The Pre-Medicare Health Insurance Bogeyman isn’t Real.

Okay, he is real, but maybe not for you, especially if you live in a state like New York or Massachusetts.

According to the Federal reserve 47% of retirees picked their date because they reached the “normal” retirement age. So if this is you are not alone, but it doesn’t need to be this way.

Over the years, I've met with a lot of people who dream of retiring before 65. Many folks assume they'd be in for a drastic lifestyle shock if they pulled the trigger early, but honestly, many are more prepared than they think. There are just a few things holding them back—and if you're reading this, I'd encourage you to really give them some thought.

The Healthcare Hurdle

The biggest one I see is a real unwillingness to pay for health insurance prior to Medicare. This makes sense, for most of their careers, people have had a large portion of their healthcare costs covered as part of their employment. So, stepping away and facing that bill alone is daunting.

Now, with that said, it's not always an astronomical cost. If you’re already in a good position to retire before 65, it means you're likely a really good saver. You probably max out your retirement plans at work, you probably have a significant amount of cash, and you're sitting here with a good amount of investments in brokerage accounts.

In that event, you can have some control over your income. You can still live a comfortable lifestyle but not generate a lot of taxable income. And here's the key: there are credits for health insurance based on income.

Recently, through "the big beautiful bill," the income allowed for these Federal Tax credits has shrunk dramatically, from 400% of the Federal Poverty level to “just” 100%. In real dollars that is down from $84,600 in 2025 to $21,150. There are talks for it to go back to where it was but for now we must plan with the information we have. CORRECTION: Starting in 2026 the change is to the Advanced Premium Credits that passed under the Biden years. For 2026 the income limit is still $84,600 however if you earn $84,601 you would lose all tax credits rather than being phased out. That would mean just $1 of additional income could mean thousands and even tens of thousands in lost savings. This makes income planning in early retirement critical. But it is still very possible for somebody with millions in investments, to live the life they absolutely want to live and not generate the income that would disqualify them for these credits. So don't assume that the expense has to be astronomical right from the start.

The state in which you live also matters. States like New York and Massachusetts offer their own subsidies and each have their own calculators to help you see if you could qualify. The fear of health insurance costs could be overblown, depending on where your income falls you could get significant monthly and annual savings.

In Massachusetts married couples with up to $84,600 (EDIT this is the same as the Federal Limit) in income (MAGI to be specific) could qualify for health insurance with monthly premiums as low as $235 per month each via Massachusetts Health Connector Plans. Premiums could be as low as $0 depending on income. 

In New York, under the essentials plans Individuals ages 10-64 can qualify for monthly premiums of $0 and no deductibles with incomes up to $39,125 and couples up to $52,875. You can’t have access to employer coverage, Medicare, or other coverage to qualify.

Assets DON’T equal income. Smart planning could allow you to spend much more than the income limits above, so you can enjoy the early years of retirement while not generating the income that would exclude you from discounted health insurance costs.

The Cost of Waiting

But even if it is high, what's the real cost?

Let's say you have a pension that starts when you retire, and most of your money is in pre-tax accounts. You're going to have to take money out, live the life you want, and that's going to push you past the ideal income number for credits. But if you're able to pay it comfortably, say, you're able to retire at 62 instead of 65 how much could that extra 3 years be worth to you? That’s the question.

We have to ask: what are you keeping all this money for?

If health insurance wasn't a complication, you'd be retired tomorrow. You’ve done the planning, you’ve done the work, and you know you can afford it. If the healthcare bill is the only thing standing in your way, and you can afford the healthcare bill... what are you waiting for?

Now, there are plenty of good reasons to continue to work: you enjoy your work, your friends are still working, and you’re not exactly sure what you would do with the extra time. And the fact that you have to pay extra for health insurance is a completely reasonable factor.

But what if you've got grandkids around? What if your friends are retiring, and you're not able to participate in some of the things you want to? What if you're saying "no" to things because of work, and you could otherwise afford to be retired?

What good is having many times a surplus of your needs in your investment accounts if it's not going to get used?

Time is the Real Currency

For many people, leaving a legacy is really important, and I have a lot of appreciation for that. But spending more time with the grandkids? That is part of that legacy.

As somebody who myself has a young baby and another on the way, I see my daughter light up when she sees her grandparents. The ability to scale back work or flat-out retire sooner is okay, even if that means less inheritance down the road. There’s just no replacement for time.

The one thing money can't buy, a time machine, but it can buy us time in the future.

I really want to challenge people who are good savers because it can be hard to flip that switch to using your money. I think that's probably the bigger deal here; it's really hard to spend. But what is the cost of not spending? What is that time you won’t get back worth?

Again, I’m not talking to you if you enjoy your work or aren't sure how you'd spend your time. But if you’re saying, "I'd be retired today if it weren't for this healthcare cost," and then it turns out you can afford it, or that you might not have to pay as much as you think... what then?

It's Just an Expense

This healthcare expense is significant, but it doesn't have to be a nightmare. While it's not fun to spend money on health insurance and it's a lot more fun to spend it on your grandkids or traveling or doing the thing you've been looking forward to your whole life, as far as your money goes, it's all the same. It's no different than going on vacation. It’s about what that time is worth to you.

I just think there are no real rules in life. Most people retire because they're 65, and I don't think that needs to be the case. We don't need to rule our lives by whatever everyone else does. We can do what we want, and that's a beautiful thing.

The information in this blog is the opinion of Nathan Tomkiewicz and does not reflect the views of any other person or entity unless specified. The information provided is believed to be  reliable and obtained from reliable sources, but no liability is accepted for inaccuracies. The information provided is for informational purposes and should not be construed as advice. Advisory services offered through Tomkiewicz Wealth Management, LLC, an investment adviser registered with the State of New York and Massachusetts.