The years
between.

A client retires at sixty-two. Medicare starts at sixty-five. That gap is frequently what makes a client keep working, and it is rarely modeled.

The years between

A client retires at sixty-two. Medicare starts at sixty-five. That gap is one of the most expensive and least planned parts of an early retirement, and it is frequently what makes a client keep working.

General information for advisors, not tax advice. Thresholds and rules change, sometimes annually. Verify current figures before applying any of this to a client.

What actually happens in the gap

Employer coverage ends. The options are continuation coverage from the former employer for a limited period, a spouse's plan if one exists, or the individual marketplace.

The marketplace is where the planning happens, because premiums there depend on income — and in early retirement, income is something the advisor substantially controls.

The tension nobody flags

These are the same years you would otherwise use for Roth conversions and deliberate income realization. Filling a bracket in those years can raise marketplace costs; keeping income low to hold premiums down forgoes the conversion window.

There is no universal answer. There is a calculation, and it is specific to the household — which is exactly why it is worth doing and why generic advice fails here.

What to model

The real cost of coverage for the specific people involved. Not a national average. Age, state, and whether anyone has a condition that constrains the choice of plan.

Both paths. Convert aggressively and pay more for coverage, or hold income down and convert less. Show the client the two totals over the whole gap.

The cliff effects. Subsidy structures and premium surcharges change at thresholds, so a dollar of extra income can cost far more than its marginal rate.

What happens at sixty-five. Medicare is not free, it does not cover everything, and the supplemental decision made at enrollment is difficult to change later.

The conversation to have earlier than you think

Clients considering early retirement rarely raise this. They raise the portfolio. The gap surfaces late, and by then the decision to retire has been made emotionally.

Bring it up while the date is still hypothetical. It is one of the few pieces of planning that can change whether a client retires at all — which makes it worth more to them than any allocation decision you will make.