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Do I Have To Change My Health Insurance When I Retire?

Presented by Sean Cook, CFP®, AIF®

Jan 22, 2019 2:57:06 PM

Health is the #1 ingredient for a happy retirement. And healthcare options for people approaching retirement can be confusing. This is especially true for those who are not yet ready to apply for Medicare. There are a lot of moving parts with the health insurance decision when you are about to retire. 

Healthcare and Retirement

To make it easier, below is a downloadable flowchart to help answer the question “Will Healthcare Change As I Transition Into Retirement?”

It covers common health insurance isssues for people nearing retirement and figuring out their options:
• Medicare consideration
• Expected retirement age
• COBRA coverage
• HSA coordination
• Employer-sponsored health plan options
• Impact if your employer has less than 20 employees

Healthcare Flowchart 2019 will-healthcare-change-as-i-transition-into-retirement-2019.pdf

Take the example of Neil, who is 63 now and looking ahead to retiring later this year. He is married, and works for a company in suburban Philadelphia, Pennsylvania with 35 employees. Neil has heard that he won’t be eligible for Medicare if he retires soon. What are his options?

In this case, Neil will be eligible for 18 months of coverage under COBRA. But this may be expensive, so he may wish to compare that cost with that of a plan through the Health Insurance Marketplace. In either case, he is looking to maintain good coverage for a relatively short time, to bridge the period until he is eligible to enroll in Medicare.

Health coverage is one of many areas to consider as you create a secure retirement. Some others include shifting from accumulation to income, social security optimization, handling sequence of returns risk, and tax and income integration with 401(k)s, IRAs, Pensions, etc.

Most importantly, what will you be doing and what do you want your weeks to come to look like? A professional can help you save time and make the most of opportunities as you write your next chapter.


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Topics: Financial Planning, Retirement Planning, Healthcare

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