Mini-Retirements and ACA Health Insurance

What is a Mini-Retirement?

A mini-retirement is a planned break from full-time work for a period of months or years. It’s an opportunity to take time off for personal growth, travel, or to pursue other interests.

ACA Health Insurance Coverage During Mini-Retirements

The Affordable Care Act (ACA) provides affordable health insurance options for individuals who do not have employer-sponsored coverage. During a mini-retirement, you will need to consider your health insurance options carefully.

Options for ACA Health Insurance Coverage:

Spouse’s Employer-Sponsored Plan: If your spouse has employer-sponsored health insurance, you may be eligible to join their plan. This is often the most cost-effective option.
Individual Marketplace: You can purchase health insurance through the individual marketplace (also known as the Health Insurance Marketplace). Premiums and subsidies will vary depending on your income and household size.
Medicaid: If your income is below a certain level, you may be eligible for Medicaid, a government-sponsored health insurance program.

Case Study: Post

The post discusses a couple’s plan to take a six-month mini-retirement. Their income is $150,000 gross, and they have a stay-at-home partner with three young children. They have met with a benefits specialist and estimated that they could qualify for an affordable health insurance plan through the individual marketplace if their anticipated income for 2024 were below $78,000.

Financial Considerations for Mini-Retirements

In addition to health insurance costs, there are other financial factors to consider when planning a mini-retirement:

Savings: You will need to have enough savings or other income sources to cover your expenses during your mini-retirement. A barebones budget is not advisable; consider a comfortable margin of safety.
Expenses: Estimate your expenses during your mini-retirement. Remember that certain expenses, such as housing and utilities, may remain the same, while others, such as travel and activities, may increase.
Unexpected Costs: Plan for unexpected costs as part of your budget. Emergencies can arise during any time, and a mini-retirement is no exception.
Re-Employment: Consider the potential challenges of re-entering the workforce after a mini-retirement. You may need to update your skills or network, and you may not be able to return to your previous position or salary range.

Making a Decision

Deciding whether to take a mini-retirement is a personal one. It’s important to carefully consider your financial situation, goals, and family circumstances. If you have the financial resources and a clear plan, a mini-retirement can be a rewarding experience.