Medical Insurance for those that Retire before age 65?

[RalphVa]

I retired at 56. My company allowed us to continue on the same Aetna insurance, but it cost us a little more than when I made 65.

Ralph

 

[Oldpath05]

Glad this was mentioned, I'll look into that in about 2-3 more years, ChristianPlans

 

[KennyG]

Here is some information that may work for some people. I retired last year and went on Medicare but my wife is younger and we had to get other insurance. At first we did COBRA from work and it was good coverage but quite expensive, about $12K per year for her. This year we went into the insurance market (Affordable Care or Obamacare). The cost would have been about $10K per year (Blue Cross/Blue Shield) but we are doing what some would consider gaming the system. We have applied for the subsidy. We have lots of money but I have deferred taking social security or starting my pension, as well as taking any distributions from my 401K and IRA. I'm living on savings so I have only the income from dividends on accounts that are not tax deferred.

This is saving us about $6K per year. This will work as long as I can keep my income below about $65K per year. When I hit 70 and have to start taking social security and taking required minimum distribution from retirement accounts the subsidy will end. In the near term, I'm running at some risk of losing the subsidy because they keep calling me from work and offering high paid interesting consulting jobs. If I end up working for a couple of months, I will probably lose the subsidy, but I will have made a lot of money.

If you want to try this approach, you need to plan ahead and make sure you don't get hit too hard on capital gains after you retire.

 

[Oaktree]

Retiring before 65 without health insurance is very expensive. Once you reach Medicare age the cost drops dramatically.

Yeah, no kidding. I retired at 62 and like Gary F. just did without until I qualified for Medicare. Paying the Obamacare penalty was way cheaper than "affordable" insurance...the penalty came to about one month's premium. Fortunately we're both in good health and any medical needs were minor.

 

[Turbys_1700]

I plan on retiring at 62 with my wife following suit. I have my health insurance paid for by the state but will have to purchase insurance for my wife. I'll probably use the stayed plan family plan for her. I think now it's around $800 per month for an 80/20 plan.

 

[ultrarunner]

Ultrarunner,

Not sure if you are saying your retired police friends have no insurance, or was that from example above. If you joined the force at 22 and retire at 52, that's a long time until the government benefits kick in. I'd say it time to start a second career. Get a double paycheck and insurance.

I plan to work until 70, many engineers hang on in some capacity. I'll delay S.S. for a few years so it increases in value.

Clearly people need to look at the whole picture when it comes to retiring. With our aging population, it will get worse before getting better.

The retired police and firefighters here have fantastic lifetime coverage and pensions here with 39 years... it is the 3% per year plus the spike when all unused vacation and sick leave go to dramatically increase the final year. Some do work other jobs and some not.... one never had any kids and at 50 started a family... he couldn't be happier and his pension is about 120k and medical is covered... his wife is 11 years younger and her medical covers the kids so he loves being Mr. Mom.

My question was more about those that find themselves in a position of being retired prior to 65 and not in bad shape except for the Health Insurance question.

Mom did retire at 62 and was on Cobra and was making the transition to a private plan when she was badly attacked by a dog... for 2.5 years she could not get coverage and went without... it worked out OK but going without seems to be a lot less common these days as it was back in the 90's...

 

[Gary Fowler]

You clearly are taking a big gamble being uninsured since even a short hospital stay can run over $100K easily. I took the gamble and won, others may not be so lucky. Accidents can happen to even healthy people.

 

[kcflhrc]

You clearly are taking a big gamble being uninsured since even a short hospital stay can run over $100K easily. I took the gamble and won, others may not be so lucky. Accidents can happen to even healthy people.

Agreed, that's just scary

 

[oosik]

Nine years ago my wife was hospitalized for three months. The bill was $ 1.35 million plus change. Your $100K won't even get you thru the door if its a serious situation. Its a long & sad story but I almost made a run for Mexico because our insurance refused to pay the bill, at first. Can you imagine a pure blood Norwegian eating refried beans & burritos for the remainder of his life - neither can I. I don't imagine I could find lutefisk in 'ol Mexico either.

 

[Peter 315]

Nine years ago my wife was hospitalized for three months. The bill was $ 1.35 million plus change. Your $100K won't even get you thru the door if its a serious situation. Its a long & sad story but I almost made a run for Mexico because our insurance refused to pay the bill, at first. Can you imagine a pure blood Norwegian eating refried beans & burritos for the remainder of his life - neither can I. I don't imagine I could find lutefisk in 'ol Mexico either.

Ouch, That's a big bill it's crazy what they charge