Retiring Before 65?

If you’re early in your career, you may think “retiree health insurance” isn’t a topic you should be terribly concerned about at the moment, but you might be surprised! If you plan on retiring before 65, when most are eligible for Medicare, then health insurance costs could be something you want to start thinking about now. 

Simply put, medical insurance is much more expensive for retirees who are not yet eligible for Medicare than for those who are. For 2023, for example, coverage for a non-Medicare retiree through an ASRS plan will be $711 to $1258 a month more expensive than coverage for a Medicare-eligible retiree.

2023 HI costs

If the premiums for non-Medicare plans seem high, you may be surprised to learn that this is probably in the neighborhood your total health insurance costs today. The primary difference is that when you are working, your employer typically picks up a large share of the total cost of healthcare as an employee benefit. When you retire, this is no longer the case until you become eligible for Medicare, when your healthcare will again be subsidized - this time by the federal government.

What should you do with this information right now? 

Think about what age you’ll be when you’d like to retire. If it’s before you’re 65, consider how you’ll pay for insurance. 

    • Open A Savings Account. You may decide you want to start saving now to make it easier to pay for insurance when you’re older. Visit our Supplemental Savings page to see what plans we offer, or talk to your employer to see what plans they may offer as well.
    • Plan on a 2nd career. If you plan on working after you retire from the ASRS, you may be able to get affordable insurance through your future employer. 
    • Coverage through a spouse. You may be able to get more affordable future coverage by joining a plan through a spouse.

Whatever the plan, the important part is not being surprised. The average ASRS retiree is near the age of 60, meaning this is a situation retirees are figuring out how to navigate all the time.

If you’re in the later stages of your career, we always have health insurance rates for retirees available on our website, so you can keep tabs on what rates look like as you get closer to retirement – just visit the Healthcare page of the Retiree section.

For those who may be on the verge of retirement now but are worried because you’ll be retiring after our November open enrollment period ends: You’ll have the opportunity to enroll in an ASRS health insurance plan upon retirement. Retiring is considered a “qualifying life event,” meaning you will have the opportunity to sign up for insurance even if your retirement happens outside our annual open enrollment period. 

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