MW 'I have no preexisting conditions': I'm 56, earn $198,000 and want to retire early. Can I afford private healthcare?
By Quentin Fottrell
'I'm trying to figure out whether it's worth my while achieving FIRE'
"I'm curious and wonder if those who retired early have faced this problem." (Photo subject is a model.)
Dear Quentin,
I'm a 56-year-old male earning $198,000 a year with no preexisting conditions. I wonder whether those who retired early have faced this problem. What are the medical insurance options? And, are they expensive compared to having insurance with your employer? I'm trying to figure out whether it's worth my while achieving FIRE (financial independence, retire early).
Would-be FIRE
Related: My golf buddy dropped me when I didn't make him my financial adviser. Be careful who you trust.
You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com. The Moneyist regrets he cannot reply to questions individually.
The cost of healthcare on the open market could make you think again about FIRE.
Dear Would-be,
You're asking the right question.
Retiring in your 50s is something most people dream of, but the cost of healthcare on the open market could make you think again, depending on how much you have in your 401(k) and/or IRA. You will need enough savings so that you are not forced to make withdrawals during a down market - the much-feared and often-quoted sequence-of-returns risk. You also won't be able to make penalty-free withdrawals from a tax-advantaged 401(k) or IRA until age 591/2, so rule those out as sources of income before then. Even when you do reach 65, Medicare will cover certain types of in-home care, but it won't cover long-term nursing home care.
Health insurance is likely to be your biggest new monthly expense if you decide to retire before 65, so add those costs to any other big-ticket items, such as a mortgage, utilities, credit-card debt and/or a car loan. Monthly premiums of $1,000 or more could eat into your retirement savings, especially in those critical early years of retirement. What's more, healthcare costs tend to rise with age, and with age come unexpected and unwelcome health events. It's part of getting older, and you may find that you miss that employer-sponsored health plan. In addition to premiums, expect to pay deductibles, copayments, coinsurance and prescription-drug costs.
Health insurance is likely to be your biggest new expense if you retire before 65.
Fidelity Investments' 24th Retiree Health Care Cost Estimate projects that a 65-year-old retiring in 2025 will spend an average of $172,500 on healthcare and medical expenses throughout retirement - more than double its original 2002 estimate of $80,000. If that comes to pass, expect costs to rise even further over the next few years. No wonder healthcare is such a major concern. Fidelity found that 1 in 5 Americans have never considered healthcare needs in retirement, with the figure rising to 1 in 4 among Generation X respondents. More concerningly, 17% across all cohorts report taking no steps to plan for healthcare in retirement.
There are speed bumps ahead: Wealth Insights polling by RBC Wealth Management concluded that most would-be retirees, FIRE or otherwise, anticipated out-of-pocket healthcare costs of $2,700 per year. In reality, the Bureau of Labor Statistics estimates that a healthy 65-year-old couple spends more than double that amount. One theory is that older baby boomers have already begun retiring and are relying on Medicare and other healthcare services, placing growing demands on the healthcare system. As boomers exit the workforce, they will leave behind a gap in the number of physicians and care providers, the report added.
The hard truth
The hard truth is that you will face steep healthcare premiums during the decade before you qualify for Medicare at 65. Before deciding to leave your job, talk to an accountant or financial adviser about income-management strategies and the expected costs of enrolling through the ACA Marketplace. Insurance on the open market is, as you rightly point out, significantly more expensive than employer-sponsored coverage, and ACA premiums can be volatile. Until Medicare eligibility begins, your options may include COBRA, the ACA Marketplace, or Medicaid. ACA coverage could cost about $500 a month, while COBRA could cost even more.
Enhanced ACA tax credits - generous premium tax credits created under the 2021 American Rescue Plan and extended through 2025 by the Inflation Reduction Act - expired in December 2025. The ACA reverted to its original, less generous subsidy structure. Those subsidies helped defray the cost of ACA coverage for millions of Americans. Their expiration has led to higher costs for people who purchase plans on the ACA exchanges, also known as Obamacare. In addition, premiums could rise by a median of 15% in 2026 - and some experts estimate increases of 20% or more - because many ACA insurers are requesting premium hikes.
In December 2025, the ACA reverted to a far less generous subsidy structure.
Before the Affordable Care Act took effect in 2014, insurers in the individual market could refuse coverage to people with serious preexisting conditions or those working in high-risk occupations. They could also limit coverage for specific treatments or services and charge higher premiums to individuals with health issues. Under ACA rules, insurers are prohibited from denying coverage because of pre-existing conditions. That won't affect you, given that you don't have any pre-existing conditions, but it's worth noting for readers of this column. Plus, millions of people who don't have a pre-existing condition today may have one tomorrow.
The Urban Institute, a Washington, D.C.-based think tank, recently said that the expiration of enhanced premium tax credits could reduce ACA enrollment by 7.3 million people and increase the number of uninsured Americans by 4.8 million. A separate study found that regulatory changes and provisions in President Trump's One Big Beautiful Bill Act could cut marketplace enrollment by 5 million people and increase the uninsured population by 2.7 million. "There will not only be a reduction in enrollees, but also likely a less healthy risk pool, meaning greater risk for insurers," the report said. Cumulatively, that puts pressure on the entire system.
Watch out for potholes.
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The Moneyist regrets he cannot respond to letters individually. Check out The Moneyist's private Facebook group, where members help answer life's thorniest money issues. Post your questions, or weigh in on the latest Moneyist columns.
More columns from Quentin Fottrell:
'I feel like I'm living a lie': My husband and I pretend we're strapped for cash in front of friends. Is that bad?
'He didn't really pay attention': I told my friend he left millions on the table in retirement. Did I do the right thing?
I'm selling my $1 million Maui home. Will my agent charge me less than a 6% commission?
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-Quentin Fottrell
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May 30, 2026 07:15 ET (11:15 GMT)
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