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Retiring at 62? Here's How to Cover the Three Years Until Medicare
If you retire at 62, Medicare is still three years away — eligibility generally begins at 65, and claiming Social Security early does not change that. Those three years are very coverable, but they reward planning: your main options are COBRA from your former employer, a marketplace plan (where retirement income often qualifies for meaningful subsidies), and, for healthy retirees, private underwritten coverage. Most people end up using a combination, and the right sequence depends on your health, your income plan, and your doctors. Here's the whole picture, year by year.
The three-year bridge problem, in plain terms
Employer coverage usually ends the month you retire or shortly after. From that point until your 65th birthday you are responsible for your own coverage — and for a couple, the younger spouse's gap may be even longer. Three things make this bridge different from ordinary plan shopping:
- No single option covers the whole span cleanly. COBRA typically runs out at 18 months. Marketplace and private plans renew annually, so you'll make this decision more than once.
- Your income is unusually controllable. Early retirees often decide how much taxable income to create each year, which directly affects marketplace subsidies.
- The finish line is fixed. Everything you choose is temporary by design, which changes the math on deductibles, networks, and risk.
Option 1: COBRA — a strong start, not a full bridge
COBRA lets you keep your exact employer plan — same network, same deductible progress — for generally up to 18 months. The catch is price: you pay the full premium plus a 2% administrative fee, which is often a shock for people used to seeing only their payroll share. We walk through that math in detail in our guide to COBRA alternatives and the real math.
COBRA tends to earn its cost when you're mid-treatment, have met your deductible for the year, or need a few months of continuity while you plan. But even used fully, 18 months only carries you to roughly 63½. You will still need a second act.
Option 2: The marketplace — where income planning pays off
Marketplace (ACA) plans are guaranteed issue: your health history cannot be used to decline you or exclude conditions. For early retirees, the headline feature is the premium tax credit, which is based on your modified adjusted gross income (MAGI) — not your assets or net worth.
This is where early retirees have an advantage most workers don't. If you live partly on cash savings, brokerage principal, or Roth money, your MAGI can be modest even while your lifestyle isn't. A household drawing, say, $45,000 of taxable income may qualify for substantial subsidies, while the same household creating $120,000 of taxable income through large IRA withdrawals may qualify for little or none. The moving parts include:
- Traditional IRA and 401(k) withdrawals (count toward MAGI)
- Roth withdrawals and return of savings (generally do not)
- Capital gains, dividends, and interest (count)
- Roth conversions (count in the year converted — sometimes better done before retirement or after 65)
The interaction between withdrawal strategy and subsidies is genuinely a tax-planning question — talk to your tax professional before locking in a plan. And be aware of how quickly subsidies can change as income rises; our subsidy cliff explainer covers the thresholds that matter.
Wondering what this means for your own premium?
Start the free 2-minute coverage checkOption 3: Private underwritten plans — for healthy early retirees
Private underwritten plans sit outside the marketplace. Because the carrier reviews your health history before approving you, pricing for healthy applicants in their early 60s can be competitive with unsubsidized marketplace premiums, sometimes with broader PPO-style networks. The trade-offs are real and worth stating plainly:
- These plans are not guaranteed issue — approval depends on your health history, and applications can be declined.
- They may limit or exclude pre-existing conditions, and benefits are not required to match ACA rules.
- They do not qualify for subsidies.
The honest rule of thumb: if your MAGI qualifies you for a healthy subsidy, or you have significant health history, the marketplace usually wins — clearly. Private coverage is worth a look mainly for healthy retirees whose income (or Roth-conversion plans) put subsidies out of reach. Our explainer on what "underwritten" actually means goes deeper.
A year-by-year way to think about it
| Stage | Common approach | What to watch |
|---|---|---|
| Age 62 (retirement year) | COBRA if mid-treatment or deductible is met; otherwise a marketplace plan via your special enrollment period (loss of coverage opens a 60-day window) | Your income that year may still include salary and payouts, which can limit first-year subsidies |
| Age 63 | First full calendar year of retirement — often the best subsidy year if withdrawals are planned carefully | Coordinate IRA withdrawals and conversions with your tax pro; re-shop at open enrollment |
| Age 64 | Stay the course; avoid changing doctors or networks close to the finish line | Begin learning Medicare basics; watch for your Initial Enrollment Period paperwork |
| Age 65 | Enroll in Medicare during the 7-month window around your birthday; end individual coverage when Part B starts | Late Part B enrollment can mean a lifelong penalty — don't miss the window |
Figures and thresholds here are illustrative as of 2026 and vary by state and household — treat the table as a planning frame, not a quote.
What happens at 65
Your Medicare Initial Enrollment Period spans seven months: the three months before your 65th birthday month, your birthday month, and the three months after. Enrolling on time avoids the Part B late-enrollment penalty, which is permanent. Once Medicare starts, premium tax credits end for you (though a younger spouse can stay on a subsidized marketplace plan), and most people cancel their individual plan effective the day Part B begins. If you and your spouse are different ages, plan each person's bridge separately.
Three mistakes early retirees make
- Taking a large IRA withdrawal without checking the subsidy impact. One withdrawal can raise your MAGI enough to reduce or eliminate a year of premium tax credits.
- Letting COBRA lapse into a gap. COBRA ending is a qualifying event for marketplace enrollment — but only within the window. Missing it can mean waiting for open enrollment. If that's already happened, see your options after missing open enrollment.
- Choosing purely on premium. At 62–65, network access to your existing doctors and hospitals often matters more than a modest monthly difference.
Frequently asked questions
Can I get Medicare early if I retire at 62?
For most people, no. Medicare eligibility generally begins at 65. Claiming Social Security at 62 does not start Medicare early. A limited exception exists for people who have received Social Security Disability Insurance for 24 months, and for certain medical conditions, but ordinary early retirement is not one of them. Plan on covering the full gap from your retirement date to age 65 with other coverage.
Will my retirement income qualify me for marketplace subsidies?
It can. Marketplace subsidies are based on your modified adjusted gross income (MAGI), not your savings or net worth. Many early retirees live partly on cash savings or already-taxed money, which can keep MAGI modest even when total spending is comfortable. How you sequence withdrawals — taxable accounts, IRA distributions, Roth conversions — directly changes your subsidy, so it is worth coordinating with your tax professional before you enroll.
Is COBRA a good bridge to Medicare?
Sometimes, for part of the gap. COBRA generally lasts up to 18 months, so it cannot cover a full three-year bridge from 62 to 65 by itself. It tends to make the most sense when you are mid-treatment, have already met your deductible for the year, or want to keep a specific network of doctors while you set up the next step. For a healthy retiree paying the full unsubsidized premium, other routes are often less expensive.
What happens to my coverage when I turn 65?
Your Initial Enrollment Period for Medicare runs for seven months around your 65th birthday — the three months before your birthday month, that month, and the three months after. Enrolling on time matters, because late enrollment in Part B can carry a lifelong premium penalty. Once Medicare begins, marketplace subsidies end for you, and most people drop their individual plan when Part B takes effect.
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