The bridge years: retiring before Medicare kicks in
I talk to a lot of Palm Beach County couples in their late 50s and early 60s who did everything right — paid off the house, built up retirement savings, maybe sold a business — and then hit the one variable that isn't in most retirement calculators: how do you cover health insurance for the years between leaving a job and turning 65 for Medicare?
COBRA is the default a lot of people fall back on, but it's almost always the most expensive option, since you're paying the full premium your old employer used to subsidize, plus an administrative fee, often with no subsidy help at all. Most early retirees I work with are shocked at how much better the ACA marketplace looks once we actually run the numbers for their specific situation.
Here's the part that surprises people most: because early retirees often have controllable, lower taxable income in retirement (living partly off savings, Roth withdrawals, or home sale proceeds rather than a paycheck), many qualify for a substantial ACA subsidy — sometimes larger than they'd expect at what feels like a comfortable retirement income level.
Why COBRA usually isn't the right move for early retirees
COBRA lets you keep your exact former employer plan for up to 18 months, but you pay 100% of the premium plus up to a 2% administrative fee, with zero subsidy. For a couple in their early 60s, that can easily run $1,800–$2,400/month combined. Compare that to an ACA Silver or Gold plan, which, with a subsidy based on your retirement-year income, might cost a fraction of that for comparable or even better coverage. We run this comparison for every early retiree client before they default to COBRA.
What to actually check before you retire
Before pulling the trigger on early retirement, I recommend checking three things: your projected ACA-countable income for the gap years (which is different from your net worth or total savings), whether your current doctors and any ongoing prescriptions are covered by marketplace plans in Palm Beach County, and whether a Gold-level plan (higher premium, lower out-of-pocket costs) might make more sense than Silver if you have known upcoming medical needs like a joint replacement or ongoing specialist care.
A real example: retiring at 58 in Delray Beach
A client retiring at 58 from a corporate job in Delray Beach was planning to pay full COBRA rates near $1,100/month for himself alone. Once we mapped his retirement income (mostly 401k rollovers he wasn't touching yet, living on savings and a small pension), his ACA-countable income qualified him for a subsidized Gold plan at $240/month with a much lower out-of-pocket maximum than his old employer plan. He had assumed his "high" retirement net worth would disqualify him — it didn't, because ACA subsidies are based on countable income, not assets.
How Insurance Near Me helps early retirees
- Income vs. COBRA comparison. We run real numbers comparing COBRA to subsidized ACA marketplace plans for your specific retirement income.
- Countable income planning conversation. We explain how ACA-countable income works so you understand what actually affects your subsidy (in coordination with your CPA).
- Doctor and prescription network check. We verify your current doctors and medications are covered before you drop employer coverage.
- Bronze vs. Silver vs. Gold guidance. We help you pick the right metal tier based on your anticipated healthcare needs during the bridge years.
- No cost, ever. This planning conversation and enrollment help is completely free — we're paid by the carrier.
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Frequently Asked Questions
Is ACA insurance cheaper than COBRA for early retirees in Florida?
Almost always, yes. COBRA requires you to pay 100% of your former employer's premium plus an administrative fee with no subsidy. ACA marketplace plans, by contrast, are often subsidized based on your retirement-year income, which is frequently lower than your working income, making Silver or Gold plans significantly cheaper.
Will my retirement savings disqualify me from an ACA subsidy?
No — ACA subsidies are based on your countable taxable income for the year, not your total net worth or savings balance. Many early retirees with substantial savings still qualify for meaningful subsidies because their actual taxable income in retirement is lower than expected.
Can I keep my doctors if I switch from employer coverage to an ACA plan in Palm Beach County?
Often yes, but it depends on the specific ACA plan's network. Florida Blue, Aetna, Humana, and other marketplace carriers each have different provider networks. We check your specific doctors and hospital preferences against available plans before you make the switch.
What happens to my ACA plan when I turn 65?
You'll transition off the ACA marketplace and onto Medicare, generally during your Initial Enrollment Period around your 65th birthday. We help clients plan this transition in advance so there's no coverage gap between your ACA plan ending and Medicare starting.