Health Insurance in Early Retirement: FIRE's Missing Piece
Health insurance is the question that stops most early-retirement plans cold. Here's how people actually cover it before Medicare, and how to budget for it.
Ask anyone why they can't retire early and "health insurance" comes up fast. In the US, employer coverage usually disappears with the job, and Medicare doesn't start until 65. Bridging that gap is very solvable, but only if you plan for it. (US-focused education, not personal advice.)
The main ways people bridge the gap
- ACA marketplace plans. The most common route. Premiums are based on your taxable income, so early retirees living partly off savings often qualify for sizable subsidies.
- A spouse's plan. If a partner still works, joining their coverage is often the simplest option.
- COBRA. Continues your employer plan for a limited time: a useful short bridge, but you pay the full premium.
- Part-time work ("Barista FIRE"). Some jobs offer benefits at modest hours, covering insurance while you semi-retire.
The income lever most people miss
Because ACA subsidies key off taxable income, how you draw your money matters. Living partly from cash or Roth withdrawals can keep taxable income (and therefore premiums) lower. This is where Roth vs. Traditional planning pays off.
Budget for it honestly
Get a real quote for your age and zip code before you set your number. Then add that premium, plus a buffer for deductibles, to your annual spending so your plan reflects reality.
Fold it into your number
Health coverage is just another line in your retirement budget; once it's in there, the fear fades. Add it to your spending and re-run your timeline with the Coast FIRE calculator.
Try it on your own numbers
See when your money sets you free. Free account required, no credit card.
Want the full system?
Build Real Wealth turns these ideas into a step-by-step plan, with interactive tools and a clear path from where you are to where you want to be.