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PERSONAL FINANCIAL PLANNING

Funding health care

when retiring before

Medicare

Clients who dream of retiring early

have various health insurance options
for the gap years.

By Kelley C. Long, CPA/PFS

hen CPA financial planners ask clients to the University of Michigan’s National Poll
who are otherwise financially prepared for on Healthy Aging, roughly 11% of adults ages
Wretirement when the clients plan to retire, 50–64 have delayed or considered delaying re-
they often hear that health insurance coverage is tirement specifically to have employer-provided
the deciding factor. Many clients, particularly those health insurance. And a Forbes Advisor survey
who’ve spent their working years with employers found that 20% of people with health insur-
where benefits are a valuable part of compensation, ance through their employer chose to work full
believe that until they are eligible for Medicare, time rather than part time to get those benefits.
they must continue working to remain covered by It’s also quite common to encounter a couple
health insurance. where one spouse is retired while the other
Many clients in this situation, when asked, admit continues working almost exclusively for access
that they haven’t really explored alternative health to employer-provided health insurance.
insurance options. They may balk at the suggestion Yet, options for funding health care costs do
of choosing health insurance provided via COBRA, exist that clients who dream of retiring before
for instance, because they see the price tag of the Medicare eligibility may not have explored. But
coverage as astronomical. Or clients may have only first they may need to adopt a new perspective.
priced plans that are similar to those provided by
their employer, typically the gold or silver plans SHIFTING YOUR CLIENTS’ MINDSET ABOUT
on the Affordable Care Act (ACA) marketplace, HEALTH INSURANCE About the
and found those to be unaffordable. And they may Helping clients successfully plan for health care author
not know how to navigate access to other health coverage until Medicare requires a strategic Kelley C. Long,
insurance options, so they neglect to explore choices funding plan but also, in some cases, a shift in CPA/PFS, CFP, is a
that might be more affordable — albeit offering less their thinking around health insurance. personal financial
coverage — when they do research insurance. Many people believe that they need robust coach in Arizona.
While the average age of retirement in the health insurance coverage to feel financially
United States today is 61, millions of people secure. But is this true?
remain in the workforce beyond the point of Granted, the fears many people have around
financial retirement readiness, strictly to access health care funding are valid — everyone has
employer-provided health insurance until their heard horror stories of families left bankrupt
Medicare eligibility begins at age 65. According due to medical bills. A quick search of

journalofaccountancy.com April 2023 | 15