$1.5 Million at 60 Looks Solid Until You Calculate Five Years Without Medicare

"Retiring at 60 with $1.5 million sounds comfortable until you realize Medicare doesn't begin until 65. That five-year gap creates substantial healthcare costs that can fundamentally alter what looks like a solid retirement plan. This scenario is increasingly common as workers seek early retirement but face pre-Medicare healthcare expenses that can derail even well-funded strategies. The Scenario at a Glance Age: 60 years old"

"The 4% withdrawal rule provides $60,000 per year. However, ACA marketplace premiums for ages 60-64 without subsidies can be substantial for Bronze-level coverage, according to Reddit discussions from early retirees. Healthcare premiums can consume a significant portion of annual withdrawals before deductibles, copays, or out-of-pocket expenses. The Healthcare Math That Changes Everything Pre-Medicare healthcare costs represent a significant expense that early retirees must plan for carefully. The five-year gap between retirement at 60 and Medicare eligibility at 65 requires dedicated financial planning to ensure healthcare expenses don't deplete retirement savings prematurely."

"The situation worsened in 2026 when enhanced ACA subsidies expired. According to Kiplinger analysis, middle-income Americans aged 50-64 face steep increases. These rising costs create sequence-of-returns risk where early portfolio withdrawals for healthcare reduce principal available for long-term growth. Strategic Options to Bridge the Gap The most effective strategy involves managing taxable income to qualify for ACA subsidies. Keeping modified adjusted gross income below subsidy thresholds can dramatically reduce premiums. This means carefully timing Roth conversions, managing capital gains, and potentially delaying Social Security to"

Retiring at 60 with $1.5 million and using a 4% withdrawal rule yields $60,000 per year but creates a five-year pre-Medicare coverage gap. ACA marketplace premiums for ages 60–64 without subsidies can be substantial and may consume a large portion of annual withdrawals before deductibles, copays, and out-of-pocket costs. The expiration of enhanced ACA subsidies in 2026 raises costs and increases sequence-of-returns risk as early healthcare withdrawals reduce principal available for long-term growth. Managing taxable income to qualify for ACA subsidies, timing Roth conversions, controlling capital gains, and delaying Social Security can help bridge the gap.

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