2169 East Rutland Lane, Martinsville, IN 46151
Corporate NMLS #1025894
You’ve both been employed at the same company (in different departments) for the past nineteen years. Events of the past year and a half have gotten you thinking about retiring sooner than originally planned, possibly at the end of first quarter 2022. One big concern is health insurance, because you won’t turn 65 until December 2022; your wife not until February of the following year. Because you’re not yet prepared to let the company know your plans, you’ve avoided talking to HR about options, instead reading up on your own about COBRA.
Relevant information you’ve gathered: a) Although you plan to wait until you each reach Normal Retirement Age to apply for Social Security, you will each be eligible to collect Medicare beginning at age 65. b) You plan to extend the coverage you have through your employer by enrolling in COBRA. c) You understand that you’ll need to pay not only the premium amounts that are being deducted from your paychecks, but the employer share as well and possibly a markup by the insurance company. (You realize you could enroll in a Marketplace plan, but believe the employer plan is better if you can afford the cost.) Meanwhile, your Long-Term Care insurance company has just notified you of an increase in premiums, beginning this November.
Post retirement, each of you plans to supplement your income with consulting gigs done through a friend, himself a retiree in your field. A regular draw out of your investment and retirement accounts, combined with income from this free lance work should be sufficient to maintain your lifestyle. Your home mortgage should be paid off by the end of 2022, which will make things easier on the budget. The concern is this “interim period” between full time income – and full Social Security eligibility.
Consider using a reverse mortgage to make your transition into an earlier-than-planned retirement less of a financial strain, tapping your housing wealth to bridge the income “gap” as your regular paychecks stop coming. With a Home Equity Conversion Mortgage, you can draw cash to pay these interim costs, all while relieved of the need to make mortgage payments or draw down your investment accounts in the early years of retirement.
A reverse mortgage can bridge the COBRA-to-Medicare Gap.
*Not intended as financial planning advice. Please consult a financial analyst.