Home chevron_right Guides & Resources chevron_right Investing Health Care for Early Retirement August 21, 2020 If you plan to work until age 65, continuing your health coverage can be a snap—simply switch from your employer-based plan over to Medicare. (For details, check out our podcast on Medicare planning.) But how do you handle health insurance if you want to retire earlier? Here are five options to consider: COBRA. The Consolidated Omnibus Budget Reconciliation Act allows you and your dependents to maintain health coverage under your employer’s plan for up to 18 months after you retire. Beware: Employers generally pay a large portion of the premium while you’re working, whereas now the entire expense will fall on your shoulders. And prices can be steep, especially if you have underlying conditions. We recommend finding out in advance what your employer pays so you can begin to budget for the increased premium. Health Care Exchange. If the 18-month COBRA window doesn’t bridge the gap to Medicare, acquiring individual coverage through the insurance exchange at healthcare.gov is another option. When COBRA expires, you are granted a 60-day enrollment period where you cannot be denied coverage on the insurance exchange based on preexisting conditions. Some states, such as Massachusetts, offer their own exchange for health care plans. However, both paths are expensive. If you expect to use the health care exchange, check healthcare.gov preemptively to shop for a suitable plan. Spousal Plan. If you plan to retire sooner than your spouse, find out if you’re eligible to be included as part of a family plan through their employer. This can be a handy and cost-effective way to maintain health coverage before Medicare eligibility and without purchasing an individual plan on the insurance exchange. Part-Time Work. Many retirees decide to take up part-time work after leaving their full-time careers. If you think this is a possibility for you, check what health benefits may come through your part-time employer. Retirement Package. While this avenue is far less common today than in the past, it is possible you may be eligible for health benefits in retirement through a past employer or union. (Teachers, civil servants and veterans sometimes receive benefits depending on the circumstances of their employment.) If this is something you may qualify for, we recommend making inquiries not just with your current employer but with past employers as well. Early retirement requires preparation. Health coverage is essential, but it can put a dent in your retirement budget. We’re here to help—if this is something you’re considering, make it an agenda item for your next meeting with the financial planner on your wealth management team. This material is distributed for informational purposes only. The investment ideas and opinions contained herein should not be viewed as recommendations or personal investment advice or considered an offer to buy or sell specific securities. Data and statistics contained in this report are obtained from what we believe to be reliable sources; however, their accuracy, completeness or reliability cannot be guaranteed. Our statements and opinions are subject to change without notice and should be considered only as part of a diversified portfolio. You may request a free copy of the firm’s Form ADV Part 2, which describes, among other items, risk factors, strategies, affiliations, services offered and fees charged. Past performance is not an indication of future returns. Tax, legal and insurance information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice, or as advice on whether to buy or surrender any insurance products. Personalized tax advice and tax return preparation is available through a separate, written engagement agreement with Adviser Investments Tax Solutions. We do not provide legal advice, nor sell insurance products. Always consult a licensed attorney, tax professional, or licensed insurance professional regarding your specific legal or tax situation, or insurance needs. Companies mentioned in this article are not necessarily held in client portfolios and our references to them should not be viewed as a recommendation to buy, sell or hold any of them. © 2020 Adviser Investments, LLC. All Rights Reserved.