October 1, 2008

To Retire Early, You Must Get This Move Right

Paul Weber has nearly every aspect of his retirement in place. He knows when it will start: The 56-year-old, who earns some $103,000 a year doing graphic design for investment research firm Morningstar, plans to empty his desk by year's end.

He knows where he'll live: with his girlfriend Nadia in their Fox Lake, Ill. home. He knows how he'll finance it: with the $900,000 he's saved. And he knows what he'll be doing: After years of squeezing in his passion for oil painting during odd hours, Weber imagines spending his days in the studio. There's just one part of this picture-perfect retirement that Weber hasn't figured out yet: what he'll do for health insurance.

Retirement will mean the end of Weber's employer-provided health coverage. He can stay on his company's plan for 18 months by paying the full premium, thanks to the federal law known as COBRA. That would take him only to age 58, far short of when he qualifies for Medicare at age 65.

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