Direct answer: Retiring before 65 does not start Medicare. You need coverage from your retirement date until the month Medicare begins. The usual options are:
- COBRA, generally up to 18 months,
- an employer retiree plan, if one is offered,
- a spouse's job-based plan, or
- a Marketplace plan, if losing your job coverage qualifies you for a Special Enrollment Period (subject to eligibility).
Marketplace savings depend on your retirement income for the year, not on the fact that you retired. For 2027 coverage, household income above 400% of the poverty line ($63,840 for one person, $86,560 for a couple) gets no premium tax credit. How you draw retirement income can decide whether you qualify.
Bridge options compared
| Option | How long | What you pay | Watch for |
|---|---|---|---|
| COBRA | Generally up to 18 months (federal) | Up to 102% of the full premium | It may run out before 65. Leaving it early does not open a Marketplace window |
| Retiree plan | Set by the employer | Set by the employer | It may require you to enroll in Medicare at 65 and pay secondary to it |
| Spouse's job-based plan | While the spouse stays employed and the plan allows it | Spouse's payroll share | Ask the employer about mid-year enrollment when your coverage ends |
| Marketplace plan | Each plan year until Medicare | Premium minus any premium tax credit | The credit depends on MAGI; income above 400% of the poverty line gets no credit |
How retirement income affects Marketplace savings
The Marketplace uses modified adjusted gross income (MAGI) for the coverage year.
| Income source | Counts toward MAGI? |
|---|---|
| Pension payments | Yes |
| Traditional IRA and 401(k) withdrawals | Yes (the taxable amount) |
| Roth IRA conversions | Yes (the converted amount is taxable) |
| Qualified Roth IRA withdrawals | No |
| Social Security benefits | Yes, including the non-taxable part |
| Capital gains and dividends from a taxable brokerage account | Yes |
| Cash from savings already taxed | No |
| Tax-exempt interest | Yes |
Because credits stop at 400% of the poverty line, one large withdrawal or Roth conversion can cost a full year's credit. Drawing more from savings and qualified Roth money, and less from traditional accounts, can keep MAGI inside the range. At the low end, you need at least 100% of the poverty line ($15,960 for one person, $21,640 for a couple) to get a credit. Have a tax professional plan the withdrawals. An agent can show you the coverage effect of each income level.
For 2027, the expected contribution toward the benchmark Silver plan ranges from 2.15% to 10.22% of income. The ACA lets insurers charge older adults up to three times what they charge younger adults, so at the same income a 62-year-old usually gets a larger credit than a 30-year-old. Check actual quotes on HealthCare.gov once 2027 prices post on November 1.
Timing the switch without a gap
- Get the coverage-end date in writing. Employer coverage often ends on the last day of the month.
- Pick a Marketplace plan up to 60 days before that date, and the new plan can start the next day, on the first of the month.
- If you elect COBRA, mark the date it ends. When it runs out, you may qualify for a new Special Enrollment Period, subject to eligibility.
Plan the Medicare handoff at 65
- Your Initial Enrollment Period is 7 months: 3 months before your 65th-birthday month, that month, and 3 months after. Sign up early in that window so Medicare starts the month you turn 65.
- Marketplace credits end for any month you are eligible for premium-free Part A. Drop the Marketplace plan when Medicare starts.
- COBRA and retiree coverage do not let you delay Part B without a penalty. Only coverage from current employment does. Medicare.gov says not to wait until COBRA ends to sign up.
- A younger spouse can keep a Marketplace plan after you move to Medicare. Their credit is then based on the household's income.
See when to sign up for Medicare and the turning 65 checklist.
Bring your retirement date, any COBRA or retiree paperwork, a draft income plan for the year, and your prescriptions. Call (863) 640-3102
Related reading
- Retiring before 65 in Florida (local checklist)
- COBRA vs a Marketplace plan
- What counts as income for Marketplace plans
- How much income qualifies for a subsidy
- ACA subsidy cliff
Common questions
Does retiring at 62 start Medicare?
No. Age-based Medicare begins at 65 for people who qualify. If you retire earlier, you need COBRA, a retiree plan, a spouse's plan or a Marketplace plan until Medicare starts.
Does retirement income count for Marketplace subsidies?
Yes. Pensions, taxable IRA and 401(k) withdrawals, Roth conversions, capital gains and all Social Security benefits count toward MAGI. Qualified Roth IRA withdrawals and spending from already-taxed savings do not.
Is there an income limit for early retirees on the Marketplace?
Yes. For 2027 coverage, premium tax credits stop above 400% of the federal poverty line, which is $63,840 for one person and $86,560 for a couple.
Can I keep COBRA and delay Medicare Part B at 65?
No. COBRA is not coverage based on current employment, so it does not let you delay Part B without risking a late-enrollment penalty. Medicare.gov says not to wait until COBRA ends to sign up.
Sources
- HealthCare.gov, What to include as income
- HealthCare.gov, Special Enrollment Periods
- HealthCare.gov, COBRA coverage
- HHS/ASPE, 2026 poverty guidelines
- IRS, Rev. Proc. 2026-26
- IRS, Questions and answers on the Premium Tax Credit
- Medicare.gov, When can I sign up for Medicare
- Medicare.gov, Working past 65 (COBRA and Part B)