‘I Can’t Retire – I Need Health Insurance’
Health insurance is seen as a huge hurdle for early retirees, but the answer to finding affordable coverage could be simpler than you think.
You are now subscribed
Your newsletter sign-up was successful
Want to add more newsletters?
Delivered daily
Kiplinger Today
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more delivered daily. Smart money moves start here.
Sent five days a week
Kiplinger A Step Ahead
Get practical help to make better financial decisions in your everyday life, from spending to savings on top deals.
Delivered daily
Kiplinger Closing Bell
Get today's biggest financial and investing headlines delivered to your inbox every day the U.S. stock market is open.
Sent twice a week
Kiplinger Adviser Intel
Financial pros across the country share best practices and fresh tactics to preserve and grow your wealth.
Delivered weekly
Kiplinger Tax Tips
Trim your federal and state tax bills with practical tax-planning and tax-cutting strategies.
Sent twice a week
Kiplinger Retirement Tips
Your twice-a-week guide to planning and enjoying a financially secure and richly rewarding retirement
Sent bimonthly.
Kiplinger Adviser Angle
Insights for advisers, wealth managers and other financial professionals.
Sent twice a week
Kiplinger Investing Weekly
Your twice-a-week roundup of promising stocks, funds, companies and industries you should consider, ones you should avoid, and why.
Sent weekly for six weeks
Kiplinger Invest for Retirement
Your step-by-step six-part series on how to invest for retirement, from devising a successful strategy to exactly which investments to choose.
It is one of the most discussed reasons people refuse to retire before age 65. There are plenty of reasons someone may not retire, including a lack of income, the fear of running out of money, the loss of identity, boredom, no longer having a sense of purpose. Surprisingly one of the biggest ones we encounter is health insurance. As we age, the presence of health insurance becomes just as much a necessity as income. Some view it as a higher priority, allowing insurance to dictate if/when they can retire.
You can start collecting Social Security as young as age 62 or as late as age 70. However, you can’t go on Medicare until age 65. The gap between age 62 and 65 forces a lot of pre-retirees to postpone retirement until they can go on Medicare to make sure they have adequate health insurance. But this may not have to be the case.
Enter Obamacare
On March 23, 2010, the Affordable Care Act (ACA) was enacted ensuring that all Americans were given the right to health insurance. This new law came with much criticism and confusion. At the time, a lot of the criticism of the ACA concerned the possibility of higher premiums, low levels of coverage, increase in taxes and limited enrollment.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Twelve years later, we have a much better understanding of the ACA and how it can benefit all of us, including those under the age of 65.
When we mention the ACA as an option to those who want to retire by age 65, the first reaction typically is not a positive one. People assume that the insurance coverage is terrible and expensive. That is untrue. The ACA has matured quite nicely since its inception and gives you control over how much coverage you want and need.
The website for my home state’s program, www.nj.gov/getcoverednj/, provides New Jersey residents a comprehensive and easy to understand list of coverage options. The providers are listed so that you can make sure your doctor is in the networks. The plans are administered through companies you know, such as Horizon Blue Cross Blue Shield and AmeriHealth. The best part is you don’t need a Ph.D. to comprehend the offerings. Shocking, I know.
Residents in other states can learn about their options at healthcare.gov or find information about their particular state’s program by visiting www.healthcare.gov/marketplace-in-your-state/.
The Cost May Surprise You – in a Good Way
The cost of health insurance through the ACA, however, does cause real confusion. This is another big deterrent for retiring before 65 with no health care through your employer or your spouse’s employer. The monthly cost to you, the enrollee, is based on your expected household income for the year you need coverage. Here is the good news: When you retire you may have little to no earned income.
For clients who retire before 65, most of the money they live off first could be money in their checking/savings accounts or non-IRA money. These are their most liquid assets. If this is the case, when applying for health insurance, your low income could cause your premiums to be much lower than you anticipated. Your health insurance through the ACA can be at a significantly reduced cost – or maybe even free. In retirement, you can determine your sources of income. That type of flexibility can help.
The enrollment process is simple. If you are planning to retire, that is considered a “life event,” qualifying you to apply and enroll at the time of retirement.
Maybe Retirement Is in Your Reach Afterall
This is not an endorsement for the ACA but a way to provide options and clarity on a topic that can be uncomfortably confusing. It is bothersome to see people grind out their last few years of work to hit that magic number of 65. Had they known they had this option, maybe they would have enjoyed a few more years in retirement.
If you are considering retirement before age 65 but think you can’t due to health insurance, we encourage you to investigate this option. The websites mentioned above are easy to navigate and understand. We have seen this method used as an effective tool to retire earlier than previously anticipated.
We are not health insurance experts but have seen the health insurance marketplace mature nicely, and you could potentially benefit from it if you hope to retire early.
Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Reich Asset Management, LLC is not affiliated with Kestra IS or Kestra AS. The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation. To view form CRS visit https://bit.ly/KF-Disclosures.
-
How Much It Costs to Host a Super Bowl Party in 2026Hosting a Super Bowl party in 2026 could cost you. Here's a breakdown of food, drink and entertainment costs — plus ways to save.
-
3 Reasons to Use a 5-Year CD As You Approach RetirementA five-year CD can help you reach other milestones as you approach retirement.
-
Your Adult Kids Are Doing Fine. Is It Time To Spend Some of Their Inheritance?If your kids are successful, do they need an inheritance? Ask yourself these four questions before passing down another dollar.
-
The 4 Estate Planning Documents Every High-Net-Worth Family Needs (Not Just a Will)The key to successful estate planning for HNW families isn't just drafting these four documents, but ensuring they're current and immediately accessible.
-
Love and Legacy: What Couples Rarely Talk About (But Should)Couples who talk openly about finances, including estate planning, are more likely to head into retirement joyfully. How can you get the conversation going?
-
How to Get the Fair Value for Your Shares When You Are in the Minority Vote on a Sale of Substantially All Corporate AssetsWhen a sale of substantially all corporate assets is approved by majority vote, shareholders on the losing side of the vote should understand their rights.
-
How to Add a Pet Trust to Your Estate Plan: Don't Leave Your Best Friend to ChanceAdding a pet trust to your estate plan can ensure your pets are properly looked after when you're no longer able to care for them. This is how to go about it.
-
Want to Avoid Leaving Chaos in Your Wake? Don't Leave Behind an Outdated Estate PlanAn outdated or incomplete estate plan could cause confusion for those handling your affairs at a difficult time. This guide highlights what to update and when.
-
I'm a Financial Adviser: This Is Why I Became an Advocate for Fee-Only Financial AdviceCan financial advisers who earn commissions on product sales give clients the best advice? For one professional, changing track was the clear choice.
-
I Met With 100-Plus Advisers to Develop This Road Map for Adopting AIFor financial advisers eager to embrace AI but unsure where to start, this road map will help you integrate the right tools and safeguards into your work.
-
The Referral Revolution: How to Grow Your Business With TrustYou can attract ideal clients by focusing on value and leveraging your current relationships to create a referral-based practice.
