Much has been said of the latest proposed amendments to the Affordable Care Act, with most media focused on middle and low-income earners. If it is repealed in whole or in part, it could affect the retirement plans of individuals at all income levels, especially for those who have to retire early and haven’t planned for it.
Pre-existing Conditions and Early Retirement
According to the Kaiser Family Foundation, just under 30 percent of adults younger than age 65 have pre-existing conditions, yet a repeal of the ACA could do away with the clause that forbids insurance companies from denying people coverage due to such conditions. This means that early retirees will be hard hit by the proposed changes, since they’re no longer covered by employment-based coverage, but they’re also not eligible for Medicare until they’re 65. Of course, this also creates a dilemma: Those with pre-existing conditions are most likely to need coverage, yet they’re the ones most likely to be denied it.
Why Do Individuals Retire Early Without a Plan?
Early retirees are not always individuals or entrepreneurs looking forward to the second stage of life. Many are those who lose their jobs in later life and cannot find a new one — sometimes due to subtle age discrimination — or those who take time off to look after sick loved ones and find they cannot re-enter the workforce.
A Willis Towers Watson survey showed that a quarter of people expected to work beyond 70 and most expect to retire at 65. Those plans can change for a number of reasons, though; 18.2 percent of American adults are unpaid caregivers, according to the AARP, and they average 49 years of age.
Approximately half of unpaid caregivers provide care for a parent, and the rest assist a spouse or other relative. A quarter provides full-time care of more than 41 hours a week. This means they use early retirement as a way to care for a loved one. As a result, their own health insurance coverage is typically a secondary consideration when they make the decision to retire or leave the workforce.
The same might be true for those who face debilitating health concerns as they age or who are laid off in their 50s or 60s and unable to find a viable job replacement. Individuals can find themselves suddenly without health coverage — particularly if the ACA or pre-existing conditions clause is repealed.
Planning Ahead for Retirement and Health
None of this has become law yet, and it’s likely that the bill will have significant amendments as legislators debate it and modify it. However, it’s always a good idea to plan for the worst-case scenario financially and ensure that, should you have a pre-existing condition or leave the workforce early, you can cover the related health-care costs with an ample and diversified retirement fund. Gold can form a significant hedge against unexpected market shocks and can provide ample profits with the right knowledge and timing.