Retired Early - Insurance?

As I've alluded to previously, I involuntarily retired early when my company decided they no longer needed an on-site IT department. 32+ years was a good run and I decided to passively look for a job but it had to THE right job. Never happened so I have been retired since I was 57 in 2020.

Fast forward to now and my wife is retiring at 61 at the end of July. At that time, COBRA is pretty expensive and neither of us is old enough to sign up for Medicare so we are take an ACA insurance plan with an All State supplement for less than $650 a month, which is heavily subsidized since I'm not drawing a check and my wife's income going to 7/12's of her annual pay as an advisor/instructor at the local college.

Has anyone else retired before Medicare kicked in and how did it work out for you?

If it helps, I'm the kind of guy that goes to the doctor once a year for a checkup, so I don't die of something easy to fix if caught early. My wife has a heart doc, skin doc, female doc, chiropractor as well as her regular doc for high cholesterol and type2 diabetes checkups 4 times a year.

 

Oh boy, prepare to go down the rabbit hole.
I retired last year at 60 y/o. I signed up for the ACA plan.
The big caveat is the amount you pay is based on your income, to an extent.
I got the Silver plan from Blue Cross, it would cost about $800 a month without subsidies.
If I keep my annual income below about $27k, I pay nothing towards the monthly cost, it's fully subsidized. However, I do need to have an annual income of at least $18k to qualify for it, otherwise I would have to go with a Medicaid plan which doesn't provide as much coverage. If I make more than the $27k (or so), my monthly subsidy amount would be reduced and I would have to make extra payments towards my ACA plan.
The challenge is having enough income to qualify, but not too much so I don't have to pay extra for the coverage, so between $18k and $27k annual for me.... I did a lot of shuffling of funds at the end of the year to meet my number.

I've been fortunate with good health so far. But my cat just spent a week in the hospital for Pancreatitis which cost me close to $7k.... and isn't covered by insurance. Sometimes stuff just blindsides you...

 

Cat? 7K???

 

Watching this thread with interest-

I plan on retiring in about 2 years at around 59/60 years old when my youngest is done with college. Wife is a few years younger (and likes her job unlike me) so planned on going on her insurance until I am eligible for Medicare. Her premium is fully paid by her employer, but adding me turns it into a "family plan", doesn't matter if you add 1 person or 5. Premium is $1,000/month. Yikes! 2/3rds of her income would be spent on insurance premiums for me. I will need to find another plan.

 

Are you healthy? Do you take medication regularly? Put the 1000 a month in an HSA, tax free. Use it for any health related expenses until you’re eligible for Medicare. Gamble without insurance. If you don’t use it by the time you get insurance you’ll have a nice nest egg.

 

I guess I am more than happy with my retirement plan.I had 28 years in and both my wife and I have full coverage for medical for the most part. I am 60 1/2 and only have $160 per month taken out for my insurance. I lost my dental and eye insurance,but have a supplemental insurance for both for $86 a month.

 

The way I look at it is health insurance will be our biggest expense by far when we retire early in a year or two. I am estimating $1000 each per month for coverage and around another $1000 per month in premiums. Yep $48,000/year. Of course we hope it will be less but I need to play it safe. Lots of folks have enough money to retire and live well but not if they have to come out of pocket for insurance.
Cliff

 

If you worked in the private sector your whole life odds are you won't have a pension and you're on your own with medical insurance. That is my situation. Would like to retire at 62 but the medical insurance side may prevent it and that is with my wife and I not having any health conditions (currently). I am trying to convince her to work until she is 62 (3 years younger than me) but that is a tough sell. Even so, her company insurance sucks and is very expensive. I am looking into taking advantage of the NYS version of Obama care which has income restrictions like mentioned in another post. Not going to try the no insurance route, I did have a kidney stone last fall and the bills were stupid high for a not so serious problem (it did hurt like hell but it passed on its own). Out of pocket on that one would have been crazy and as you get older you never know what is going to creep up on you health wise.

 

I retired at 63. I had worked for 24 years in the Private sector and 23 for a public school district. I paid into social security while in the private sector, but during the Reagan administration they changed the way that Social Security benefits were paid. I didn't know it at the time, but I would have received only 1/3 of what I would have if I had 30 years in the Social Security System. In 2004 the Democratic National Convention was in Boston and my wife spotted a help wanted ad for a limousine service during the convention. I signed up and worked for one week with Social Security deducted. I still didn't know it at the time, but that week gave me 25 years in the Social Security system, and I now qualified for 2/3 of the full benefit package. I calculated that week of driving a Limousine 19 hours per day was the most financially profitable week of my life. As Richard Petty said: "I'd rather be lucky then good."

 

That's why we are paying $650/month for the both of us. I had very little income, mostly from a gas drilling investment that messed up my taxes last year and had to pay over $10,ooo! OUCH. I was on her plan for the last 3 years but she's tired of the work and the people she has to deal with so she's checking out. I told her when I retired she could quit but she liked the job 3 years ago.

I'm also in excellent health for a 61 year old man. The only medicine I take is for reflux and I've got a year's supply stockpiled. Still got my knees, hips and shoulders. I can get up from a position sitting on the floor (happens often with a dog in the house) without using my hands or grabbing onto something.

I had a pension for the first 20 years I worked there but they capped it off once they came out of bankruptcy. I took it as a lump sump when they "retired" me. Though in hindsight, it would have paid my insurance and then some. Instead, I took it as a lump sum and I've had it invested for the last 3 years and it has grown nicely despite the COVID slump. I also rolled my 401ks as I didn't want to be limited by the small pool of investments they offered in the plan. I have no financial ties to them now and I like it that way.

As it stands, we have projected we can live off of investments and not draw Social Security until 70.

Like wkillgs and I, you should qualify for for an ACA "Obamacare" plan with subsidies if your income isn't too high. My wife and I are both covered under ACA for less than $500 combined and the supplemental to eliminate a lot of deductibles is only another $150.

I was on my wife's plan and it was about $350 a pay period or $700/month for me to be on her policy. Once I retired, we looked at the vision and dental insurance premium vs benefit and found that the premiums didn't 100% cover basic services we were paying for. So, we paid $450 a year for dental and 2 people with 2 cleanings and X-rays once a year was slightly less. Vision is cheaper out of pocket, too!

Both my wife and I have sizeable invested HSA fund each. Also, as I understand it, if you have medical expenses and didn't take any HSA funds, you can go back several years and pay yourself a lump sum reimbursement with no problems. Neither of us had drawn a penny against our HSAs since inception so that's my ace in the hole if things get tough.

Is that with no subsidies? My wife worked for 7 months of the year and we still get a pretty good subsidy on ACA. Once I quit rolling 401K to ROTH, my income dropped to next to nothing on taxes.

This seems like this might be a good thread for folks to compare notes and get ideas. Good discussion! I'm liking it.

 

One of the most interesting things about the ACA is that it’s solely based upon income-NOT assets. So a person or couple could have two million, five million, hell, a billion dollars in assets and still qualify. You have to structure your income so that it stays below a threshold. You structure any payouts, reinvest any dividends, don’t sell stock to avoid capital gains, etc; so that your actual taxable income is low. I strongly suggest talking to a financial advisor about this strategy. Is it fair or right to scheme the government? Well, it’s legal, and if Washington doesn’t like it then they should change the law. (Until then, remember-these are the folks who lost $400 billion (B-billion!) of our money to Covid thieves).
https://www.cnbc.com/2016/01/27/theyre-millionaires-and-they-get-obamacare-subsidies.html
Patrick

 

Yep, I'm working it to my advantage though ACA doesn't have plans that offer similar coverage to our existing plans without the supplemental add-on.

I figure I've paid in for the last 40 years and gotten very little in return for my hard earned money. Time to get some of mine back with interest.

 

It’s all a gamble; ‘ya pays your money and ya takes your chances’.

My parents chose not to fund long term health insurance; they just had BCBS as Federal retirees. Dad ‘won’; he died less than four months after being diagnosed with what became three different cancers and short term insurance covered it all. Mom ‘lost’; broke a hip, spiraled through heart failure and dementia, and was private pay (with sitters 24 hours a day at $15/hr!) in an assisted living facility for 18 months. Had she not been well off, my wife and I would have been faced with the choice of shouldering that care burden ourselves (financially, physically, or both) or had to liquidate what assets she did have, then put her in a Medicaid funded nursing home. It’s a goddamn shame that the feds will pay $5700 a month for a nursing home (even if the person only needs ‘assistance’) but won’t spend $3700 for assisted living.
My wife and I are self employed and don’t have long term insurance. I know that I don’t want to be a burden for my family and I don’t want them liquidating a decent inheritance so I can drool and stare at the ceiling. I’ve told my wife that, if things go irrevocably pear shaped and there’s no hope, I’m sending them shopping while I go for a walk (or roll, or..) in the woods.
Patrick

 

We've got power of attorneys, living wills and wills setup for most contingencies. Our life insurance allows for long term care payout to the full death benefit. That's all the long-term care we have. It should last at least 2-3 years before having to touch anything else.

 

In my area, I hear a radio advertisement for Medi-Share Christian Health Care. I know nothing about it, just throwing it into the mix for anyone researching health coverage.

 

A car buddy of mine has good things to say about this

 

Got medicare, but cost a lot as my wife still works and am collecting SSI, my pension (small) and taking my RMD's from what I saved.. I have full coverage from the VA as I am a Viet Nam vet. I would like to drop the medicare as I have the VA, but can't find enough info on it. That would be a big savings, but might limit where I can get services. So far I have been happy using the VA, but I have not had any major issues.
For any of you that are Viet Nam vets, you get full coverage due to agent orange. If your not enrolled do it. You can at least get your meds for a low copay through them.

 

We are shopping for insurance too. I retired at 60 and my wife will be retiring early next year at 62. We have readily been doing Roth conversions as well to try and keep from jumping tax brackets down the road. We are on her insurance through work until she does retire then we will need coverage. Not planning to roll the dice with no insurance so will shop around and pay the piper. Following this thread to learn about policies and prices people are happy with.

 

I looked into it, even had a phone call with them. They don't have any of our doctors participating in their program. It can be very limiting if you have to travel an hour or more to see a doctor. None of our local hospitals are in it either. From my checking, it looks like major metro areas, like Atlanta or Cincinnati would be a good choice.

Find someone in your area that can do ACA plans. A lot of Medicare supplement folks can write those policies but many won't. It used to not pay much but now they are paying agents again so it is enticing them back into the market.