If I retire prior to age 65, how do I get health insurance?
Many people are hesitant to retire prior to the Medicare eligibility age of 65 for fear of not having the access to affordable healthcare coverage. With proper planning and research, obtaining health insurance is possible and doesn’t have to derail your early retirement plans. It’s important to pick the option that is appropriate for your circumstances.
Here are some of the most common options:
Spousal insurance – If your spouse is still working, joining his or her employer-sponsored plan is a great option as often the employer will subsidize some of the insurance payment. Be sure to enroll in the spouse’s plan within 30 days of the qualifying event.
Employer-sponsored retiree benefits – Some employers (albeit not many) do offer insurance plans for retirees. The cost and coverage vary significantly. Some employers will allow retirees to remain on the plans with subsidized premiums, others will expect the retiree to pick up the entire cost of premiums. Depending on the cost and coverage, there may be better options available.
COBRA – Many employers are required to give employees the option to continue coverage for 18 months upon leaving an organization. However, the full cost is covered by you.
Health Insurance Marketplace – You may qualify for a special enrollment on the healthcare.gov website. Depending on the qualifying event, you may have 60 days from the event to obtain insurance. The American Rescue Plan has extended subsidies for marketplace plans through 2025. Since eligibility for subsidies is based on income, it’s important to review your situation to see if this is an affordable option.
Which health insurance option is right for you? It depends! A qualified financial advisor may be able to help. We encourage you to find a guide.
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