Healthcare and Medicare
Healthcare is the piece that keeps capable people working longer than they'd like. It doesn't have to. There's a bridge if you retire before 65, an enrollment window at 65, and premiums you can plan for years ahead.
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When someone tells me they'd like to retire but can't yet, the obstacle is often not the portfolio. It's health insurance. Employer coverage has been in the background of every paycheck for decades, and replacing it on your own sounds harder than it turns out to be.
The healthcare side of retirement has two chapters. Before 65, you may need a bridge until Medicare begins. From 65 on, the questions change: enrolling on time, choosing coverage, and managing the income that sets your premiums two years later. Both chapters reward being planned a year or two ahead, and neither requires you to become an insurance expert. That's what I'm for.
Medicare eligibility begins at 65, with an initial enrollment window that spans the three months before your birthday month, the month itself, and the three months after. Missing that window without other qualifying coverage can mean late-enrollment penalties that stay with you, so we put the dates on the calendar well ahead of time.
If you're working at 65 with employer coverage, you may be able to delay parts of Medicare without penalty and enroll later through a special enrollment period when that coverage ends. Whether that applies depends on the size and rules of your employer's plan, so we confirm it before your birthday rather than untangle it after.
IRMAA is a surcharge added to Medicare premiums when your income passes certain thresholds. Two features make it worth planning around: it looks at your income from two years earlier, and it works as a cliff, where one dollar over a threshold raises premiums for the entire year.
That two-year lookback means the income you report at 63 helps set the premiums you pay at 65. Roth conversions, large capital gains, and the order you draw from accounts all feed into it, so planning your income is, in a practical sense, planning your premiums. And if your income drops because of a life event like retiring, you can ask Social Security to use the newer, lower figure instead.
With one of three bridges: COBRA continuation of your employer plan, an ACA marketplace plan, or coverage through a spouse who is still working. Each carries different costs, networks, and time limits, and the best one often changes as the gap shrinks. We map the bridge before you set the date, not after.
The table below compares the three. They also combine well: COBRA for the first stretch, then a marketplace plan once it runs out, is a common pattern for longer gaps.
A health savings account keeps its tax benefits for life. Contributions must stop once you enroll in Medicare, but the balance stays yours, grows untaxed, and can be spent tax-free on qualified medical costs in retirement, including many Medicare premiums. In the years before 65, it's a strong place to build your healthcare cushion.
If you retire before 65, one of these usually carries you to Medicare. The right choice depends on the length of your gap, your health, and your income plan.
| Bridge | How it works | Often fits when | Worth knowing |
|---|---|---|---|
| COBRA | Continues your exact employer plan, usually for up to 18 months, with you paying the full premium plus a small administrative charge. | You're within about a year and a half of 65, mid-treatment, or want to keep your current doctors and deductible progress. | Familiar coverage, but often the most expensive option because the employer subsidy is gone. |
| Marketplace plan | You buy an individual plan through the ACA marketplace, with subsidies that depend on the income you report. | The gap is longer than COBRA can cover, or your planned retirement income is modest enough for meaningful subsidies. | Because subsidies follow income, the same withdrawal planning that manages your taxes can also lower your premiums. |
| Spouse's employer plan | You join your working spouse's coverage, with your retirement typically counting as a qualifying life event. | Your spouse plans to keep working until you're both near 65, and their plan covers spouses at a reasonable cost. | Often the simplest and least expensive bridge; the spousal premium and network still deserve a close look. |
Jesse Plunkett, CEPA®, CRPC®
Financial advisor in Sanford, FL, serving clients across the country virtually. Meet your advisor, or check my record on 
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A quick, useful starting point
A quick self-check. Retirees tend to assume the worst about their own situation more often than the numbers actually support. This helps you see where you actually stand.
A short, low-key call. We start with your target retirement date and the coverage you have today, and go from there.
Your initial enrollment period is a seven-month window around your 65th birthday: the three months before your birthday month, the month itself, and the three months after. Enrolling on time avoids late penalties that can raise premiums permanently. If you're still working with employer coverage at 65, different rules may let you delay parts of Medicare without penalty.
IRMAA is an income-based surcharge on Medicare premiums. If your income from two years ago passed certain thresholds, you pay more for Parts B and D this year. It works as a cliff rather than a slope, so one dollar over a line raises premiums for the whole year. That structure makes income timing worth planning in advance.
If you retire before 65, covering the gap usually means COBRA, a marketplace plan, or a spouse's employer coverage, each with different costs and trade-offs. This is worth mapping out before you set a retirement date, not after. We walk through the options that fit your timeline, and a longer gap often combines more than one of them.
They can. Roth conversions count as income in the year you convert, and Medicare premium surcharges (IRMAA) are based on your income from two years earlier, so a large conversion can trigger a temporary premium increase. We weigh that cost against the long-term tax benefit before recommending a conversion amount, and time conversions with the lookback in mind.
Yes. Contributions have to stop once you enroll in Medicare, but the money already in the account stays yours, keeps growing tax-free, and can be spent tax-free on qualified medical expenses at any age, including many Medicare premiums. For a lot of retirees it becomes the plan's dedicated healthcare pocket.
Almost always. Everything is handled virtually, so where you live is rarely a barrier. The only exception is a handful of states where I'm not registered yet, and if that's you, I'll tell you on our first call.