Early Retirement
What Does Early Retirement Mean?
In the U.S., early retirement refers to leaving a job before the age of 65, the age defined by Social Security as the standard retirement age. If a person retires before this age, their retirement benefits are reduced.
Early retirement can also refer to a company offering an early retirement package to its employees. Such packages are typically more financially attractive than the amount a person would receive if they voluntarily resigned before retirement age without an early retirement plan from the company.
Insuranceopedia Explains Early Retirement
If a person resigns before reaching retirement age, they will receive reduced retirement benefits. Additionally, Medicare does not provide health coverage to U.S. citizens until they reach the age of 70.
Concerns about health insurance among early retirees were significantly alleviated by a law passed during Barack Obama’s administration. The Affordable Care Act (ACA), enacted in 2010, prohibits insurance companies from discriminating based on age or health conditions. This means health insurance is now accessible regardless of age or pre-existing health conditions, and premiums are not increased due to these factors. The government also subsidizes health insurance for low-income individuals, making coverage more affordable.
