I plan to retire the day after I get the bonus on 2/14, giving 2 weeks notice. I am still about 3 years away from the Medicare age of 65. Cobra is a lot cheaper than the retiree health coverage offered by WFC. If I select Cobra it will run out in 18 months and I would need to go to the healthcare marketplace to cover the remainder of the 3 yrs until I reach 65. Has anyone taken this course of action ? Any downsides ?
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I did exactly what you described but it requires one thing many don't have. Already taxed money. I took COBRA for 18 months at a cost of $522 a month. I then took ACA starting in February and needed it for 10 months. In that year I took in only $$ from already taxed investments and had essentially no income except for interest which kept me in the $30's for annual income. My ACA for 10 months was $97 a month. Transitioned to Medicare after that. My neighbor did something similar but took out a home equity loan to pay his bills for the ACA year and then paid it off after getting on Medicare. ACA income used is for the year you are getting the ACA coverage not previous years.
In addition to retiring on the 1st of the month you will receive your PTO for that month. Which you be able to receive in your final pay. It will be a day or two - still it is yours! Don’t leave anything on the table.
ACA only covers for emergencies when you are out of your state so make sure you are having a true emergency if you go to the emergency room on vacation. I was laid off from my last job and had to determine whether to go on ACA or COBRA. COBRA was cheaper and better than my state’s offerings. It was going to cost $1300 a month for a family plan on ACA because I couldn’t get subsidies since I received a severance and had to pull money out of savings to live on. It caused me to have a “high” income. I was also putting my kid through college. I also would have had a really high deductible. So much for the “Affordable” Care Act. (COBRA was only $1000 and a low deductible.)
Just a reminder- retire on the 1st of the month - you will be covered for that entire month. Don’t cut yourself short. It’s your money (benefits) you should take advantage of every dollar. ( I retired last year after bonus and my retirement date was 3/1/2024). Good luck.
Stealing other people's money would tend to result in some great prices on things alright. We should just do that for everything we but, amiright?
To take the most advantage of ACA in your near-retirement years, you need to have minimal income. I looked up an equivalent ACA health care plan to what I currently have at Wells; based on my current Wells salary, it would cost me $2000/month through the ACA. If my income is less than 30k, then that plan only costs $300 per month. Rates are graduated based on your income. If you can work it so you are living off of savings and not selling stock (capital gains) or pulling from 401k/IRA (considered income), you can save a lot.
Do your research, but in a similar scenario I went for the ACA option in California, which was much better coverage than the Wells Fargo plan I had been paying for, and 100% free. It was less than 24 hours from the time I submitted my application until the time I was notified that I was covered. Incredible!
I retired at 62 and decided to stay with the Wells Fargo health insurance since I have some health issues and felt more safe with the known option vs the unknown. The thing is: it’s not exactly the same coverage. For example the annual deductible was $1000 higher. And it is very expensive. If I had it to do over again, I would probably do COBRA and then the marketplace. No downside that I can see.
The problem with this plan is that there might not be an ACA by the time you need it, in which case if you have a pre-existing condition you are well and truly effed.
I would go with the option that would definitely get me through to Medicare.