One roadblock that keeps many people from retiring early is the burden of health care expenses before Medicare. While there is certainly reason to be concerned, there are several strategies you can use to mitigate these costs. I will address two of them.
#1 – Be selective. For the first time in a while, you likely have the option of what plan you need (not what your company needs). If you are in good health, you may choose a plan that has a large deductible but low monthly premium. If this is the case, you set aside your deductible in savings in case health care is needed but choose a plan with a lower monthly premium that otherwise is more cost effective.
# 2 – Lower taxable income. Plans under the Affordable Care Act are based on income, not assets. If you are retiring early and living on cash and/or non-retirement investments, you may be able to keep your premiums low by managing your tax liability well.
Disclaimer: Alex Voorhees and Reston Wealth Management do not provide health insurance, legal, accounting or tax advice. This information is not intended to be a substitute for specific individualized health insurance, tax or legal advice. We suggest that you discuss your specific situation with a qualified insurance, tax or legal advisor. The opinions voiced in this article are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) or strategies may be appropriate for you, consult your financial advisor prior to investing. No strategy assures success or protects against loss.