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March 26, 2026 • 18 minutes
If you’re thinking about retiring at 62, health insurance is the expense giving you the most pause. Medicare doesn’t start until 65, which means three years of coverage you’ll need to figure out on your own, and full-price coverage at 62 is not cheap. If that hasn’t been built into your financial plan, it can push back a retirement date that was otherwise within reach.
In 2026, ACA rules let insurers charge a 62-year-old up to three times what a 21-year-old pays for the same plan. In many markets, that puts full-price benchmark Silver premiums at $1,000 a month or more before subsidies.
Here’s what health coverage costs in 2026, what changed with ACA subsidies, and how to plan around all of this so it doesn’t derail your early retirement date.
ACA rules cap age rating so that older adults can be charged no more than three times what a 21-year-old pays for the same individual-market plan. For a 62-year-old buying full-price coverage, that often pushes benchmark Silver premiums into the $1,000–$1,800+ per month range, depending on where you live.
What you pay in health costs at 62 in early retirement still depends on your coverage type, income, and location. The numbers below are 2026 figures and meant as directional benchmarks; your actual costs will vary.
Sources: KFF Health Insurance Marketplace Calculator (2026); KFF Employer Health Benefits Survey (2025); DOL COBRA guidelines.
ACA premiums at 62 are age-rated, so they run higher than what a 40-year-old pays for comparable coverage, and the difference is most visible when you don’t qualify for subsidies. To see what this looks like for your zip code, run your age, income, and family size through the KFF Health Insurance Marketplace Calculator; it uses current marketplace data for your county.
The enhanced premium tax credits that held down ACA costs from 2021 through 2025 expired at the end of 2025 and were not renewed for 2026 coverage. The subsidy cliff is back: if your 2026 household income is above 400% of the federal poverty level (roughly $62,600 for a single person using 2025 guidelines), you no longer qualify for premium tax credits.
Below that 400% FPL cutoff, subsidies still exist but are smaller than they were under the temporary enhancements, so your share of the benchmark premium is higher than in 2025 at the same income level. In states and rating areas where base premiums are high, a 62-year-old above the 400% FPL threshold can face $1,200–$1,800 or more per month for a benchmark Silver plan.
A California Health Care Foundation (CHCF) analysis of 2026 premium impacts found an example where a California consumer’s benchmark Silver premium jumped from around $554 to over $1,000 per month once enhanced subsidies ended, illustrating how steep the cliff can feel when you cross it. For early retirees drawing from investment accounts, it’s now easier to push your Modified Adjusted Gross Income (MAGI) above the cutoff and lose all subsidy eligibility in a single year.
This shift makes MAGI management more important than at any point in the last several plan years. The strategies below walk through how account sequencing and income planning can keep you on the subsidy side of the line where it makes sense.
Most early retirees end up choosing between the ACA Marketplace, COBRA, and a spouse’s employer plan to cover the pre-Medicare years. Each path has its own cost structure, time limits, and eligibility rules, and the right fit for you turns on your income, health, and how long you need to bridge the pre-65 years.
For most people retiring at 62, ACA coverage is the most practical option. Pre-existing conditions can’t be used to deny you coverage or raise your premiums, which matters when you’re in your early sixties and have probably dealt with at least one health issue.
Your subsidy is based on your MAGI and household size. In most Medicaid expansion states, Marketplace subsidies are available for incomes between 138% and 400% of the federal poverty level; for a single person in 2026, that’s roughly $21,597–$62,600 using the 2025 guidelines. In states that did not expand Medicaid, subsidy eligibility begins at 100% FPL (about $15,650 for a single person in 2026), because there is no Medicaid coverage below that threshold.
The account sequencing question is where this gets interesting. Roth IRA distributions generally don’t count toward MAGI, while withdrawals from traditional 401(k)s and IRAs do, and so do most taxable interest, dividends, capital gains, and a portion of Social Security. If you have both Roth and pre-tax savings, drawing from Roth accounts first and managing realized gains can help keep your MAGI below thresholds that shrink or eliminate your subsidy. That shift is often worth several hundred dollars a month in premiums.
Below 250% FPL, you may also qualify for cost-sharing reductions on Silver plans, which reduce deductibles and out-of-pocket limits in addition to premium help. For a detailed, zip-code-specific estimate, start with the KFF Health Insurance Marketplace Calculator, then plug the same income and premium assumptions into the Boldin Planner to see how they interact with your withdrawal plan and taxes.
Leaving a job with group health coverage often lets you stay on that plan temporarily through COBRA. Standard COBRA lasts 18 months for the covered employee and dependents, and you pay the full cost of the plan plus up to a 2% administrative fee.
Employees who receive a Social Security disability determination before or within the first 60 days of COBRA can extend coverage to a maximum of 29 months, provided they notify the plan within 60 days of the SSA decision and before the 18-month period ends. Certain second qualifying events — like the employee’s death, divorce, or a dependent aging off the plan — can extend COBRA to 36 months for spouses and dependent children, though not for the employee.
COBRA is expensive, but Boldin’s lead educator and financial wellness coach Nancy Gates points to a few situations where it’s useful. “If you’re retiring mid-year and you’ve already met your deductible, or you’re dealing with high medical expenses and want to stay on a plan you know, COBRA can make real sense,” she says. “It’s a solid short-term option, just not a low-cost or long-term one.”
One common pattern: retire at 63, use COBRA for up to 18 months while you evaluate ACA options, then transition to a Marketplace plan to cover the pre-Medicare years. As a three-year solution from 62 to 65, COBRA’s full-premium price tag is hard to justify unless your employer plan is unusually inexpensive.
If your spouse is still employed and eligible for group coverage, joining their employer plan is often your lowest-cost option. Adding a spouse to a group plan frequently undercuts individual ACA pricing, even at the family rate, because the employer is typically subsidizing a portion of the premium.
Plenty of couples structure early retirement around this dynamic: one person retires, the other stays employed a few more years partially for the health benefits. Running the actual numbers for both spouses’ plans before you both leave is worth the effort.
Private individual plans sold outside the ACA Marketplace and short-term health policies offer year-round enrollment and no income requirements, but they come with real tradeoffs. Many short-term and non-ACA plans can underwrite based on health status, exclude pre-existing conditions, or cap benefits in ways ACA-compliant plans cannot.
For most early retirees, these products are best used as reference points or last resorts rather than first choices. Price them if you’re in a unique situation, but in most cases, ACA coverage or a time-limited COBRA period will come out ahead on protection and long-term value.
Two strategies do most of the work: building a Health Savings Account (HSA) while you’re still employed and managing your MAGI to stay within ACA subsidy range. Together, they can reduce what you pay for health insurance and out-of-pocket costs between 62 and 65 by several hundred dollars a month.
If you’re still working and have access to a high-deductible health plan (HDHP), contributing to an HSA now is one of the most powerful ways to prep for healthcare expenses in retirement. Contributions are deductible, growth is tax-free, and withdrawals for qualified medical expenses (deductibles, copays, prescriptions, dental, vision) are also tax-free. HSAs are triple-tax-advantaged in a way no other account is.
For 2026, the IRS HSA contribution limits are:
If both you and your spouse qualify for the catch-up, each of you needs a separate HSA to use it. Once you’re retired, HSA funds can cover out-of-pocket medical costs, COBRA premiums, and health insurance premiums while you’re receiving unemployment benefits. ACA Marketplace premiums are the main item you can’t pay directly from an HSA.
One timing nuance: HSA eligibility stops when you enroll in Medicare, and Part A enrollment is often retroactive for up to six months, so you’ll want to stop HSA contributions well before your Medicare effective date to avoid excess contributions. The IRS explains these interactions in Publication 969, which is worth reviewing as you approach 65.
Your ACA subsidy is calculated from your MAGI, so how you generate retirement income in the 62–65 window matters as much as how much you spend. Traditional IRA and 401(k) withdrawals, taxable interest and dividends, realized capital gains, and some Social Security benefits all count toward MAGI, while Roth IRA withdrawals and return of basis from taxable accounts generally do not.
If you can cover living expenses early in retirement by drawing from Roth accounts or selling assets with low embedded gains, you may be able to stay under key FPL thresholds and qualify for larger premium tax credits and cost-sharing reductions. This requires some up-front planning around withdrawal sequencing, but the payoff at 62–65 can be substantial.
The Boldin Planner lets you model different drawdown paths, see how each changes your MAGI and taxes, and compare how much you’d pay in health insurance premiums under each scenario. That kind of side-by-side view is useful now that the subsidy cliff has returned.
Retirement health is also shaped by lifestyle choices, even though they’re not a substitute for insurance. As Boldin financial wellness coach Nancy Gates notes, “Physical activity, mental stimulation, meaningful relationships, and a sense of purpose all work together to help keep health care costs low. The retirees who stay engaged and healthy generally spend less over time.”
Medicare eligibility usually begins at 65, and your Initial Enrollment Period (IEP) is a seven-month window that starts three months before the month you turn 65, includes your birthday month, and runs three months after. If you miss this window and don’t have qualifying employer coverage, you may have to wait until a General Enrollment Period to sign up and face a permanent late enrollment penalty on Part B premiums, typically 10% for every full 12-month period you were eligible but not enrolled.
People covered under a current employer’s group health plan (their own or a spouse’s) at 65 can often delay Part B and use a Special Enrollment Period when that coverage ends, avoiding the penalty. As you get closer to 65, coordinate your Medicare enrollment timing with any HSA contributions, because enrolling in Medicare will make you ineligible to keep contributing to an HSA.
For detailed rules, including how employer coverage and COBRA interact with Medicare, review the enrollment guidance on Medicare.gov.
Your actual cost at 62 depends on three main variables: your zip code, your household income (MAGI), and the plan tier you choose. A quick estimate using the KFF calculator and a deeper run through the Boldin Planner gives you numbers you can plan around.
Here’s a simple three-step process:
The spread across those three income levels is often the difference between retiring at 62 with confidence and needing to work another year. Seeing the numbers for ages 62, 63, and 64 side by side makes the tradeoffs clearer.
Part-time work with benefits and health sharing ministries both show up as alternatives for early retirees who want to keep premiums down. Each comes with meaningful tradeoffs and neither replaces a comprehensive coverage plan.
Some early retirees take a part-time job for one reason: the health benefits. A small group of large employers extend health coverage to part-time workers who meet minimum hours and tenure requirements.
Examples have historically included:
Employers change benefits rules frequently, so treat these as examples rather than guarantees. Always confirm current eligibility, hours requirements, and waiting periods with the company’s HR or benefits site before you accept a role based on health coverage.
Health care sharing ministries pool member contributions to pay each other’s medical bills and are faith-based organizations operating outside normal insurance regulation. Monthly contributions often run below ACA premiums, especially at older ages, and enrollment is generally open year-round, which can make them appealing if you’re healthy and focused on keeping near-term costs low.
The tradeoffs are significant. These programs are not insurance, have no legal obligation to pay any claim, can limit sharing for pre-existing conditions, and often exclude categories of care that a traditional policy would cover. Before signing up, review member complaints, payment history, and the ministry’s financial standing, and read their “eligible for sharing” guidelines with care.
More established Christian health sharing programs include:
Even if you’re considering one of these, check the KFF marketplace calculator first to see what an ACA plan would cost at your income and zip code before you opt out of regulated coverage.
Health insurance between 62 and 65 isn’t a single line item. It’s a three-year budget phase with moving parts. Your premiums, subsidies, and out-of-pocket costs can change each year as your income, coverage choices, and health needs evolve.
To plan this window well, it helps to:
The Boldin Planner lets you model the entire 62–65 window as its own phase, with healthcare costs, income sources, and taxes all in one place. Many people find that once they see these three years modeled side by side, retiring at 62 looks more achievable than it did when health insurance was just a vague “big expense.”
Health insurance at 62 can run $1,000 or more per month for a full-price ACA benchmark Silver plan in 2026, with the range varying by state, county, and plan tier. If your income falls below roughly $62,600 (400% of the federal poverty level for a single person in 2026), you may qualify for subsidies that bring it down. The KFF Health Insurance Marketplace Calculator shows the net cost for your zip code.
You can get health insurance at 62 through the ACA Marketplace when you retire, because leaving a job with coverage is a qualifying life event that opens a 60-day special enrollment window. Insurers offering ACA-compliant plans can’t use pre-existing conditions to deny you coverage or charge you more.
For 2026 Marketplace coverage, premium tax credit eligibility is based on 2025 federal poverty level guidelines and generally cuts off at 400% of FPL, which is about $62,600 for a single person in the contiguous U.S. In Medicaid expansion states, people below roughly 138% FPL often qualify for Medicaid instead of Marketplace subsidies, while in non-expansion states, subsidies begin at 100% FPL because there is no Medicaid coverage below that threshold.
You generally can’t use HSA funds to pay ACA Marketplace premiums before Medicare, but you can use an HSA to pay COBRA premiums and premiums while you’re receiving unemployment benefits. Once you enroll in Medicare, you can use your HSA balance to pay Part B, Part D, and Medicare Advantage premiums tax-free, though you can’t keep contributing to the HSA at that point.
Standard COBRA coverage for an employee and dependents usually lasts 18 months after a qualifying event such as leaving a job. A second qualifying event, like a divorce or a dependent aging off the plan, can extend coverage up to 36 months for spouses and dependent children. A qualifying Social Security disability determination can extend COBRA to 29 months under specific timing rules. Some states have mini-COBRA laws that extend similar rights to employees of smaller companies.
At the end of 2025, the enhanced premium tax credits that had lowered ACA premiums since 2021 expired and were not renewed for 2026. For early retirees, this means the subsidy cliff at 400% of FPL is back, so anyone earning above roughly $62,600 as a single person in 2026 pays full price for Marketplace coverage, which can exceed $1,500 a month at age 62 in some rating areas.
If you miss your Initial Enrollment Period at 65 and don’t have qualifying employer coverage, you may have to wait until a General Enrollment Period to sign up and face a permanent Part B late enrollment penalty, typically 10% of the standard premium for every 12-month period you could have had Part B but didn’t. People covered under active employer group health plans at 65 often qualify for a Special Enrollment Period when that coverage ends, which can help them avoid penalties. The specifics are explained on Medicare.gov.
Whether COBRA or the ACA Marketplace is cheaper at 62 depends on your income and the cost of your former employer’s plan. For people with incomes below about 400% FPL, ACA coverage with subsidies is usually less expensive than paying the full COBRA premium. If your income is above the subsidy cutoff, the costs are closer, and you’ll want to compare your COBRA premium directly against Marketplace quotes using the KFF calculator for your zip code.
If you retire at 62 and enroll in Medicare at 65, you typically need to cover three full years on your own: ages 62, 63, and 64. If you delay Medicare enrollment (for example, because you continue working or rely on employer coverage), that window stretches, so your coverage plan should match your actual Medicare start date rather than just your age.
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