Updated: May 9
Early retirement is a wonderful goal, but it requires extra-careful planning to avoid running out of money. You don’t want to be without the insurance you got from your employer, either.
These tips can help you retire early without jeopardizing your health or finances.
The Consolidated Omnibus Budget Reconciliation Act (COBRA) requires group health plans to offer continued coverage under some circumstances. However, your employer won’t share the policy costs when you retire, so the premiums will likely be much higher than when you were employed.
Anticipating these costs (and considering your alternatives, like a Healthcare.gov plan) can help you plan your post-retirement budget until you’re Medicare eligible.
When you leave your job, you may be able to convert your group coverage to individual coverage. If not, you may want to purchase an individual policy.
Even with preexisting conditions, policies may be more affordable than you think. Maintaining life insurance in retirement can be a low-cost way to give your survivors a boost or leave a legacy.
You may be able to claim Social Security as early as age 62. However, experts often recommend waiting as long as possible to take this benefit. Learn about the different claiming strategies so you can make an informed decision.
You may be able to tap retirement account funds before age 59½ without incurring the 10% early withdrawal tax — for example, by taking substantially equal periodic payments. Ongoing management of your retirement portfolio is key to make sure your assets will support you for decades.
If someone you know is exploring the idea of early retirement, you may be able to help them by sharing this newsletter. And feel free to let us know if you have any questions about your life or health insurance policy.