Many American workers retire just in time for Social Security benefits but a little too early for Medicare coverage. The average retirement age is 62, according to a study from Mass Mutual (1), which also happens to be the earliest age you can start receiving Social Security checks. However, unless you have a specific disability, Medicare eligibility doesn’t start until age 65. In other words, many retirees face a few years of potentially steep health care insurance premiums. If you retire earlier than ...

Core Insights - The article discusses the financial strategy of a retiree who relies on a taxable portfolio for income while benefiting from health insurance subsidies [2][3][5] - It highlights the importance of maintaining a low taxable income to qualify for health insurance subsidies, specifically the Premium Tax Credit (PTC) [5] Financial Strategy - The retiree has a total of $2,240,000 in various accounts, including $625,000 in a taxable portfolio, $115,000 in a Roth IRA, and $1,500,000 in a traditional IRA [3] - The plan is to draw exclusively from the taxable portfolio until the age of 65 to avoid increasing taxable income and incurring higher tax bills [3][4] Health Insurance Subsidies - The Premium Tax Credit (PTC) significantly reduces health insurance costs for eligible individuals, allowing for lower monthly premiums or a tax credit at year-end [5] - Enhancements to the PTC from the American Rescue Plan and the Inflation Reduction Act are set to expire after 2025, which may affect future eligibility and benefits [5] - Eligibility for the PTC is based on income and household size, with specific thresholds that will revert after 2025 unless Congress acts [5]