Chapters

00:00 Introduction to Retirement Planning and Health

00:50 Health's Impact on Retirement Timing

02:00 Insurance Options Before and After Age 65

03:25 Hidden Health Factors in Retirement

04:26 Action Items for Bridging the Health Insurance Gap

Transcript

Hi everyone, I'm Ryan Earley, vested PERS member and host of the PERS Pro YouTube channel. In our last video, we broke down the math of retirement to see if you're financially ready. Today, we are moving to the second major consideration of retirement planning, your health. We'll explore how your physical health, your insurance options, and even your spouse's health can dictate the perfect time to retire. Let's get started.

The most direct way health impacts your retirement date is your ability to keep doing your job. Public service can be demanding, whether you're on your feet in a classroom, using your back to build physical infrastructure, or dealing with the stress of serving in public office. If you find that your physical health is declining, but you haven't quite reached your full pension goals, you have options. You don't always have to choose between total retirement and burnout. Role transition: Consider transferring to a less physically demanding role within your current agency. This allows you to keep earning service credit while accommodating physical limitations. Part-time bridge employment: Dropping to part-time can reduce the wear and tear on your body while still providing a paycheck and health insurance. It can also allow you to keep earning service credit if you are working at least 20 hours each week, which increases your PERS benefit payment. On the flip side, what if your health is great? This is where your retirement why comes in. If your retirement dreams involve physically demanding activities like traveling the globe, tackling home renovations, or finally running that marathon, retiring while you are in peak health is a very rational choice. Waiting until you have maximum money but minimum energy can often lead to a retirement spent in doctor's offices rather than on hiking trails or playing with the grandkids.

Perhaps the biggest health hurdle for PERS members is the gap between retirement and age 65 when Medicare begins. How you bridge this gap depends heavily on your marital status and your age. Here is a breakdown of your primary insurance options before and after age 65. State retiree plan: You can continue your coverage through Blue Cross and Blue Shield of Mississippi if you were enrolled the day before retirement. However, remember that as a retiree, you typically pay the full premium yourself, which is significantly higher than what you paid as an active employee. The marketplace: If your income is lower in early retirement, you might qualify for subsidies on the healthcare marketplace that make it cheaper than the state plan. Medicare. Once you hit age 65, you transition to Medicare. This is when you'll have the most flexibility and generally the lowest costs, especially when paired with a PERS sponsored supplemental plan. Spousal plan: If you are under age 65 but married and your spouse has a health insurance plan through their employer, you could be added as a dependent under their plan. In a future video, we'll cover your various health insurance options as a retiree in much more detail.

Beyond physical health and insurance availability, don't forget these hidden health factors. Spousal health: Your retirement isn't just about you, it's about the health of your partner. If your spouse is facing health challenges, retiring earlier might be necessary to provide them care. PERS benefit option: Remember that choosing a maximum allowance provides for you, but several alternative option plans provide for your beneficiary if your health or theirs is a concern. The Medicare Part D Trap: The state health plan for retirees does not include prescription drug coverage for those 65 and older. You must enroll in a separate Medicare Part D plan to avoid penalties. Long-term care: PERS does not provide long-term care insurance. As you age, health care becomes your fastest growing expense. Ensure you have a plan for costs that Medicare doesn't cover like assisted living.

Here are your action items for today. One, price the gap. If you are under 65, visit the Mississippi Department of Finance Administration or DFA website to see current retiree premium rates. Compare those prices to plans on healthcare.gov marketplace. Be sure to include this healthcare cost in your retirement spending plan until age 65. Two, audit your physicality. Be honest about your job. Can you realistically perform your current duties until your targeted retirement date? If the answer is no, look at current job postings to get an idea of potential lateral moves or part-time opportunities within your agency. Three, the Medicare countdown. If you are within three months of turning 65, visit Medicare.gov to understand your enrollment windows for Parts A and B to avoid lifetime late enrollment penalties and to incorporate those premiums into your retirement spending plan.

I hope this video helps you realize that retirement timing is about much more than just money. In our next video, we'll move to the third major consideration when deciding when to retire, having purpose. Please make sure you subscribe so you don't miss this and other videos in our new retirement series. If you found this video helpful, you can thank me by hitting the thumbs up button and sharing it with other PERS members. If you have a follow-up question about PERS or anything else related to personal finance, please visit our website at perspro.ms and submit your question or topic for a future episode. Thank you for your valuable public service to the state of Mississippi. We'll see you next time.

Disclaimer. This video is for educational and informational purposes only. Neither the host nor this YouTube channel are officially affiliated with, endorsed by, or sponsored by the Public Employees Retirement System of Mississippi. Always consult a qualified professional for personal advice specific to your situation.