The cost nobody budgets for
Health insurance in early retirement
If you stop working before 65, you buy your own health cover until Medicare starts — and the years right before it are the expensive ones. It is the largest cost the FIRE community models least well.
Funding that premium for life adds
$397,850
to the portfolio you need — on top of everything else you were already planning for. A recurring cost divided by your withdrawal rate is the capital it takes to cover it indefinitely.
This is arithmetic, not a quote. We cannot tell you your premium — it depends on your age, your state, your income and the plan you pick. What we can tell you is what any given figure does to your target.
The one number, and everything it depends on
$15,914
a year, for a 60-year-old earning $65,000, on an unsubsidised benchmark silver plan — $10,389 of it added when the enhanced premium tax credits lapsed
That is a benchmark, not a quote — and it only means anything with its conditions attached. We would rather print the conditions than the headline.
- It is age-rated. Marketplace premiums rise steeply with age — the oldest enrollees can be charged up to three times the youngest. A 45-year-old pays materially less than this.
- It assumes no subsidy. $65,000 sits just above the line where the enhanced premium tax credits stop. Below that line the cost can fall sharply.
- It is legislatively live. It assumes the enhanced premium tax credits remain lapsed (they expired 31 December 2025). If that changes, this figure changes. Correct as of July 2026.
- It is US-only, and it varies by state and by the plan you choose.
Source: KFF, a nonpartisan health policy nonprofit — not a company selling you a plan.
What the community actually plans for
In its own annual survey, the financial-independence community reports modelling healthcare at a median of roughly $4,000 a year — while planning retirements measured in decades.
The comparison you will see elsewhere, and why we won't make it
It is tempting to put $4,000 next to $15,914 and call it a twelve-thousand-dollar blind spot. That would overstate it, and this site does not do that. The two figures describe different people: the survey skews young, and the benchmark is a 60-year-old. Because premiums are age-rated, a large part of that gap is simply age rather than employer-versus-marketplace.
What survives the caveats is still worth knowing: the cost is under-modelled, and it is under-modelled in the years it matters most — because the price rises exactly as you approach the Medicare cutoff, and a plan built at 35 rarely accounts for what the same cover costs at 60.
The survey is self-selected and self-reported, skews heavily to high-income US technology workers, and is not representative of anyone but its respondents. We quote it because it is the community describing its own assumptions, which is exactly the thing worth examining — not because it measures the population.
What to actually do about it
- 01
Get a real quote, not a national average
Ten minutes on the federal or state marketplace gives you real plans at your age, income and postcode. That number is worth planning with. Ours is a benchmark for scale.
- 02
Put it in your spending figure
Every FIRE calculator, ours included, takes your annual spending at face value. If health cover isn't inside that number, your target is too low — by the capital cost shown above.
- 03
Model the expensive years separately
The cost isn't flat. A single average across a 40-year retirement hides that the pre-Medicare stretch is the peak, and that peak is what breaks plans.
Then re-run your number with health cover included: FIRE calculator · Coast FIRE calculator
Common questions
- How much is health insurance if you retire early?
- There is no single answer, because premiums are age-rated and vary by state, income and plan. The figure this page is built on is a benchmark: about $15,914 a year for a 60-year-old earning $65,000 — just above the income line where subsidies stop, and assuming the enhanced premium tax credits stay lapsed. Of that, $10,389 is the increase since those credits expired. A 45-year-old on the same plan pays substantially less. Your own number has to come from the marketplace, not from us.
- Why is health insurance the biggest early-retirement cost people miss?
- Because a job quietly pays most of it. Employer cover hides the real price, so when people estimate retirement spending they often carry forward what they personally paid rather than what the cover costs. In the years before Medicare there is no employer to absorb the difference, and those are also the years when premiums are highest.
- What changes at 65?
- Medicare eligibility begins at 65 in the US. That is why the gap matters so much for early retirement specifically: someone leaving work at 45 is funding two decades of their own cover, and the last of those years are the most expensive ones. Retiring at the normal age largely skips the problem.
- Does the FIRE community underestimate this?
- The community's own survey shows people modelling healthcare at roughly $4,000 a year while planning multi-decade retirements. That is well below an unsubsidised benchmark plan — but the comparison is not like-for-like, and we would rather say so: much of the gap is age, not employer-versus-marketplace. The survey skews young, and marketplace premiums can be up to three times higher for the oldest enrollees than the youngest. The honest claim is that the cost is under-modelled, not that everyone is out by six thousand dollars.
- How do I find my actual cost?
- Go to the source. The federal or your state marketplace will quote real plans at your age, income and postcode, and KFF publishes a subsidy calculator. That takes ten minutes and gives you a figure worth putting into a retirement plan. Any site that hands you a single national number for health insurance — including a single number on this page — is giving you a benchmark, not a quote.
How we decide what is solid enough to publish: how we source this.