Retiring Without Dependents
Our first case study is a 55-year-old widower with no dependents. He has Type 1 diabetes and a stent placed in his heart a few years ago, so maintaining access to care is important.
The Affordable Care Act is a political lightning rod, but most Americans agree that one of the silver linings in the legislation is that there are more health insurance options than ever before for people with pre-existing conditions like our client.
If a client is retiring early, it’s likely their income is too high to qualify for a subsidy to help pay for coverage on the ACA marketplaces. But even though these consumers will pay full sticker price for their monthly premiums—and they can be high—with careful planning, these costs can be built into analyses when it comes to the early retirement decision.
Let’s say the client is retiring and moving to Naples, Florida this year. He’d be able to get a health plan for about $600 per month with a maximum financial exposure, including the deductible and out-of-pocket maximum, of $7,350.
Clients like this one might expect to pay between $72,000 and $120,000 on health care in the 10 years before they retire.
One thing to look out for when evaluating health plans is that many options on the individual market won't cover doctors or hospitals outside the established network. In other words, if a client is diagnosed with cancer and wants to go to MD Anderson, it’s possible he won’t have any coverage at all.
These plans still provide access to care, but clients will have to pay attention to where they receive it if they want insurance to help pay for it.
Retiring With Dependents
A 63-year-old is planning to retire early but is concerned about coverage for his 60-year-old wife and their 24-year-old adult child. The client and his wife are pretty healthy, but the 24-year-old has been recently treated for substance abuse in the last 24 months.