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Category: What To Know

Early Retirement Considerations

When you are still younger than 65, when you become eligible for Medicare benefits, that is considered early retirement. Men typically retire at an average age of 64, while women generally retire at around 62 years of age. Retiring before the usual retirement age of 65 can be thrilling and provide you with something to look forward to. However, whether you want to travel, try new activities, or simply start a new chapter in your life, you’ll need a strategy for early retirement. Knowing what’s possible as you approach retirement age is essential, so let’s talk about the specifics to consider.

Considerations for Early Retirement

While there is evidence that working longer makes you healthier and happier, there is also evidence that suggests the opposite. The National Bureau of Economic Research has determined that “retirement enhances both health and life satisfaction,” in part due to the number of persons compelled to retire due to health problems.

The biggest problem, though, is ensuring that you have enough assets to provide a sufficient level of money coming in that will last for the rest of your life so that you’re prepared to live comfortably without a wage. In the United States, the average lifetime is just under 79 years. If you retire at 55, you’ll need to put up at least 24 years’ worth of salary, and if you live to be 79, you’ll need an even larger nest egg.

What Happens with Your Social Security When You Opt for Early Retirement?

While you’ll be eligible for Social Security at the age of 62, you won’t be eligible for your maximum monthly benefit amount for another few years—for those born between 1943 and 1954, it’ll be at the age of 66. If you claim your benefits by the age of 62, you will only receive about 75% of the full amount, which has been modified to account for the fact that you will be receiving checks for a longer length of time. If you collect your benefit early, your spousal benefits may be reduced as well. Spousal benefits are lowered to 35 percent of your entire retirement amount if you wait until you’re at least 66, compared to 50 percent if you wait until you’re at least 66. Waiting until age 70 for Social Security can help you get the most out of the system you’ve paid into during your working years if and when that’s possible.

The Impact on Medicare of Early Retirement

Medicare coverage begins on the first day of the month following your 65th birthday. If you retire before this age, you’ll need to look into alternative health insurance choices, such as checking to see if your previous insurance plan will keep you in the active workforce as a retiree (a typically rare yet lucrative benefit these days). COBRA, Health-Share, or joining your spouse’s plan if they are still working are other alternatives. Until your Medicare coverage begins, weigh your health insurance alternatives to discover which one is best for you.

How Do Your Savings Affect Your Chances of Early Retirement?

Early retirement may be more feasible than you think if you have enough resources. Why? Many individuals believe that their retirement funds are locked up until they reach the age of 59 1/2, but most 401k plans have a special rule that enables penalty-free withdrawals from the age of 55 to 59 12–but only if you retire after your 55th birthday. If you still have money in a 401k plan from a previous company, and you weren’t at least 55 when you left, you’ll have to wait until you’re 5912 to take withdrawals without penalty. Additionally, if you have prior 401(k)s rolled into your current 401(k) before you retire from your present work, you will enjoy penalty-free access to these funds when you retire.

It’s critical to diversify your retirement savings as you prepare for retirement. Most people focus on increasing their 401k contributions but don’t forget about taxable and Roth (where possible) savings. Investing in several account kinds (pre-tax, taxable, and post-tax) can help you retire before you reach the age of 59.5. If you can be selective about the account types you remove from in retirement, it will also provide flexibility and maybe tax savings.

Suggestions for Your Next Steps

Many people look forward to the day when they can finally retire from their jobs. Still, worrying about money all of the time isn’t the best way to spend your golden years.
Thorough knowledge of where you are currently with your finances is a good place to start when determining whether or not you can consider early retirement.
Discuss your retirement strategy with a fiduciary financial advisor.

2021 ACA Special Enrollment Period in response to the COVID-19 Emergency

Second Chance for Health Insurance in 2021 as ACA Marketplace Reopens with Special Enrollment Period

The new SEP begins Feb. 15th, as millions of people have lost their jobs and insurance in the pandemic

The coronavirus disease 2019 (COVID-19) national emergency has presented unprecedented challenges for the American public. Millions of Americans are facing uncertainty and millions of Americans are experiencing new health problems during the pandemic. Due to the exceptional circumstances and rapidly changing Public Health Emergency (PHE) impacting millions of people throughout the US every day, many Americans remain uninsured or underinsured and still need affordable health coverage. In accordance with the Executive Order issued on 1/28/2021 by President Biden, the Centers for Medicare & Medicaid Services (CMS) determined that the COVID-19 emergency presents exceptional circumstances for consumers in accessing health insurance and will provide a Special Enrollment Period (SEP) for individuals and families to apply and enroll in the coverage they need. This SEP will be available to consumers in the 36 states served by Marketplaces that use the platform, and CMS will conduct outreach activities to encourage those who are eligible to enroll in health coverage. CMS strongly encourages states operating their own Marketplace platforms to make a similar enrollment opportunity available to consumers in their states.

Starting on February 15, 2021 and continuing through May 15, 2021, Marketplaces using the platform will open up to make a SEP available to all Marketplace-eligible consumers who are submitting a new application or updating an existing application. These consumers will newly be able to access the SEP through a variety of channels, including a network of over 50,000 agents and brokers who are registered with the Marketplace and ready to assist consumers with their application for coverage.

Some consumers may already be eligible for other existing SEPs, Medicaid, or the Children’s Health Insurance Program (CHIP) – they can visit now to find out if they can enroll even before this new SEP. Starting February 15, consumers seeking to take advantage of this SEP can find out if they are eligible by visiting, and are no longer limited to calling the Marketplace call center to access this SEP. Consumers who are eligible and enroll under this SEP will be able to select a plan with coverage that starts prospectively the first of the month after plan selection. Consumers will have 30 days after they submit their application to choose a plan. Current enrollees will be able to change to any available plan in their area without restriction to the same level of coverage as their current plan. In order to use this SEP, current enrollees will need to step through their application and make any changes if needed to their current information and submit their application in order to receive an updated eligibility result that provides the SEP before continuing on to enrollment. This SEP opportunity will not involve any new application questions, or require consumers or enrollment partners to provide any new information not otherwise required to determine eligibility and enroll in coverage. In addition, consumers won’t need to provide any documentation of a qualifying event (e.g., loss of a job or birth of a child), which is typically required for SEP eligibility.

As always, consumers found eligible for Medicaid or CHIP will be transferred to their state Medicaid and CHIP agencies for enrollment in those programs.

For more information about the Health Insurance Marketplace or, contact your local agents at Hummingbird Insurance today!

I am covered by traditional Medicare and was recently notified by my doctor that she is participating in an “ACO” created by the ACA. What is an ACO and how does this affect me?

The ACA created a new Medicare payment model, called the Accountable Care Organization, or ACO, as part of an ongoing effort to try to lower costs and improve the quality of care in Medicare.  ACOs are groups of doctors, hospitals, and other health care providers that form partnerships to collaborate and share accountability for the quality and cost of care delivered to their patients.  There are several types of ACOs, and Medicare’s payments to them vary based on their success in meeting quality and spending goals.  If any of your doctors or clinical practitioners are participating in a Medicare ACO, you still have access to all your Medicare benefits and may continue to see any Medicare provider that you choose.  All providers are required to notify you of their participation in a Medicare ACO.

I recently turned 65 and I am eligible for Medicare Part A without having to pay a premium. But I have not yet signed up for Medicare Part A or Part B. Can I purchase a Marketplace plan?

Yes, if you are not covered by Medicare, an insurer can sell you a Marketplace plan. But because you are eligible for premium-free Medicare Part A, you are not eligible to receive the premium tax credit to help reduce the cost of a Marketplace policy, even if you would qualify based on your income.

Also keep in mind that if you sign up for a Marketplace plan, rather than enroll in Medicare Part B when you are first eligible to do so, and then later you decide to sign up for Medicare, you may be required to pay a penalty for delaying enrollment in Medicare Part B.  Your monthly Part B premium may go up 10% for each year that you could have had Part B, but didn’t.  You may also owe a late enrollment penalty for Part D drug coverage, which is equal to 1% of the national average premium amount for every month you didn’t have coverage as good as the standard Part D benefit.

I am about to turn 65 and sign up for Medicare but am not sure what my options are for coverage. Where can I go for more information?

To learn more about your coverage options under Medicare, including the Medicare Advantage plans, Part D prescription drug plans, and Medigap supplemental policies available in your area, and how to enroll, you can go to the Medicare Plan Finder on or call 1-800-MEDICARE.  You can also contact the State Health Insurance Assistance Program in your state or the Social Security Administration.  Medicare provides links and phone numbers for these and other organizations at the following website:  Information about Medicare Advantage plans, Part D drug plans, and Medigap policies is not available through the federal or state Marketplaces.

I am age 60 and have been receiving Social Security disability insurance (SSDI) payments for two years. I recently received my Medicare card, and I would like to get coverage to supplement my Medicare Part A and Part B coverage. I live in a state that does not require insurance companies to sell Medigap supplemental policies to people under age 65. Can I purchase a Marketplace plan to supplement Medicare?

No, companies that sell Marketplace plans are prohibited from selling these plans to you if they know you are covered by Medicare.  If you do not live in a state that requires insurance companies to sell Medigap policies to people under age 65, some insurance companies still may voluntarily sell Medigap policies to people under 65, although they will probably cost you more than Medigap policies sold to people age 65 and older.  If you want prescription drug coverage to supplement your Medicare Part A and Part B benefits, you can purchase a Part D prescription drug plan.  You can also look into receiving your Medicare-covered benefits through a Medicare Advantage private plan, such as an HMO or PPO.  Medicare Advantage plans are not allowed to turn down people with Medicare based on your health status or having a pre-existing condition, but access to providers is generally more limited than in traditional Medicare.
Keep in mind that when you turn 65 and are enrolled in Part B, you will get a six-month opportunity to enroll in any Medigap policy you want.

Did the ACA change how much my doctor is paid by Medicare?

The ACA temporarily increased Medicare payments by 10% for certain services provided by primary care practitioners (including doctors, nurse practitioners, and physician assistants) as well as general surgeons practicing in underserved areas.  These increases were in place from 2011 through the end of 2015.

Until April 2015, Medicare was required to pay doctors based on a certain formula.  The ACA did not make any changes to that formula, but Congress repealed it in the Medicare Access and CHIP Reauthorization Act (MACRA).   Among other things, this law created a new method for determining how Medicare pays physicians. Specifically, Medicare payments to physicians will be based on either their participation in an alternative payment model that assumes financial risk, or their performance on quality and spending measures. Medicare is currently working on implementing this new system, which will begin to affect physician payments in 2019.

I am enrolled in a Medicare Advantage plan. Did the ACA make changes to this program?

Yes, the law did make some changes to the Medicare Advantage program.  This program is an alternative to traditional Medicare, where people on Medicare can choose a private plan, such as an HMO or PPO, to receive Medicare-covered benefits.  The law reduced federal payments to these plans to bring them closer to the average costs of traditional Medicare.  The law also provided additional payments to plans that earn high quality ratings.

In addition, the law limited how much cost sharing plans can charge enrollees for certain services, and limited how much plans can spend on administrative expenses and profits (referred to as “medical loss ratio” requirements.)

To learn more about how your coverage options under Medicare, including all of the Medicare Advantage plans, Part D drug plans, and Medigap supplemental policies available in your area, you can go to the Medicare Plan Finder on or call 1-800-MEDICARE.

I am enrolled in a Medicare Part D drug plan. Did the ACA make changes to my Medicare drug coverage?

Yes, the law included changes that could save you money if you have very high prescription drug costs.  If you are enrolled in a Medicare Part D plan and you have very high drug costs, the law is helping to reduce the costs you pay when you reach a gap in coverage that is sometimes referred to as the “doughnut hole.”  This gap in coverage is being phased out between now and 2019 for brand-name drugs.  If your total drug costs are more than $3,820 in 2019, after that point you will pay 25% of the cost of your brand-name drugs and 37% of the cost of your generic drugs.  In 2020, you will pay 25% for both brand-name and generic drugs.

The law also included a new requirement that people on Medicare with higher incomes pay a higher premium for Part D coverage.  These higher premiums are paid by single beneficiaries enrolled in Part D plans with incomes greater than $85,000 and married couples with incomes greater than $170,000.