Key facts
- Losing a job at 56 may necessitate early retirement.
- Spouses may be able to join employer-sponsored insurance plans during a special enrollment period triggered by job loss.
- Individuals under 65 with income below 138% of the federal poverty level may qualify for Medicaid in expanded states.
- ACA marketplaces offer health insurance options for those who lose employer coverage.
- Claiming Social Security before full retirement age (FRA) results in permanently reduced monthly benefits.
- Claiming Social Security early can also lower survivor benefits for a spouse.
Individuals who lose their jobs at age 56 face critical decisions regarding retirement and financial planning. Options for maintaining health insurance include enrolling in a spouse's employer-sponsored plan, which may be possible outside the usual open enrollment period due to the job loss triggering a special enrollment period. Alternatively, individuals under 65 with incomes below 138% of the federal poverty level may qualify for Medicaid in states that have expanded the program. Federal and state-run health insurance marketplaces established by the Affordable Care Act (ACA) also provide options, with the job loss qualifying for a 60-day special enrollment period. It is crucial to determine if chosen insurance plans allow for delayed Medicare enrollment to avoid lifelong penalties. Claiming Social Security benefits before reaching full retirement age (FRA), which is 67 for those born on or after January 2, 1960, results in permanently reduced monthly payments. Heather Schreiber, founder of HLS Retirement Consulting, emphasizes that Social Security income is critical for long-term financial sustainability and advises against drawing from it early unless health conditions significantly lower life expectancy. Claiming early also impacts survivor benefits for a spouse. If a couple needs early Social Security income, one strategy is for the lower-earning spouse to file early, allowing the higher earner's benefit and eventual survivor benefit to grow.