Health Insurance Series
Health · Bridge to Medicare
Retiring Early —
How to Cover the Pre-65 Gap
Retiring at 62? You have three years until Medicare. Without an employer plan or a spouse's coverage, the gap can cost $1,000–$2,000/month per person. For a couple, that's $36K-$72K just in premiums before any care happens.
The pre-Medicare gap most early retirees underestimate
ACA marketplace plans for couples in their 60s commonly run $1,500-$2,500/month combined — pre-subsidy. Plan for this expense in your retirement budget BEFORE retiring early, or it can wreck the math.
Four bridge strategies
ACA marketplace + income management
Manage taxable income to maximize subsidy eligibility. Retirees have huge control — draw from taxable brokerage (capital gains rules), Roth (tax-free), or HSA (medical only). The right draw mix can keep you under subsidy thresholds and save tens of thousands.
Spouse stays working
If one spouse can keep working until 65 with employer coverage, the other rides along. Often the most practical path. Worth coordinating retirement dates around this.
COBRA for 18 months
Continues your employer plan after retirement. Expensive (full premium, no employer subsidy) — but seamless. Often a 12-18 month bridge to marketplace or Medicare.
Move to Medicaid-expansion state
Some early retirees relocate to Medicaid-expansion states where income-based eligibility is more accessible. Drastic, but real for some — especially when health is fine but income is low after retirement.
The subsidy-Roth synergy
Roth IRA withdrawals don't count as income for subsidy calculations. Retirees who built Roth balances during their working years can fund early retirement living expenses from Roth — keeping reported income low enough for maximum ACA subsidies. This can save $15K-$30K per year in health insurance costs alone.
Plan your pre-65 health coverage
We'll model your bridge years — what marketplace costs, where Roth + brokerage draws make sense, and how to transition cleanly to Medicare at 65.
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