You’ve spent years preparing for this moment – retirement. But with all the joys and freedom that come with this new chapter in your life, there may be one thing you overlooked in your planning: health care costs.
While you likely have many options for retirement, shopping for a plan that meets your coverage needs and budget can be challenging. But with the right information, you can start the transition from working full-time to relaxing in a way that works for you.
Exploring Health Plans for Retirement
Before the Affordable Care Act, retiring before 65 could be a big risk, especially if you didn’t have access to employer-sponsored retiree health benefits. Today, early retirees have more options than ever.
Depending on your circumstances, you might decide to continue working in a job that offers health coverage until you’re eligible for Medicare or choose to take a part-time job with no benefits at all until you’re ready to transition to full retirement. Another option is to ask your current employer about continuing your coverage under COBRA View details, if allowed. This is typically a more expensive option than self-purchasing an individual insurance policy through the health insurance marketplace, but it may be worth considering for those with pre-existing conditions or limited finances who would otherwise not have access to private health insurance coverage.
You might also choose to purchase an individual insurance policy, either through the marketplace or directly from a private insurer. You might be able to qualify for a premium tax credit that can help reduce the cost of your monthly premium, depending on your income and household size.
In addition to your private insurance, you might consider Medicaid, the federal-state public health insurance program for people with low incomes. Each state has its own program, with differing eligibility criteria based on your household income.
No matter what you decide, it’s important to shop around and compare prices before making a decision. In particular, you should make sure your doctor and hospital networks are within the network of the plan you’re considering so that you can save money on out-of-pocket expenses.
You’ll have to weigh the pros and cons of each choice carefully, but if you prepare well, you can begin your retirement with confidence knowing that you’re financially protected for all the health challenges and opportunities that lay ahead. Your TIAA advisor can help you make the best decisions as you plan your retirement. Learn more about what to expect in retirement and how to plan for health care costs by scheduling a call with an advisor. You can also find a local advisor near you.