How do you fund the years between retirement, Medicare and Social Security?
Start by pricing the gap one year at a time. Estimate your complete annual spending, including healthcare premiums, deductibles and out-of-pocket costs, from your retirement date until Medicare and Social Security begin.
Next, inventory every available funding source. This could include cash reserves, taxable brokerage accounts, Roth IRA contributions, part-time income, a working spouse’s earnings or health coverage and retirement funds you can access without an additional penalty.
Do not assume every retirement-account withdrawal is penalty-free. Distributions taken before age 59½ may trigger an additional 10% federal tax unless an exception applies. Roth earnings and converted amounts can also follow different rules. Review the IRS early-distribution guidance.
Then, sequence your withdrawals so one account does not drain too quickly. Each withdrawal should support your spending needs without unnecessarily increasing taxes or reducing ACA Marketplace subsidies, which are based on expected household income.
Finally, protect your Social Security options. A well-funded bridge may allow you to delay claiming and receive a larger monthly benefit. Social Security can begin at 62, but payments are reduced before full retirement age and increase when delayed until age 70.
If this is your first time with me, I’m Elizabeth.
- We help women navigate taking over the finances after widowed, divorce or illness
- We help people comfortably retire 10 years early
- We provide sustainable, predictable income in retirement
