Should I let my wife retire early and risk private medical costs for our family of four?

Many people dream of retiring early and the freedom that comes with it. And if you save well enough, you may end up in a position where you can leave the workforce well ahead of your peers.

But even if you manage to save a bundle to allow for an early retirement, there’s one expense that could get in your way — healthcare.

The problem with early retirement is that many people’s health insurance coverage is tied to their jobs. So if you retire early — well before you become eligible for Medicare — you might have to pay for health insurance out of pocket for many years. That could, in turn, eat into your savings and budget and make your life more stressful.

In this Reddit post, we have someone whose wife carries the health insurance for the family. The wife is able to retire at 50 with a pension, but if she waits until 55, she can get a pension plus subsidized health insurance for their family of four.

The couple has a nice amount of savings, but the cost of private health insurance could be enormous. So they’re not sure what to do. And it’s a tough situation. But it’s also one that the poster really should be navigating alone.

Get all of the information

The poster really can’t make a decision here until they do two things. First, they need to research insurance options and run the numbers.

They can look at a marketplace plan on healthcare.gov and see what rates they’re looking at. Or, they can use an insurance broker to try to find private insurance. Once they see some numbers, they can better understand the costs they might be dealing with.

Secondly, the poster needs to talk to their wife, since it’s the wife’s retirement on the line. And frankly, the wife should get a say in what she does career-wise.

If the wife is extremely burned out, she may decide that she’s had it at 50. But if she can bear to keep working a few extra years, then doing so may be fine with her. There may also be the option to retain coverage if the wife transitions into part-time work for a few years, which could be a good compromise.

A financial advisor can help

Many people worry about early retirement simply because they’re not covered by employer health insurance and are concerned about paying for coverage out of pocket. If you’re in a similar situation to the one above, it’s best to talk to a financial advisor and see what they have to say.

First, a financial advisor may be able to help you explore affordable coverage options. But also, they can run the numbers for you and help you determine how badly the cost of health insurance might eat into your retirement budget.

Depending on what they say, you may decide to work a few more years to avoid the expense of health insurance. But it’s good to run the situation by a professional so you get an unbiased opinion. And if it’s a decision that impacts not just you, but also, a spouse, it’s best to talk things through together so you’re on the same page.

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