Due to improved nutrition and increased access to healthcare, we’re enjoying longer, healthier lives than ever. Most of us plan to retire at age 65 or later, imagining that we will enjoy a long and lucrative career. But in reality, 7 out of 10 current retirees quit working before age 65, proving that our best plans don’t always work out. Some of those people probably retired early by choice, and had established enough retirement funds to do so. But many were forced to quit working due to unexpected disability or illness. And that means they retired before reaching Medicare eligibility at age 65.
If this happens to you, you might find yourself without a healthcare plan at the time you need it most! Sometimes retirees maintain coverage under an employer-sponsored health care plan for retirees. But due to rising costs of insurance, many employers are now ditching retiree health plans. This trend is becoming more common, and places the burden of planning for healthcare squarely on the shoulders of early retirees.
Luckily, you can now shop for your own health insurance plan through the exchanges established by the Affordable Care Act. So, if you retire before Medicare eligibility, you can probably purchase your own health insurance. If you’re extra lucky, your former employer might offer a stipend to help with the premiums (rather than maintaining those retiree benefits we just discussed).
That all sounds great, but there’s one catch: Health insurance premiums are often quite high for those with chronic health conditions. You might be eligible to purchase insurance, but find it difficult to afford.
That’s why you should be extra careful about retiring before age 65. Setting aside money in a Health Savings Account (HSA) during your working years can help you save additional money for health care expenses in retirement. You should also watch for notices from your company’s human resources department, in case they announce any changes to retiree health benefits. Finally, schedule a consultation with us to discuss your concerns. We can help you examine your retirement plan, and consider issues such as healthcare to decide your next step.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.