Should You Delay Retirement During High Unemployment?

From “I’m ready” to “is my plan crisis‑proof?”

So, picture this: you’ve circled a retirement date, the spreadsheet says you’re fine, and markets aren’t melting down. Then unemployment jumps. Suddenly the plan that felt sturdy in calm waters starts to wobble a bit. Not because your portfolio cratered, but because the world around it shifted, job options thin out, healthcare gets pricier without employer help, and withdrawals you thought were optional become mandatory. Timing matters, and in 2025 the labor market isn’t the layup it was a couple years ago.

Here’s the before-and-after most people underestimate: before a layoff cycle, you can skim small withdrawals while you still snag side income or part-time work, maybe keep your employer plan a few months longer. After layoffs spread, the “bridge” jobs vanish first, COBRA or marketplace premiums hit your cash flow, and you’re drawing more from your portfolio earlier. That’s the math shift, same nest egg, less flexibility. I’ve watched clients coast through soft markets because they had a cushion of income, and I’ve watched others get pinched simply because part-time gigs evaporated at the wrong moment. Honestly, I’ve been surprised by how fast the optional line items stop being optional.

A quick refresher on what ugly unemployment can look like, because history still matters when the headlines get loud: the U.S. unemployment rate hit 10.0% in October 2009 (BLS) and then 14.7% in April 2020 (BLS). Those weren’t just scary numbers, they punished new retirees who happened to start withdrawals as job income disappeared and markets were shaky. Some had to lock in losses to pay bills, which is exactly the trap we’re trying to avoid. I still remember sitting with a couple in late 2009 who said, “we’ll just pull a little more for a year,” and that “little more” became the new baseline. Happens fast.

What’s the risk under the hood? Sequence risk, in plain English: if you get bad returns early in retirement while you’re withdrawing, you shrink the base that future growth compounds on. Same average return over 20 years can lead to very different outcomes depending on which years are bad. Quick example: a $1,000,000 portfolio down 15% becomes $850,000. A 4% withdrawal is $40,000 either way, but now that $40,000 is 4.7% of $850,000. You’re pulling a bigger slice from a smaller pie. Do that twice and the compounding headwind starts to bite. I know, this might be getting complicated, but the point is simple: bad early returns + withdrawals = a compounding problem.

Why does high unemployment change the retirement math even if stocks don’t crash? Because income volatility does the damage. Lose employer benefits and you may need to fund months of COBRA or exchange premiums out of pocket. Lose the option to grab a 10-15 hour a week role, and the $1,000-$2,000 you thought you’d earn monthly has to come from the portfolio instead. That forces higher withdrawals precisely when you want to be gentle with the principal. It’s the timing that hurts, not just the market level.

So, the big questions we’ll tackle right now, while labor headlines feel heavier in 2025: should you delay retirement during high unemployment (yes, the “should-i-delay-retirement-during-high-unemployment” question), or at least tweak the early-year withdrawal plan? We’ll map the stress points, healthcare, cash buffers, part-time work realities, and sketch safeguards so your plan doesn’t rely on job openings that disappear first when the economy tightens. Actually, let me rephrase that: we’ll keep your options open so you don’t have to panic if conditions get worse before they get better. Anyway, that’s the frame.

Bottom line: You don’t need a market crash to derail the first years of retirement. A weak labor market can do it quietly by removing your safety valves and pushing withdrawals up right when sequence risk is highest.

What high unemployment actually does to your money

Look, unemployment isn’t just a headline, it changes the math on how long your cash has to last and how much risk your portfolio can actually carry. When jobs are scarce, re-employment takes longer and the fallback options get pricier. Honestly, I wasn’t sure about this either the first time I modeled it for a client during 2009, but the mechanics haven’t changed much.

Longer gaps = more self-funding. In a weak labor market, fewer openings and more applicants stretch out job searches. In 2024, the average duration of unemployment was about 19 weeks per BLS data, a national average that gets worse for older workers and during recessions. If you’re 60-64 and planning to retire soon, a layoff doesn’t just mean six months of belt-tightening; it can mean a year or more of self-funding. And unemployment insurance only replaces around 40-50% of prior wages (up to a state cap) and typically lasts up to 26 weeks. After that, you’re on your own. I might be oversimplifying, but the takeaway is: cash flow coverage needs to assume a longer bridge when hiring slows.

Healthcare gaps before Medicare. Employer coverage ending at 60-64 turns into real dollars fast. COBRA is usually available for 18 months, but you pay the full premium plus up to a 2% admin fee. The 2024 KFF Employer Health Benefits Survey puts the average annual employer family premium at $24,275; under COBRA you’re paying essentially the whole thing yourself. Even single coverage isn’t cheap. Yes, ACA plans and premium tax credits can help depending on income, but the sticker price can still be a shock if you just lost a paycheck. This actually reminds me of a client who planned to use part-time work to cover premiums… then the part-time hours evaporated when demand slowed. Anyway.

Markets, recessions, and sequence risk. Bear markets often overlap with recessions. You don’t need exact odds to feel the pain: withdrawing more while prices are down raises failure risk for a 30-year plan. If unemployment rises and you can’t find work, you may pull from the portfolio right when it’s down, classic sequence risk. That’s why I keep hammering on withdrawal flexibility in the first 5 years. Reduce the fixed draw, or set a guardrail (like pausing inflation adjustments or trimming 10-20% in down years). And yes, that sounds annoying, but it buys longevity.

Bonds, annuities, and the rate backdrop. Higher yields help your income math but raise timing risk. The 10-year Treasury yield averaged roughly 3.9% in 2023 and about 4.3% in 2024 (Federal Reserve data). That backdrop lifted single-premium immediate annuity (SPIA) payouts in 2023-2024 compared with 2021-2022, improving guaranteed income potential. The catch is volatility: if you’re forced to buy or sell on a bad week, you crystallize it. So, the thing is, bonds can both cushion and occassionally surprise you with price swings if you need to liquidate. I was going to get into duration math here, but, more important is matching maturities to spending windows.

Taxes when work dries up. Income drops can lower your tax bracket and open Roth conversion windows, but watch ACA premium credits and, later this year, any bracket creep from unexpected capital gains. Conversions in a down market can be smart if you’ve got cash outside the IRA to pay the tax. Actually, let me rephrase that: conversions are only helpful if they don’t create a new cash problem.

Emergency fund target during high unemployment

• 12-24 months of baseline expenses is safer than the usual 6 months if you’re within ~5 years of retirement or already retired. Baseline means mortgage/rent, utilities, food, premiums, and deductibles, not the vacation fund.
• Stagger it: 3-6 months in high-yield savings/treasuries for immediate needs; another 6-12 months in a short-term ladder (T-bills/short bond fund); and consider a home equity line as a backup you hope to never draw.
• Keep COBRA/ACA premiums and out-of-pocket maxes in that math. Healthcare is the swing factor before Medicare at 65.

What to do if you’re asking “should I delay retirement during high unemployment?” If you can keep working even part-time, you reduce withdrawals during the riskiest years and keep health coverage options open. If you can’t, then tighten the first-year draw, push any big one-time spending to later in the cycle, and price an annuity quote while rates are still decent. It won’t be perfect… but that’s just my take on it.

Quick recap mechanics: Longer job searches (BLS shows 2024 jobless spells averaged ~19 weeks), higher pre-Medicare health costs (KFF 2024 family premium $24,275), and market drawdowns often pairing with recessions mean you may withdraw more at the worst time. Higher rates in 2023-2024 helped bond income and annuity payouts, but volatility raised timing risk. Build a 12-24 month cash runway to avoid forced selling and give yourself choices.

Should you delay? A simple checklist you’ll actually use

Here’s the thing: you don’t need a 40-tab spreadsheet to decide whether to delay a year. You need a short list, a pen, and a little honesty. Mark each item green (solid), yellow (maybe), or red (problem). If most boxes are green, delaying likely pays. If they skew red, build a resilient retire-now setup and keep risk on a short leash.

• Cash runway (18-24 months): Could you cover 18-24 months of expenses without selling stocks at a loss? Include mortgage/rent, insurance, taxes, healthcare, and a stress buffer for, say, a car repair. Remember, BLS data shows average unemployment spells were ~19 weeks in 2024, call it 5 months, so a year or two of cash/short bonds gives you breathing room if hiring is soft. Green if funded, yellow if 12-17 months, red if less than a year.
• Healthcare to 65: Can you bridge to Medicare via COBRA (up to 18 months) or an ACA plan? Price it for real, not vibes. KFF reports the average family premium hit $24,275 in 2024; your number may differ, but it’s a good gut-check. Also, enhanced ACA subsidies are extended through 2025 under the Inflation Reduction Act, run the marketplace with your likely income; lower MAGI often means lower premiums after subsidies. Green if affordable and lined up, yellow if costs are fuzzy, red if you’re guessing.
• Debt triage: Any variable-rate or high-interest balances? Those eat safe withdrawal room. Prioritize paying down cards, personal loans, and HELOCs before leaning on fixed income. Green if high-cost debt is gone, yellow if it’s manageable, red if double-digit APRs linger.
• Income options (realistic): In your field, could you pick up part-time or consulting work during a weak hiring stretch? Be brutally honest. If the phone stops ringing when markets wobble, assume half the hours you “think” you can get. Green if you have line-of-sight to gigs with names and rates, yellow if it’s speculative, red if it’s wishful thinking. And no, your old boss “maybe needing help” doesn’t count as a contract.
• Social Security timing: Can you afford to delay toward 70? Per SSA rules, benefits grow roughly 8% per year after your Full Retirement Age until 70. If delaying reduces portfolio withdrawals during a downturn and boosts survivor benefits, that’s a double win. Green if your runway covers the delay, yellow if you need a partial delay, red if you’d be forced to claim early to pay basic bills.
• Spouse/partner backstops: Is there alternate healthcare or income you can tap temporarily? Sometimes the best bridge is your partner’s plan or a short stint of their W-2 income. Green if there’s a credible backstop, yellow if it’s conditional, red if none.
• Portfolio mix and safe bucket: If stocks are down, do you have 1-3 years in cash/ultra-short/short Treasuries or CDs to avoid selling equities? With rates still higher than they were in 2021, the safe bucket actually pays a bit. Green if bucket is set, yellow if partial, red if equities would fund month two. Look, I get it, rebalancing is annoying, but forced selling is worse.

Score it quick: 5-7 greens: delaying likely improves lifetime math. 3-4 greens: mixed, tighten spending, consider part-time income, and set a true safe bucket. 0-2 greens: prep a retire-now plan that minimizes sequence risk, maybe blend in an annuity quote while rates are still decent.

So, what if you’re two greens and a pile of yellows? Actually, let me rephrase that… you might be close. Firm up the healthcare numbers (those ACA subsidies through 2025 are real cash), pay down the ugly debt, and extend the runway with CDs or T-bills. And if markets are choppy, happens every other quarter it seems, prioritize flexibility: smaller first-year draw, push discretionary travel, and reserve the right to pick up a few months of work. It’s not heroic, it’s just math you can live with.

One last note: earlier this year and frankly still now, Treasury yields are elevated compared with 2020-2021, which helps the safe bucket and annuity quotes. But don’t over-improve. If you can cover 18-24 months, secure healthcare to 65, and avoid selling equities into weakness, you give yourself options. And options, during a shaky labor market, are basically oxygen. I’d rather you overfund the runway and underpromise the income you expect to recieve from consulting. That small bit of caution tends to pay for itself.

Timing levers: Social Security, Medicare, and taxes (this is where the money is)

So, coordination beats guesswork here. If you’re thinking about retiring during a softer job market, the order and timing of a few decisions can add, no joke, six figures over a retirement. I’ve seen it happen with clients who simply sequenced things better.

Social Security: Claiming before your Full Retirement Age (FRA) while you keep working triggers the earnings test. For 2024, the Social Security Administration’s earnings test threshold was $22,320, with $1 of benefits withheld for every $2 you earn above that; in the year you hit FRA, the higher threshold was $59,520 with $1 withheld for every $3 above that. Those are 2024 figures, the exact 2025 numbers move a bit each year, but the mechanics are the same. Delaying past FRA still raises your check about 8% per year until age 70. Look, the earnings test isn’t a tax in the long term (benefits are adjusted later), but short-term cash flow matters when unemployment is higher and hours are choppy.

Couples strategy: If one spouse has the bigger earnings record, the higher earner delaying to 70 often improves the survivor benefit down the road. That’s not romance, that’s math. I had a couple earlier this year who wanted to both claim at 64 “just to be safe.” After we priced the survivor scenario, they flipped: lower earner claimed first, higher earner delayed. Their projected survivor check was ~25-30% higher for life because of that one move.

Medicare and ACA: Medicare starts at 65. If you retire earlier, you need to bridge coverage and avoid penalties. The Part B late enrollment penalty is 10% for each full 12 months you could’ve had Part B but didn’t (unless you had qualifying employer coverage). Part D has a penalty, too. If your employer has fewer than 20 employees, their plan may not be considered primary, don’t get cute here; verify what’s “creditable coverage.”

For pre-65 health insurance, ACA subsidies are based on MAGI. Thanks to the American Rescue Plan and the Inflation Reduction Act extension, the cap on benchmark-plan premiums is 8.5% of household income through 2025. That’s real money. Lower income years, because you’re partially employed or taking a sabbatical, can slash premiums. Honestly, I wasn’t sure about this either the first year the enhanced credits hit, but the difference on a 60-year-old couple has been $6-$10k per year in cases I’ve seen. Unemployment benefits count in MAGI, by the way, so be mindful if you’re claiming UI checks while picking up freelance work.

Tax bracket management: Low-income “gap years” (post‑retirement, pre‑RMD/SS) are prime for Roth conversions and capital gains harvesting. Jargon alert: “harvesting” just means selling appreciated assets when your tax rate is low and immediately buying back the position (watch wash-sale rules only apply to losses) to step up basis. The 0% long-term capital gains rate applies up to income thresholds that adjust annually; in 2024 it was up to $94,050 of taxable income for married filing jointly and $47,025 for single filers. Even if the 2025 brackets shift, the idea holds: fill the lower brackets on purpose. I know it feels weird to create taxable income, but paying 0-12% now can beat 22-24% later when RMDs kick in.

RMDs and delaying work: Required minimum distributions are age 73 now (SECURE 2.0, enacted 2022). Delaying retirement can help or hurt depending on accounts. There’s a “still-working” exception for your current employer’s 401(k), you can often delay RMDs there until you actually retire, but not for IRAs. Translation: rolling old 401(k)s into your current plan might simplify RMD timing, or not, depending on fees and investment options. This actually reminds me of a client who retired mid-December to push one more year of the exception… saved them a forced distribution the next year.

Putting it together during a weaker job market: If unemployment is higher and your hours are lumpy, consider:

• Delay Social Security if you can cover cash flow; avoid the earnings test bite while working.
• Use partial work years to drop MAGI and maximize ACA credits through 2025.
• Bridge to Medicare at 65 without gaps; confirm creditable coverage to dodge penalties.
• Schedule Roth conversions in the 12% or 22% brackets, then harvest gains up to the 0% window where possible (year by year).
• Mind the calendar: retiring in January vs. October changes MAGI, ACA subsidies, and the size of your conversion room.

Quick gut-check: If your after-tax income is going to fall anyway due to fewer shifts or a layoff, turn that into an opportunity year for taxes and healthcare costs, not a scramble.

Anyway, none of this is about being heroic. It’s sequencing. Keep working if the job is good, sure, but don’t claim benefits in a way that kneecaps subsidies or fills the wrong tax brackets. If the labor market gives you a slow year, use it. That’s how you get paid from timing… but that’s just my take on it.

Bridge tactics if you pause retirement 6-24 months

So, if you hit the brakes for a year or two, make it pay. Optionality is the goal, protect future withdrawals and keep your tax/benefit doors open, not closed.

Lock healthcare. Price your options side-by-side: COBRA can run up to 102% of the employer’s total premium (federal rule), sometimes 105% during extensions. ACA marketplace Silver plans keep the American Rescue Plan/IRA enhanced subsidies through plan year 2025, which means no strict 400% FPL “cliff.” Silver’s base actuarial value is ~70%, and if your income lands between 100-250% of the Federal Poverty Level, cost-sharing reductions can boost that to 73%/87%/94% (2025 rules). Check your doctors and meds in-network, seriously, formularies move around more than you’d expect. Quick reality: in 2024, the median benchmark (second-lowest-cost) Silver premium barely budged nationally, while T-bill yields made cash feel competitive, so the calculation isn’t one-and-done; re-price each open enrollment.

Income patchwork. In soft labor markets, brand prestige won’t pay the mortgage. The JOLTS data shows openings down from a 12 million peak in 2022 to under 9 million by late 2024, which made contracting more “take it when it comes.” Aim for flexible consulting, seasonal roles, or phased retirement. I’ve seen clients take two 3-month gigs and net 70-80% of prior pay without the stress of full-time politics (anecdotal, but it happens). Keep MAGI managed to keep ACA subsidies intact.

Cash flow ladder. Hold 12-24 months of spending in cash/T-Bills and refill quarterly. During 2024, 3-12 month T-bills hovered near 5%, and they’ve stayed above ~4% for much of 2025, good enough to carry you while equities wobble. The simple point, said in too many words: you don’t gotta sell stocks into a slump if your short-term budget is already parked in safe stuff.

Portfolio tune-up. Harvest losses in down years to bank capital loss carryforwards; rebalance to targets instead of guessing based on headlines (I’m still figuring this out myself some days). Keep risk aligned with your need to take risk. If your plan only requires a 4% real return, don’t run an 85/15 stock/bond mix because a pundit sounded confident.

Consider SPIAs for guaranteed income. Payouts improved as rates rose in 2023-2024. Industry quotes in 2024 for a 65-year-old often showed ~$6,800-$7,500 annual income per $100,000 premium, versus roughly ~$5,000 back in 2021. Get multiple quotes, compare period-certain vs life-only, and mind insurer ratings.

Credit backstop. Pre-arrange a HELOC before you quit. Lenders typically cap combined loan-to-value around 80-85%. Treat it like a standby umbrella, use only if needed, then pay down fast.

Benefit timing calendar. Put real months on the page: Medicare Initial Enrollment is a 7-month window around your 65th birthday; special enrollment rules apply if you keep employer coverage. Schedule Social Security decision check-ins annually; each year you delay after Full Retirement Age to 70 increases your benefit about 8% per year. Block Roth conversion windows in Q4 when your income picture is clearer, current law has the 2018 tax brackets sunsetting after 2025, so 2025 might be your last “low bracket” year. And, anyway, write it all down, missed windows are expensive.

Look, a 6-24 month pause isn’t failure. It’s a call option on better timing. Pick the flexible income, secure the healthcare, keep cash high, and keep your risk honest, not heroic. Actually, let me rephrase that: make the delay profitable on purpose.

If you retire anyway during high unemployment, make it resilient

So, some of you are still going to pull the ripcord now. Fine. If you’re retiring into a soft labor market, build a plan that can take a few punches without knocking out your future options.

Guardrail withdrawals. Start lower and give yourself rules. A 3.3%-3.8% initial withdrawal with guardrails (think Guyton‑Klinger style) is a good target in rough economies. The gist: pick an initial rate, then set bands. If your portfolio rises enough that the current withdrawal rate falls below, say, 3.0%, you give yourself a raise. If markets drop and your effective rate climbs above, say, 4.5%-5.0%, you trim by 10%-20% until you’re back inside the rails. Guyton & Klinger’s research (2006; updated applications appeared in the 2010s) showed these rules materially reduced failure rates while keeping pay cuts rare. Honestly, I wasn’t sure about this either the first time I used it with a client, but behaviorally it works because the rules are decided in calm moments, not in panic.

Use a bucket setup. Separate time horizons so you’re not forced to sell stocks after a bad year:

• Bucket 1: 1-3 years of cash and short T‑Bills.
• Bucket 2: 3-7 years in high‑quality bonds.
• Bucket 3: The rest in diversified equities.

Speaking of which, short T‑Bills actually paid investors to wait recently, 3‑month bills peaked near 5.5% in 2023 and stayed above 5% much of 2024 (U.S. Treasury data). That cushion helps when unemployment is high and stocks are moody.

Bridge and delay Social Security. Use cash and bonds as a “bridge” so you can delay claiming. Each year you wait after Full Retirement Age to 70 increases your benefit by about 8% per year (SSA). Locking in a higher, inflation‑adjusted lifetime check is real risk management, not theory.

Inflation protection. Build some inflation hedging into the bond side. Include TIPS or I‑Bonds; for essential expenses, a simple TIPS ladder that matches your next 10-15 years of must‑pay bills can be a sleep aid. Real yields near 2% on intermediate TIPS were available in late 2023-2024 (Treasury), which, if I remember correctly, we hadn’t seen in a long time. Anyway, the point is you can pre‑fund real spending.

Sequence shields. When markets drop, pause the optional stuff, big trips, kitchen remodels, gifting, then resume when your portfolio recovers. This isn’t austerity; it’s buying flexibility with timing. For context, unemployment hit 10.0% in 2009 (BLS) while the S&P 500 fell about 37% in 2008 (total return). Retirees who could throttle discretionary spending during that stretch came out far better. Actually, let me rephrase that: they kept their plan intact while others were forced to sell low.

Tax smoothing. Don’t donate extra tax to the IRS by accident:

• Partial Roth conversions in lower‑income years before RMDs begin. SECURE 2.0 has RMDs starting at 73 for many, and 75 for those born 1960 or later.
• Asset location: place bonds in tax‑deferred accounts and broad‑market equities in taxable for better tax‑efficiency; equities get qualified dividends and long‑term capital gains treatment.
• Remember the 2018 individual tax cuts are scheduled to sunset after 2025, so 2025 may be your last “low bracket” year for conversions if nothing changes.

Guardrails + buckets + a Social Security bridge + tax smoothing = a plan that bends without breaking.

One more thing I should clarify: a lower starting withdrawal isn’t a life sentence. With guardrails, you give yourself a raise when markets cooperate. And if conditions get weird, like 2020‑style unemployment spikes (14.7% in April 2020, BLS), you’ve got cash, bonds, and spending brakes to avoid forced equity sales. I think the goal here is simple: preserve the right to change your mind later. You can always spend more. Recovering from spending too much too soon is the hard part… and you don’t want to learn that lesson the expensive way.

Frequently Asked Questions

Q: Should I worry about retiring this fall if unemployment keeps climbing?

A: Short answer: don’t panic, but tighten the plan. Look, the risk isn’t just markets, it’s sequence-of-withdrawals when side income disappears and healthcare costs jump. If you want a crisis‑proof plan, I’d:

• Hold 12-24 months of essential expenses in cash/short Treasuries so you’re not forced to sell risk assets after a drop.
• Cap your initial withdrawal around 3.0%-3.5% this year, then use guardrails (e.g., trim 10% of your dollar withdrawals if portfolio falls 20%).
• Line up healthcare before you give notice; COBRA or ACA can whack cash flow.
• Keep optional expenses truly optional for the first 12 months; set a “resume spend” trigger like portfolio back over last year-end value.
• Have a Plan B income line, seasonal/contract gigs you can actually land in a soft market. I watched people in 2009 and 2020 get squeezed not because their nest egg vanished, but because their bridge jobs evaporated. So, build flexibility now, then re-check in 3-6 months.

Q: How do I adjust my withdrawal rate if my part‑time ‘bridge’ job disappears?

A: Mechanically, make three tweaks:

1. Reset withdrawals off a lower “essential only” budget for 6-12 months.
2. Switch to a guardrail method: target 3.25% but cut distributions 10% if your portfolio falls 20% from its high; give yourself a raise only when you hit a new high.
3. Fund the gap from a cash/T‑bill bucket that covers 18 months of basics. Refill it only after positive return years. Taxes: in the low‑income year, consider small Roth conversions to the top of your 12% or 22% bracket without triggering ACA subsidy cliffs. Also harvest capital losses to offset gains. Order of withdrawals (general): taxable cash -> taxable assets with gains/loss mgmt -> modest Roth conversion while keeping ACA credits -> then IRA. Keep it boring and you’ll avoid locking in losses.

Q: What’s the difference between delaying Social Security vs tapping my IRA first during a weak job market?

A: Trade‑offs are real.

• Delaying Social Security: benefits grow ~8% per year after Full Retirement Age up to 70. That’s a built‑in, inflation‑adjusted annuity. It also reduces longevity risk. Downside is you need to fund those years from savings.
• Tapping IRA first: gives you cash now and can lower future RMDs if paired with Roth conversions. But pulling from a down market can crystalize losses. How I usually frame it: if you can cover basics from cash and short Treasuries for 2-4 years, delaying Social Security to 67-70 is often worth it. Use those low‑income years for Roth conversions up to the 22% bracket while staying under ACA subsidy cliffs. If markets are deeply negative and cash is thin, take a smaller Social Security claim earlier for stability and reduce portfolio draws, then reconsider suspending benefits later if you get back to work. It’s not all‑or‑nothing.

Q: Is it better to stay on COBRA or jump to an ACA plan if I retire mid‑year?

A: It depends, yeah, annoying answer, but here’s the practical checklist. Choose COBRA if:

• You’ve already met your deductible/out‑of‑pocket this year, your doctors are in‑network, and premiums are manageable. COBRA is usually 102% of employer cost and can last up to 18 months. Choose ACA if:
• Your 2025 household MAGI will qualify for premium tax credits. The enhanced ACA subsidies are in effect through 2025, and Silver plans can include cost‑sharing reductions if income is roughly 100%-250% of FPL. Lower MAGI = lower premiums. Tactics:
• Control MAGI by living off cash, selling high‑basis taxable assets, and keeping Roth conversions modest so you don’t blow the subsidy.
• Compare total‑year math: premiums + expected claims + network access. Sometimes ACA beats COBRA by thousands, but not if you’ve already hit the plan’s max out‑of‑pocket.
• Timing: you have a special enrollment window when you lose employer coverage. Don’t miss it. And watch the age‑65 handoff, IRMAA for Medicare is based on MAGI from two years prior, so keep future premiums in mind. Bottom line: run both quotes side‑by‑side for the rest of 2025, then revisit in November during open enrollment for 2026.

@article{should-you-delay-retirement-during-high-unemployment,
    title   = {Should You Delay Retirement During High Unemployment?},
    author  = {Beeri Sparks},
    year    = {2025},
    journal = {Bankpointe},
    url     = {https://bankpointe.com/articles/delay-retirement-high-unemployment/}
}