How Much Does Private Healthcare Cost Before Medicare?

Retiring before 65 when Medicare begins can bring significant healthcare costs as early retirees are forced to find private healthcare plans.  

When considering premiums and out-of-pocket health care expenses, $1,000/month per person is typically a good estimate, although it varies by the type of plan selected.  

In general, I would expect these costs to be at least cut in half when a client goes on Medicare. On Medicare, I generally see monthly expenses totaling about $400/month for parts A, B, D, and a good supplemental plan to cover out-of-pocket costs.  

While high healthcare expenses might deter someone from retiring early, I think it’s worthwhile to consider whether or not you can afford it. For example, a pre-retiree couple that is 62 years old, might pay an extra $40,000 or so in healthcare expenses prior to 65 but it could allow them 3 more years to do what they love – and those 3 years are coming when they are in the best “retirement health” of their life!  

In addition, there are strategies to help reduce what you pay in premiums. I’ve seen many retirees with multi-million-dollar nest eggs qualify for partial subsidies since premiums are based on income and not assets, and income is typically very low for early retirees.  

Thank you for reading,

Alex

This blog post is not advice. Please read disclaimers.