Emily Brandon has an informative blog titled “Planning to Retire” on the US News & World Report web site. Her post today is about her mother’s recent decision to retire.
She discusses the importance of employer-sponsored health care coverage and reminds her readers that Medicare is not available until you turn 65. In other words, if you retire at 64 you most likely will not have the employer-sponsored health care coverage that you had when you worked. Ms Brandon writes, “It’s also often worth it to try to keep your employer-sponsored health insurance until Medicare eligibility kicks in at 65. Less than a third of large companies provided retiree health benefits in 2008, according to a Kaiser Family Foundation survey, and only 4 percent of small firms offer them.”
The following HealthView example underscores the magnitude of health care expenses and the importance of employer-sponsored health care.
64-year old male who retires at 64 (one year before he is eligible for Medicare)
His annual medical expenses including premiums and out-of-pocket expenses = $6,160
64-year old male who is working at 64, and has employer-sponsored health care
His annual medical expenses including premiums and out-of-pocket expenses = $2,643
HealthView data is based on proprietary medical underwriting guidelines and an in-depth analysis of U.S. nationwide average health care costs. Calculations assume 64 year-old male is healthy. The working male has group coverage through his employer and pays 75% of premium.
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