Can You Retire at 60 With $900,000? Don't Forget Health Insurance Costs

A retirement plan that looks adequate can fail when health insurance is priced for the years before Medicare eligibility. Marketplace Silver premiums for a 60-year-old can range from about $850 to $1,200 per month, totaling roughly $12,000 per year, or $60,000 over five years. Estimated deductibles and out-of-pocket spending can add about $4,800 per year, adding roughly $24,000 more. Combined costs can reach about $84,000, and healthcare inflation may push this higher. Premium tax credits depend on annual MAGI, which should be kept under about 400% of the federal poverty level to prevent subsidy collapse. Withdrawals from traditional IRAs increase ordinary income and can reduce or eliminate subsidies, so withdrawal sequencing and account selection matter.

"A Silver plan for a 60-year-old runs roughly $850 to $1,200 per month gross premium depending on ZIP code. At a $1,000 monthly average, that is $12,000 a year, or $60,000 across five years. Add Kaiser Family Foundation's marketplace estimate of $4,800 per year in deductibles and out-of-pocket spending, and you reach $24,000 more. The potential combined cost: $84,000."

"Healthcare inflation could push that figure even higher. Core PCE sat near 129 in March 2026, in the top decile of its 12-month range. Premiums historically track at or above general inflation, so the $84,000 figure is closer to a floor than a ceiling."

"The single most important number in this scenario is your modified adjusted gross income (MAGI) each year of the bridge. ACA premium tax credits phase out based on MAGI. Keep MAGI under roughly 400% of the federal poverty level (about $60,240 for a single filer in 2026) and subsidies can collapse most of that $60,000 premium bill. Pull a $90,000 traditional IRA distribution to fund living expenses, and you may write the full premium yourself."

"Every withdrawal has a tax cost and a subsidy cost. A dollar from a traditional IRA shows up as ordinary income twice: once for the IRS, once for healthcare.gov."

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