Now that the dust has settled a bit after the election, it’s time for those considering retirement, as well as those already retired, to examine how the results may impact us all.

Our biggest concern should be health insurance. As part of the Inflation Reduction Act, the ACA (Obamacare) has been offering premium tax credits that have significantly reduced costs for millions. These credits were set to expire at the end of 2025, and it now seems likely that they will. One crucial benefit has been for individuals and couples earning more than 400% of the federal poverty line, who were still able to receive a substantial subsidy. If the premium tax credit ends, they will no longer be eligible for this financial assistance.

What does this mean for those considering retirement or currently retired but not yet eligible for Medicare? In simplest terms, a couple with an income of $80,000 would no longer qualify for a subsidy. This could impact two people receiving full pensions, for example. Similarly, an individual retiree making over $60,000 would also lose eligibility.

Strategies will vary depending on each retiree's situation. Some may need to stay on district insurance, while others might consider ways to keep their income lower until they reach Medicare age.

As Nancy Pelosi says, "Elections have consequences." Unfortunately, this change will affect millions of Americans, both retired and not.

September 9, 2024

I wanted to briefly share a new experience I'm having in retirement. My escrow account, funded by my sick leave, has run out, and now I have to pay for district insurance out of pocket until the end of the year. For both my spouse and me, the monthly bill for health and dental insurance is $2,388! It's a significant expense and has been quite an eye-opener for us.

I've mentioned this many times in consultations, but I think it's worth repeating: If your escrow account runs out mid-year, you'll have to decide whether to continue with the district's insurance or seek private insurance. I didn't find anything reasonable on the private market, so we'll be paying until the end of the calendar year when we can switch to the healthcare.gov exchange.

Most retirees these days are finding this necessary due to the exorbitant cost of health insurance through the district. Unfortunately, the district charges retirees more than they charge active employees. For my spouse and me, healthcare.gov will be a better option. Although we'll pay all of our medical expenses out of pocket until we meet our deductibles, which will likely be around $7,500 each, our subsidy will be large enough to reduce our insurance premium to about $300 per month. Overall, our costs will likely be around $15,000 for the year, compared to over $25,000 we would spend just on health insurance premiums through the district.

These are all things that need to be planned for, because taking care of yourself is essential to a happy and healthy retirement!