For Mark Roberts’ Use: We all have our own target retirement age, but for most of us it’s around age 65 or a bit later. Even so, sometimes things don’t quite work out the way we had intended. Currently, seven out of ten retirees actually stopped working before their 65th birthday. In some cases this decision was premeditated and intentional, but in many other cases an early retirement was forced by illness or disability. Even a poor job market can encourage us to retire a little earlier.

Of course, you should make sure you have enough retirement income to last the rest of your life, before retiring early. But there is one other important consideration: Since you’re not eligible for Medicare until you turn 65, how will you cover the cost of healthcare?

In the past, most large companies provided healthcare benefits to their retirees but with the cost of health insurance skyrocketing, many businesses are making the tough decision to cut those benefits. Less than half of US companies offer retiree healthcare now, and those numbers are dwindling year by year. Even among the retiree health packages that remain, benefits vary widely, with some early retirees paying considerable expenses out of pocket.

So, if you need to retire early, what will you do? One option is to shop for your own health insurance policy independently. Depending where you live (and your state of health) your premiums and other expenses could vary wildly. If you take this route, assume that premiums will rise each year, and make a plan to cover them until you turn 65 and can access Medicare.

Healthcare is just one of the issues facing those who retire early, but it could very well be the most expensive. Plan carefully before making the leap into retirement, and remember to call us with any questions. Together we can review your plan and decide whether an early retirement is feasible for you.