Kiplinger’s recent article entitled “I Can’t Retire – I Need Health Insurance” explains that you can begin collecting Social Security as young as age 62 or as late as age 70. But you can’t go on Medicare until 65. The gap between age 62 and 65 makes many folks delay their retirement until they can go on Medicare to make sure they have adequate health insurance.
However, it doesn’t have to be the case.
In 2010, the Affordable Care Act (ACA) was passed and ensured that all Americans had the right to health insurance. Now we have a much better understanding of the ACA and how it can benefit all of us, including those under 65.
People think that the insurance coverage is terrible and expensive under the ACA. But that’s not true. The ACA has evolved to provide control over how much coverage you want and need. Residents can learn about their options at www.healthcare.gov or find information about their particular state’s program by visiting www.healthcare.gov/marketplace-in-your-state/.
But the cost of health insurance through the ACA does create confusion. This is another obstacle for retiring prior to 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. But here’s the good news: when you retire you may have little to no earned income.
For those who retire before 65, most of the money they live off first could be money in their checking/savings accounts or non-IRA money—their most liquid assets. If that’s the case, when applying for health insurance, a low income could cause your premiums to be much lower than you anticipated.
Our health insurance through the ACA can be at a dramatically reduced cost – or maybe even free. In retirement, you can determine your sources of income. And this flexibility can help.
The enrollment process is simple. If you’re planning to retire, it’s considered a “life event,” qualifying you to apply and enroll at the time of retirement.
Reference: Kiplinger (Aug. 7, 2022) “I Can’t Retire – I Need Health Insurance”
Suggested Key Terms: Estate Planning Lawyer, Health Insurance, Affordable Care Act (ACA), Retirement Planning