Delay retirement to obtain retiree health benefits?

[sassnco]

Did you delay retirement to obtain health benefits from your employer? If so, for how long?
I ask because my DH and I have saved enough to be lean FI within a couple of years. If I retire prior to age 55, I would not qualify for a health benefit. However, if I continue to work until age 55 I would have guaranteed retiree health benefits starting at age 65. If I work until age 58, I would qualify for retiree health benefits starting at age 60. So...I am considering whether to continue to work for an additional 3 to 6 years in order to cover most of my health care expenses in retirement (between my retiree benefit and more saved in a HSA).
I would love your thoughts or advice from what you have done.

 

[Chuckanut]

No benefit other than being able to buy into a state group plan whose rates are better than what I can get individually.

 

[sassnco]

Not sure if you are being rhetoric with your response.
My company's benefit woudl pay the cast of the health insurance premium (not including copayments). After age 65, it would cover the premium for Medicare (after we pay for Part B and any Medicare surcharges).

 

[Bamaman]

I worked for a large MegaCorp, and our retiree health insurance benefits after age 55 were that we were able to purchase health insurance at the company's volume cost. No healthcare was ever provided by MegaCorp. My healthcare and a Medicare Supplement for my disabled wife were just over $450 per month. I was very thankful for a Retiree Healthcare Savings Account balance that covered our health insurance until 2 mos. prior to my 65th birthday.

MegaCorp has now cancelled all retiree health insurance benefits, and is setting up an account we can draw upon for any Medicare health related expenses--$560 for each of us.

There has recently been a U.S. Supreme Court ruling on healthcare insurance promised by companies to their ER employees up until age 65. Actually it was two U.S. Supreme Court rulings regarding the tractor and industrial equipment manufacturer, CNH Industrial. And the rulings may affect megacorps willingness to provide future retiree benefits or cancelling promised benefits. (I have not read the rulings.) What was set in stone in the past may be N/A in the future.

 

[MarieIG]

DH did work until the age where we would be covered upon his retirement (no gap).

 

[harley]

I worked a year or so past FI in order to qualify for retiree health insurance. This was before ACA, so the guaranteed coverage was critical for us. Luckily I was able to volunteer to be RIF'd, which added a year to my age and a year to my years of service. This got me FIREd with insurance a couple of years earlier than if I'd had to work until qualified.

The costs were still pretty high, especially since I retired so early and took a penalty. The cost wasn't the big issue, it was the guaranteed coverage for us.

Edit: I reread the OP, and you are looking for advice. Since you are talking about Lean FIRE, I'd keep working. I am a belt and suspenders type, with an additional bungee cord just in case. So working a few more years to fatten up the FIRE is a no brainer for me. Especially when you're talking about health care, which is the big black hole of retirement here in the U.S. of A.

 

[stepford]

I used the availability of Megacorp provided retiree medical at age 55 to delay my ER until that age - though in retrospect I could/should have left a few years sooner. Getting all one's ducks in a row can become such an obsession in the years leading up to ER that it can be tough to stop stacking the damn ducks when you have enough.

 

[Jerry1]

DH did work until the age where we would be covered upon his retirement (no gap).

Same here. I had to work until 55. I worked a bit longer but I went part time at 55. If I was the OP, I would work until at least 55 and try for 58. Five years of health coverage is a pretty large expense. On the other hand, if I could qualify for the subsidies I might consider calling it good at 55.

 

[Sunset]

Yes, keep working to get health coverage in retirement.

After all, ACA can be removed at any time, and then insurance companies could refuse to insure a person.

 

[gauss]

^ But so can corporate retiree health benefits -- or the costs can seriously be shifted to the retiree.

Retiree health benefits are legally very different from accrued pension amounts, which are protected under ERISA.

 

[DrRoy]

Yes, it's worth it.

 

[Pellice]

I wouldn't say that I "delayed" retirement to obtain retiree health benefits. From the time I started planning for retirement, those health benefits - kicking in after 25 years of employment - were figured into my retirement plan. I retired right when I planned, a few years shy of Medicare age. The retiree health benefits, which were substantial and continue in altered form after Medicare, were very worth it, but it wasn't a question of delay. I would have planned differently had they not been available.

 

[pb4uski]

Did you delay retirement to obtain health benefits from your employer? If so, for how long?...I would love your thoughts or advice from what you have done.

No, in fact, I did the opposite. I would have had to work an additional 7 years to "retire" from the firm but I wasn't willing to do that.... since the deductibles and co-pays of my current individual insurance plan are similar to the HDHI plan I had at work, those deductible and out-of-pocket costs are the same.... the only thing we pay is the excess of the cost of our individual insurance premiums over the premiums cost of my employer provided health insurance.... I call this "the cost of freedom"... you're either willing to pay it or you aren't.

When I retired, I thought this cost of freedom would be about $7,800/year.... it turned out to be much lower... due to an odd thing that I never could have anticipated, it is close to zero.

 

[pb4uski]

... After all, ACA can be removed at any time, and then insurance companies could refuse to insure a person.

Very unlikely that medical underwriting will be restored if ACA goes away.... plus on top of that 5 states prohibit medical underwriting so your advice is bad advice for people who live in those states.... and overall bad advice IMO.

 

[athena53]

^ But so can corporate retiree health benefits -- or the costs can seriously be shifted to the retiree.

Retiree health benefits are legally very different from accrued pension amounts, which are protected under ERISA.

This. Unless you've got a union contract, retiree healthcare can be taken away. My brother's was a couple of years after he retired. He just turned 63 so he and DSIL are shelling out big bucks for ACA plans. Fortunately they'll be OK- they're very frugal- but it was a shock.

A previous employer of mine froze what they paid for retiree health care at a certain point- after that they gave you that amount every year but you had to fund the rest. Still a better deal than my brother got.

 

[VanWinkle]

My company retirement health benefit was costly(1000.00 per month for each), and the after medicare benefit was 250 per person. I left both on the table and found better ways to access health coverage.

 

[pb4uski]

^ But so can corporate retiree health benefits -- or the costs can seriously be shifted to the retiree.

Retiree health benefits are legally very different from accrued pension amounts, which are protected under ERISA.

+1 good point, and there is a trend of companies curtailing post-retirement health insurance benefits since they can.

 

[MuirWannabe]

Yes, I delayed my retirement by 18 months to reach age 55 and qualify for retiree health benefits.

 

[Montecfo]

Very unlikely that medical underwriting will be restored if ACA goes away.... plus on top of that 5 states prohibit medical underwriting so your advice is bad advice for people who live in those states.... and overall bad advice IMO.

I agree. I find it unlikely that access to health insurance will go away due to legislation. Cost is another matter of course.

 

[Montecfo]

Did you delay retirement to obtain health benefits from your employer? If so, for how long?
I ask because my DH and I have saved enough to be lean FI within a couple of years. If I retire prior to age 55, I would not qualify for a health benefit. However, if I continue to work until age 55 I would have guaranteed retiree health benefits starting at age 65. If I work until age 58, I would qualify for retiree health benefits starting at age 60. So...I am considering whether to continue to work for an additional 3 to 6 years in order to cover most of my health care expenses in retirement (between my retiree benefit and more saved in a HSA).
I would love your thoughts or advice from what you have done.

In my opinion a retiree health benefit at at 65 that consists of reimbursement for Medicare is not real valuable. Not sure I would extend my work to get that benefit.

Instead, I think you want to make sure you have accumulated sufficient funds to make a comfortable retirement possible. I would make that the priority.

What have we done? Retired with no retiree health benefits, or company benefits of any kind for that matter. There is a pretty good ACA market in our area. We are FI but for now, DW continues to work and we are both on her inexpensive and good insurance through her work (she is in education).

 

[street]

No, but the company I worked for didn't have any HI offers for retirees. I went open market the first year out, then I qualified for ACA. I went because I was ready and I wouldn't have had HI dictate my decision to retire.

 

[GTFan]

No, because the Megacorp I worked for only has unsubsidized retiree HI. I waited until I got an ER buyout package that included retiree benefits but will probably never use the HI. The only way I can see paying full price for that is if the ACA goes away without a viable replacement.

 

[Aerides]

DH and I have saved enough to be lean FI within a couple of years. If I retire prior to age 55, I would not qualify for a health benefit. However, if I continue to work until age 55 I would have guaranteed retiree health benefits starting at age 65. If I work until age 58, I would qualify for retiree health benefits starting at age 60. So...I am considering whether to continue to work for an additional 3 to 6 years in order to cover most of my health care expenses in retirement (between my retiree benefit and more saved in a HSA).
I would love your thoughts or advice from what you have done.

Your situation is different than most because of the sliding scale of your potential HI, especially the year brackets:

Getting retiree medical at 65 vs. Medicare is nice (assuming it's free and good?), but we'd need more details to compare. So if that's 3 years away, and you're "a couple of years from Lean FI" then it seems you'll be staying anyway.

Moving the date out to 58 to get it at 60...eh, again it would have to be good to push the date out that far. But we don't know how close you really are to FI, and what you mean by lean vs. a comfortable retirement.

I would not ER to penny pinch. I would not do 8 more years for healthcare at 60. Would I do 3 more years when I really could do it for a SWR anyway and get good/free HI for life starting at 65? Yes.

 

[W2R]

Did you delay retirement to obtain health benefits from your employer? If so, for how long?

Yes, for two years.

It was tough to do! But I am glad that I did it. I continued to save during those two years, so my retirement is a bit overfunded but that is kind of nice.

I ignore those who tell me I am SO lucky to have federal employee/retiree health insurance. It's like they think I just somehow got it by accident.

 

[jollystomper]

I delayed my retirement a few years, and it was worth it. For me, health costs are the biggest unknowns in retirement, and it was worth doing what I could to minimize them. Delaying meant getting the employee rate for a while, and being able to purchase Megacorp health insurance at rates below the ACA (my pension is too high to qualify for a subsidy). Keeping the Megacorp insurance let us keep our current doctors - none of them seem to take our states' ACA policies.