musicislife wrote: Mon May 26, 2025 8:13 am
Hello Bogleheads, wanted some guidance on the “when to retire” question. (Age: M=59, DW=59)After getting advice from this forum a couple of years back (thanks!), I rejigged some finances and spent some time modeling on Pralana.
Reasonably confident we are around 35X even without SS, so financially independent for sure. I convinced my wife to retire in April of last year and have been part-time myself for the past year or so.
Now to the next step – considering when I should also take the plunge fully from a healthcare perspective.
Questions:
1. We can get COBRA for 18 months. Is there a “best practice” on getting COBRA, then going on ACA for the pre-Medicare period?
2. The ACA plans without subsidies for my area seem to run between $1800-$2700 monthly for us. OOPM = $11,000-$18,000. This is a sharp increase from when I checked a year ago. Typical?
3. What is an optimum month to retire from a COBRA/ACA perspective, if there is such a thing?
4. How do early retirees handle health insurance when travelling out of your area? ACA seems to cover nothing but the first emergency trip into the hospital. Travel insurance?
5. Probably veers into crystal ball gazing but any pointers to whether the ACA subsidies are likely to continue? I’m planning to try and model a full price ACA plan in Pralana just to verify.
Thanks for any and all advice!
to op:
DW and I were in a similar situation that, though always different situations and perspectives, might be helpful for you.
FIRE age 58. No pension. No paid health insurance. No early SS (etc). Portfolio: 50x+
1. We did the same thing as you suggest. Cobra > ACA > Medicare (original) part F.
to OP: you have to calculate; coverage, premium costs, plan specifics, OOP costs, current and projected health status and annual costs including “black swan/perfect storm” health events.
2. Not sure what is “typical”. While for some/many ACA premiums and coverage work well, for others (us in our area at the time with zero options), neither “Affordable” nor financially/coverage “Caring”.
The “subsidy” cliff and penalties were in full effect, for us, then.
3. We did extensive research and the “system” (both ACA and Cobra) did best when coordinated timewise. You can check what is best for you.
4. Travel considerations: Not in play from our perspective when we retired (FIRE).
5. future unknown
(dislaimer: every person is different)
A. For us: health insurance costs and health care expenses from FIRE age 58 until Medicare Original were crushing. Both Cobra and ACA coverages were poor, premiums were very high. Because of health issues (for us only), OOP (out of pocket) costs during this period were astronomical and crushing.
B. To OP: Unless you can guarantee continued great health and minimal health care OOP costs, it might be a more “known” financial situation is you retire at age 65, or have your financials, etc, solidly secure during this gap period (re health insurance).
(dislaimer: for many/most/some, 33x at age 59 (op) vs 25x or less, is a “gamechanger”. For others, not so.)
C. To OP: Are your income streams diversified and substantive after you “retire” (no longer an employee)?
I hope this is helpful for you.
j
