it or hate it, the ACA has made health insurance costs for early retirees more attainable and affordable. With the provisions of the ACA, individuals can obtain insurance regardless of preexisting conditions, making it a viable option for those in their 50s and 60s. -
COBRA Continuation Coverage:
In the event of a job loss, COBRA can provide access to your previous employer’s group health plan for a limited time. Though more expensive than employer-subsidized coverage, it still represents a more affordable option compared to self-insuring. -
Spousal Benefits:
Utilizing a spouse’s health insurance plan can offer significant savings to couples where one partner is retiring early and the other is still employed full-time. -
Health Savings Account (HSA):
Contributing to an HSA while working can create a tax-free reserve to cover early retirement healthcare expenses. HSAs can be used to pay for various medical costs and even certain insurance premiums. -
Stay Active and Healthy:
A crucial aspect of early retirement planning is maintaining good health by staying active and engaged within the community. Physical activity can not only reduce healthcare costs but also contribute to overall well-being. -
Part-Time Jobs with Benefits:
Consider part-time employment with companies offering health care benefits to part-time employees. Brands like Whole Foods, Costco, and Starbucks are known for providing healthcare coverage to eligible part-time staff. -
Health Care Sharing Programs:
Explore the option of joining health care sharing programs, which involve a collaborative approach to covering medical expenses. Christian-based programs offer a cost-effective alternative, though they come with some unique risks compared to traditional insurance.
Ultimately, creating a comprehensive retirement plan that includes a strategy for healthcare funding is essential for all retirees, regardless of the age at which they choose to exit the workforce. The Boldin Retirement Planner stands as a valuable tool in laying out your financial landscape, ensuring that you are equipped to face the challenges of healthcare costs in retirement.
