Guest blogger Nichole Coyle, CERTIFIED FINANCIAL PLANNER™, talks about the different options you have if you are retiring early due to the Covid-19 pandemic.
Whether you were laid off, furloughed, owned a business, your company downsized or shut down, or you decided it wasn’t worth risking your health, millions of Americans have had significant changes like these to their employment as a result of the Coronavirus. If you are close to or already at retirement age you may be thinking this is a natural time to retire. But, what are all your options?
Retiring Early on Social Security
Anyone born 1960 or later, can begin collecting full social security benefits at the age of 67. However, you can begin collecting reduced benefits at the age of 62. Keep in that any time you begin collecting your benefits early, you will receive a permanently reduced payout. The reduction will depend on your age and the year you were born. Choosing to collect social security benefits early may make sense, depending on your specific financial situation. It’s a good idea to consult with a financial advisor to help you decide on the best option for you.
What to do about Health Insurance
If you happen to be 65 or older, you’ll be able to apply for Medicare as well as a Medicare supplement plan. However, if you haven’t reached 65 yet, you have a few healthcare options.
- 1. You can find individual and family options through the Affordable Care Act (ACA) marketplace, including dental and vision. There are a variety of options, which include different tiers of coverage and deductibles. There are also various plans offered depending on where you live. These plans typically only enroll once per year; however, you would qualify for a special enrollment period because of the change in your employment status (You have 60 days from your change in employment to apply).
- 2. You may be eligible for a COBRA (Consolidated Omnibus Budget Reconciliation Act) plan. These plans allow you to continue the group health insurance coverage you had through your employer. These plans only last for 18-36 months and can be expensive because you pay both your and the employer’s portion of the premium. Just like the ACA plans, you also have 60 days to apply for a COBRA plan.
- 3. You may be able to join your spouse’s insurance plan. If you have a spouse who is still working, they may be able to add you to their group plan because your qualifying event opens up a special enrollment period. Typically group plans allow 60 days from your qualifying event to make changes to the employee’s plan.
Talk to a Financial Professional
If you decide to retire sooner than you initially planned, it’s a good idea to consult a professional. A financial planner can help guide you through all these new decisions. There are many factors to consider when retiring early, and especially retiring unexpectedly. A financial professional can help you sort through multiple income streams like a pension plan, social security, retirement savings, and possibly a side job or new employment. They can also help guide you through related areas like debt management, health insurance, and possible lifestyle changes.
I would love to discuss navigating significant life changes and offering advice and resources on income planning, health insurance, life insurance, social security, Medicare, and supplements and help you with the overall vision and plan for your future. If you have recently experienced a change in employment or are considering retiring early, don’t hesitate to contact me!
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Nichole M. Coyle
CERTIFIED FINANCIAL PLANNER™
20333 Emerald Pkwy
Cleveland, OH 44135
Securities and advisory services offered through Cetera Advisor Networks LLC, member FINRA/SIPC, a Broker-Dealer, and a Registered Investment Advisor. Cetera is not affiliated with the financial institution where investment services are offered or any other named entity. Investments are: Not FDIC/NCUSIF insured * May lose value * Not financial institution guaranteed * Not a deposit * Not insured by a federal government agency.