The pre-Medicare gap — the biggest hidden cost of early retirement
You did it — you retired before 65. Congratulations. Now the calculator gets real: how do you pay for health insurance for 5, 7, or 10 years before Medicare kicks in? A couple in their late 50s can easily be quoted $2,500–$4,000/month for a couple's plan without help.
Here's what most financial advisors miss: if you're living off savings or IRA withdrawals, you control your reported income — and the ACA subsidy formula rewards that heavily. Many early retirees qualify for enhanced subsidies that make a Silver ACA plan cost less than what they were paying at work.
The trick is coordinating your withdrawal strategy with your ACA subsidy tier. This is where a licensed agent working with your CPA can save you $10,000–$30,000+ in premiums between now and 65.
What we do for early retirees
- Modified Adjusted Gross Income (MAGI) planning — we work with your CPA/financial advisor to project the income level that maximizes your subsidy.
- ACA plan comparison — with an emphasis on the specialists and prescriptions retirees actually use.
- Health-share alternatives — if you're healthy and open to non-insurance options, these can run $300–$500/month for a couple.
- Medicare transition planning — 6 months before you turn 65, we build your Medicare enrollment plan so you don't get hit with lifetime penalties.
- Spouse-only coverage strategies — if one spouse is Medicare-eligible and the other isn't, we handle both sides.
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What Real Clients Say
"I recommend John cause he works hard to get you the best plan and one you can afford. I've been with him for about 2 years now. Very pleased."
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Frequently Asked Questions
Can I get health insurance if I retire before 65?
Yes. The ACA marketplace guarantees coverage regardless of pre-existing conditions, and most early retirees qualify for premium subsidies because their reported income drops after retirement. Other options include private off-exchange plans, spousal employer plans, and health-sharing ministries.
How do I get health insurance between retirement and Medicare?
The three main paths are: (1) an ACA marketplace plan with income-based subsidies, (2) COBRA from your previous employer (usually the most expensive), or (3) a health-sharing ministry program if you're healthy and comfortable with non-insurance coverage. We compare all three based on your health and finances.
Do IRA withdrawals count as income for ACA subsidies?
Yes — traditional IRA and 401(k) withdrawals count as taxable income (MAGI) for ACA subsidy calculations. Roth IRA withdrawals typically don't. This is why early retirees benefit from having both traditional and Roth accounts — you can strategically pull from Roth to keep MAGI low and preserve subsidies.
What happens to my ACA plan when I turn 65?
You should enroll in Medicare during your Initial Enrollment Period, which starts 3 months before your 65th birthday month. If you don't, you'll lose your ACA subsidy and can face lifetime Medicare Part B late-enrollment penalties. We help clients transition seamlessly, usually starting the planning 6 months out.