Healthcare

Early retirees may benefit from Obamacare

If you are retiring before age 65, you are eligible for a Obamacare marketplace plan even if you have employer retiree coverage available.

hand_rubbing_two_cents_lg_nwmWhy would anyone want to give up employer coverage? It’s possible that with a lower retirement income you may be eligible for tax credits which could lower you premium costs  below what you pay for employer coverage, even if the employer contributes toward the cost of coverage.

Something to consider in any case.

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12 replies »

  1. Question for BenefitJack who writes: “Similarly, while Part B and Part D are funded by general revenue taxes, your delay in commencement means that less taxpayer dollars were spent – because while working after reaching age 65, taxpayers did not incur cost for your physician and Rx coverage. ”

    Question: What portion of Part B and Part D total expenses are financed by general revenue taxes and what portion are financed by the individual recipient?

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  2. The last of the baby boom generation (those born between 1946 to 1964) turns 65 in 2029, twelve years from now. Unfortunately, many of them are not going to have much of a retirement. The current president does not seem inclined, as the past president, in attempting to come to long range solutions to Social Security. Baby boomers who are not retired have very little time to arrange their dwindling earning years to save up for what will likely be a fairly long retirement.

    Medical care expenses will continue to climb. Someday, not soon, the retirement age will be raised. Our grandchildren are likely to work to 70. I think we all know these things, but it’s not considered polite to acknowledge them. As Americans, we are supposed to be, assumed to be, optimistic about the future.

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  3. Linda, I am not clear on the “what” and “why” you want free.

    Are you talking about Obamacare or Medicare?

    Do you want free because you are on social security, because you are working only part-time, or because of your small income? What do we do will people with no medicare insurance, turn them away from the hospitals when they are 85 years old?

    For the record, I do understand that there are many people who cannot afford $400 a month both young and old. I have been trying to figure out how my son and grandson are going to retire now that pensions are a thing of the past. In order to have $400 a month you would have to have saved $120,000 and withdraw at a rate of 4% in today’s dollars and who knows what that figure will be in 40 years.

    In order to save $120,000 you would need to contribute the current max contribution of $5,500 for about 16 years assuming 8% return and the last 15 years the DJ has only returned 6.5%. If you cannot afford $400 a month now for medical coverage, I highly doubt anyone can afford $400 for medical premiums (not counting deductibles and co-pays) and an extra $458 month to put their IRA to get the max contribution limit per year.

    In 1981 when I first started working full-time the limit was $2500 toward an IRA and I only made $9,326. If they did not raise the limits, I would not have enough money either.

    Retirements has since changed 1981, there are very few left. The market rules have changed. The cost of medical care has skyrocketed.

    Yes, I know that currently there is a catch-up amount of $6500 after age 50, because I am taking advantage of that but not everybody can. But I also see if you need $120k saved just for medical premiums, how much more do you need to save for drugs, housing, food, utilities, etc. and how do you do that when 62.4% of Americans make less than $50k?

    I do not think that medical should be free. I do not think that I should be taxed to provide medical to somebody else. Why should I be taxed for working hard and somebody else doesn’t get taxed for working hard? I also think that my grandson will not get to retire.

    I am looking for the 50 year solution here because I am starting to believe that anybody over 40 might not have enough working years left to save the growing amount of money required to retire. It may be too late for my son. What do I tell my grandson, that you will work until you are 70 and don’t be one of the 62% making less than $50K? I got the live modesty part down already and I am an example of that. But what do we tell our children?

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    • But if you started saving at age 25 you only need to save $55 a month to have over $120,000 at age 65 at 6.5% annual return. Saving $200 a month gets you almost half a million at age 65.

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      • Agreed, but at a 4% withdraw rate that will give you $1,667 dollars a month (in todays dollars). In this day and age you may still be able to find a way to live on that income. However $400 for medical premiums (not counting deductibles and co-pays) would be 24% of your IRA. Today in my area rents are commonly $1200 to $1500 for a nice place which means you would have to find a not so nice place or hope you can get in a income based senior citizen rental. Then there is food and utilities. Yes it can be done.

        I also agree one should try to live modestly and save anything you can to as much as you can for retirement. You really should not count on social security and social security IS NOT A RETIREMENT PENSION.

        With the middle class losing ground and some say that wages have been flat the past 20 years and others say it goes back to the 1970’s, I am starting to believe that math will not add up 40 years from now. As more and more retire without pensions the learning must be share to those who have time left to save.

        It used to be that you only needed 60 to 80% of your pre-retirement income to maintain the same standard of living in retirement. Now some people say you need 80 to 100% and all this has to be done with out pensions.

        I was taught the retirement income planning was a three legged stool; Social security, pension, personal savings such as IRAs and stock investments. This was only in the last few years too. I now only see two legs to that stool. So that is why I am looking for answers because my grandson retirement will be much, much different than mine.

        Tattoos or no tattoos at age 25, a 25 year old with a family will notice $55 a month or more like $110 since both the husband and wife need to save. My first major pay raise with my new family was getting off formula and the second was diapers. And why does a baby’s shoes cost more than my size 13s?

        And don’t forget to save for college to get that better wage.

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  4. The goal has to be LESS people receiving taxpayer subsidized coverage, regardless of age, and more paying into the trusts, again, regardless of age. The better answer is to lower the Medicare Part B and part D premiums to the extent an individual remains employed past age 65 and covered thru employment. We do it for SS benefits, why not Medicare?

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    • Confused on this one. I worked past 65 and stayed under employer coverage which is primary over Medicare a you know. No Medicare premium.

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      • Correct. You continued to pay into Medicare Part A – in the form of FICA-MED. And,you delayed commencement of Medicare Part B and Medicare Part D. So, you contributed to the Medicare trust fund for months or years after when coverage could have but did not start. Similarly, while Part B and Part D are funded by general revenue taxes, your delay in commencement means that less taxpayer dollars were spent – because while working after reaching age 65, taxpayers did not incur cost for your physician and Rx coverage. So, because you delayed commencement of medical coverage, I believe you should receive a financial credit towards the cost of Medicare Part B and Part D whenever you commenced Medicare coverage. If you were to pay $180 for Medicare Part B and Part D, you should be paying proportionately less.

        We do it for Social Security delayed commencement; we should do it for Medicare delayed commencement as well.

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  5. I had to take early Social Security retirement..due to financial issues. I work PT at this time but do not make that much..but yet..when I did apply for Obama care…i still had to pay?? That to me is wrong..I dont make much and I have bills and rent to pay..so I feel I should not have to pay any premiums. so I dont want to apply again.

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    • Did you have to pay full premium or were you still subsidized, if no subsidy you must earn more than you think. You I’ll have to pay for Medicare too by the way. About $400 a month with Part D and supplemental coverage.

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      • I dont understand why I have to pay at all..i only work PT..and they charge me..im not gettng very much on Social Security as it is..and then they take part of it?? they didnt mention subsidized…maybe u can afford to pay $400 a month for what u have.but i cannot..i can barely make it month to month..i think they need to leave up to the people..if they want medicare or not..not shove it down their throats…i rarely go to the doctor…i would rather find natural products..instead of putting chemicals in my body and making the doctors and drug companies richer..

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