How Does Income Affect Marketplace Health Insurance?

Welcome back to Retiring Today. I'm Molly Nelson here with Lauren Merkel and Anna Marie Morrow, and we're answering questions that we received recently during Online Journey to Retirement Workshop in a section we call Your Journey, Your Questions. Cindy had this question. Cindy asks, is the Marketplace healthcare premium based on the previous year's income or current year income? Anna Marie, what would you tell Cindy? That is a great question, Cindy. The answer is current year income. Whatever calendar year you need Marketplace insurance covered for, they will look at the income earned within that calendar year you need coverage. And I love this question because this is where we do a lot of interactive planning. And basically someone's enrolling in the Marketplace if they've retired before the age of 65, and we wanna get them those savings, and this is where we can implement income strategies, what tax buckets we're taking things out of, and that's where it can be really fun. And it's really confusing, which is also why we have to work so closely together because Medicare premiums actually look back two years. So open market is current year, Medicare is two years, so it's very easy to get those numbers confused, but the implications of that confusion can be drastic. When we're especially talking about planning and the tax planning that we integrate into the overall retirement plan can have a direct impact on current year, as well as two years ago income, which obviously has an impact on healthcare and then Medicare. Let's talk about why Cindy was probably asking that question. So you have this online journey to retirement workshop where you go through those six pillars of the retire secure roadmap. You see the retire secure roadmap on your screen. This is the visual representation of the plans that you help people build. So we stopped at healthcare during the workshop and you talk about what you can do if you wanna retire before you're Medicare eligible. And you really do a good job of walking people through some of the options for retiring before 65. Yeah, John and Sue, and we see it all the time as well. People don't wanna wait until age 65 to retire, even 63 and a half, where they can utilize COBRA until Medicare eligibility. So those options on the marketplace, if people wanna retire before that, we look at those options as it relates to their overall retirement planning to see what kind of savings we have. So yeah, that's exactly probably where her question came from, is what year are they looking at? It's pretty simple. It is that current year, which makes our planning simple and effective.