Retiring Early with Health Issues

Dear DTA, 

I want to retire early! I’m almost 60 and recently had a stroke. I’m tired of working, but I can’t retire until I’m 65 because I get my health insurance through my job. I need Medicare for insurance, but I don’t have the option for that until I’m 65! Thank you.

-Nancy R.

Hi, Nancy.

Thanks for writing in. Your readership is much appreciated.

In order to show our gratitude, I’m taking time today to respond to your inquiry and see if I can help in some small way.

First, I’m sorry to hear of the health issue.

A stroke is not something I’d wish upon anyone.

Now, I’m not privy to your financial details. I’m unsure of how prepared you are for an early retirement.

So some the concepts I’ll be discussing will be more generalized in nature, rather than tailored for you specifically.

Before we begin, I want to give you a little background on myself.

It’s my hope that this better allows you to understand what experience I have, where I’m coming from, and why I’m answering your question.

I’m one of the best people you could possibly ask about retiring early. After all, I quit my job and retired in my early 30s.

Not all of the methods I’ve used will apply to your situation. However, thinking outside the box, planning, and carefully maneuvering your life is tremendously helpful – whether you’re retiring five years early or 30 years early.

I’ve shared how I went about retiring so young in my Early Retirement Blueprint.

I’m not sure if your stroke is debilitating or not.

If it disables you, there are some options that you should seriously consider.

Speaking, writing, coordination, vision, or hearing impairments could qualify you for disability. This would then open you up for disability benefits from the Social Security Administration.

While Social Security is most commonly thought of for retirement benefits, the SSA actually pays a significant amount of money to disabled workers.

Some interesting stats on the Social Security Disability Program for 2017:

  • Average age of collector is 55.
  • In December 2017, payments to disabled beneficiaries totaled almost $11.5 billion.
  • Average monthly benefit received was $1,196.87.
  • Disability benefits were paid to almost 10.1 million people.

In addition to the monthly SSA benefit, you could also qualify for Medicare early. This would substantially affect the viability of your early retirement.

If you’re not disabled, there are still some options to consider on the healthcare side.

The Affordable Care Act could kick in generous subsidies for you if your income is below a certain threshold. I’ll assume it would be if you quit your job and no longer have that income coming in.

This depends on your state and income, among other factors.

In addition, you’ll want to look into Medicaid.

It’s a joint federal and state program that helps certain people with limited income and resources. Again, this would depend on your state and income, among other factors.

Your age is also a consideration.

You should be able to start collecting early Social Security benefits at 62.

It won’t be your full benefit, so you’ll have to carefully mull it over, but this might be a make-or-break situation for you that would seriously impact your monthly income.

If you have no choice, that’s on the table.

Also, many traditional retirement plans (like a 401(k) and/or IRA) can be accessed at 59.5 years old. It sounds like you’re there now.

If you and/or your employer have contributed retirement savings, above and beyond SS, this should definitely be factored in.

However, if you haven’t saved much, and if you’re not disabled, working for longer might be necessary.

I know that’s not what you want to hear.

But it’s a possibility that could be unavoidable, depending on how well you’ve prepared yourself.

If you do have to work for longer, this would undoubtedly open up your options.

For instance, you could bridge the gap between now and early SS benefits. That alone would be a massive difference in your picture.

And if you can work even longer than 62, that could put you in an even better situation.

You have to think about 60-year-old Nancy. But you also have to keep in mind the 80-year-old Nancy. The more financial resources you can put yourself in control of now, the better off you’ll be over the long run.

Extra income could be saved and invested, which could start compounding for many more years of your life.

Investing brings you into the investor class, which separates you from pure workers and consumers.

You might think it’s too late to invest. But it’s never too late. Even just a few years of compounding can start to make a huge impact on your life.

If this is a road you find yourself willing and able to walk down, we have you covered with many high-quality resources.

Fellow contributor Dave Van Knapp penned a fantastic series of articles that are designed to educate prospective investors on dividend growth investing.

They’re his Dividend Growth Investing Lessons.

Dividend growth investing is a phenomenal investment strategy.

It’s well suited to younger and older investors alike due to its inherent focus on quality companies, a long-term mindset, and growing passive income.

I personally used this strategy to retire at a very young age.

If you end up in a position to invest capital, you won’t be short on opportunities or ideas.

I present a compelling long-term dividend growth stock investment idea every Sunday, via the Undervalued Dividend Growth Stock of the Week series.

Undervalued Dividend Growth Stock of the Week by Jason FieberThis series may or may not be of service to you. But it’s something to keep in mind if/when you need to invest your money, make it grow, and build passive income for the rest of your life.

I know you might feel under pressure regarding your situation.

But you have some options, Nancy.

And I hope these concepts help to give you even more options to think about.

No matter which path(s) you choose to take from here, the best time to start making those moves is today.

I wish you luck and success.

Jason Fieber

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Disclaimer: Jason Fieber is not a licensed financial advisor, tax professional, or stock broker. Please consult with a licensed investment professional before investing any of your money. If your money is not FDIC insured, it may decline in value. To protect the privacy of our readers, any names published in this article are under aliases. In addition, text may be edited, omitted or paraphrased for grammar or length.