22 Aug How Does Retiring Early Affect My Medicare Benefits?
If you decide to retire before you turn 65, you may face a gap between having health insurance coverage through your employer and the time at which you are eligible for Medicare, which means it’s even more important to incorporate health care into your financial planning.
Even though you can take other retirement benefits such as Social Security early, you generally have to wait to turn 65 for Medicare eligibility. This criterion applies to married couples—if one spouse turns 65 and receives Medicare, a younger spouse generally is still not eligible. You can get a better idea of your eligibility and expected premiums on the Medicare website.
In addition to considering Medicare if you enter early retirement, your financial plan should also look at other retirement benefits such as Social Security. If you retire at 62, for example, and take Social Security early, you will receive reduced benefits to account for the longer amount of time you receive Social Security payments.
As a financial advisor in the Sacramento, CA, area, we’ve helped many clients incorporate Social Security and Medicare into their retirement plans. If you’re interested in early retirement, together we can look at your available resources such as retirement accounts and decide on the health insurance that works best for your financial situation until you turn 65 and become eligible for Medicare.
Once you receive Medicare, the cost of your health care generally goes down, but you still may need supplemental insurance depending on your personal circumstances.
Factoring these costs into your retirement plan can help you decide whether early retirement is feasible for you, and if not, you can figure out what you need to do to position your finances to be able to retire comfortably a bit later. That may mean waiting to reach the full retirement age to receive maximum Social Security benefits, which is age 67 for those born in 1960 and later, or waiting until age 70 to receive the maximum amount possible.
Schedule a complimentary, 15-minute call with a fee-only financial advisor today to discuss your personal situation.
Parkshore Wealth Management is a family-owned, independent, fee-only Registered Investment Advisor serving the greater Sacramento area with an office in Roseville, CA. We partner with financially responsible individuals and families who are eager to take positive steps that will allow them to use their money to build the life they desire. The firm is led by Harold Anderson, CFP®, and Daniel Andersen, CFP®, both members of NAPFA, the country’s leading professional association of fee-only financial advisors.