Early Retirement - Financial Freedom (Investing, Tax Planning, Retirement Strategy, Personal Finance)

How To Save On Healthcare In 2026 (If Retired)

• Ari Taublieb, CFP®, MBA • Episode 284

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Feeling like healthcare makes early retirement impossible? It’s a common belief, but often fixable with thoughtful income planning. Premium tax credits under the ACA aren’t vanishing; the enhanced credits are scheduled to sunset after 2025, and the pre-2021 rules (including the ~400% FPL income cap) are slated to return in 2026 unless Congress acts. The takeaway: managing MAGI matters.

In this episode, Ari Taublieb, CFP®, walks through a practical, illustrative case: a 60-year-old couple with ~$1.55M spread across taxable, pre-tax, and Roth accounts. You’ll see how the source of withdrawals (e.g., harvesting from taxable accounts vs. large pre-tax distributions) can change MAGI—and therefore subsidy eligibility—potentially lowering Marketplace premiums materially. You’ll also learn key HSA rules after age 65 (non-medical withdrawals are taxed as income but no 20% penalty) and what’s changing for HSAs in 2026: Bronze and Catastrophic ACA plans are slated to be HSA-eligible, expanding access to tax-advantaged saving.

You’ll leave with a playbook: align cash-flow needs with tax brackets, plan around the 400% FPL threshold, coordinate Roth/pre-tax/taxable withdrawals, and revisit the plan annually as laws and income shift. 

Ready to pressure-test your numbers and retire with more confidence? Subscribe to the Early Retirement Podcast.

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The strategies, case studies, and examples discussed may not be suitable for everyone. They are hypothetical and for illustrative and educational purposes only. They do not reflect actual client results and are not guarantees of future performance. All investments involve risk, including the potential loss of principal.

Comments reflect the views of individual users and do not necessarily represent the views of Root Financial. They are not verified, may not be accurate, and should not be considered testimonials or endorsements

Participation in the Retirement Planning Academy or Early Retirement Academy does not create an advisory relationship with Root Financial. These programs are educational in nature and are not a substitute for personalized financial advice. Advisory services are offered only under a written agreement with Root Financial.


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Ari Taublieb, CFP ®, MBA is the Chief Growth Officer of Root Financial Partners and a Fiduciary Financial Planner specializing in helping clients retire early with confidence.


Speaker 1:

I cannot retire early because of healthcare. I hear that all the time and you're about to shift your thinking on it. Because I'm gonna give you an example that's gonna show you how you can actually minimize your costs, not just this year, 2025, but 2026, when many of you guys are most worried because of the legislation changes. So if you're unaware, you might hear a friend or neighbor or potential early retiree going. Can you believe it? Subsidies are going away. They're not going away. Okay, premium tax credits are still there. The difference is, if you're above 400% of the federal poverty line, you will not get those subsidies. So I'm going to give you an example to understand this in more detail today and hopefully you don't worry as much when it comes to healthcare. Now, what I'm not saying is that I have some magic pill that you can take that all of a sudden reduces your healthcare costs. What I'm saying is you can plan for it intentionally and it can be way less than you think. Now I do have clients that are spending $20,000, $30,000 a year in healthcare costs, and I also have clients that are spending a few hundred bucks a month and they have great healthcare coverage and millions of dollars and they're withdrawing income with complete intention, and they're in a good spot to retire early and not run out of money. So that's what I'm going to go over in today's episode.

Speaker 1:

My name is Ari. I'm the chief growth officer here at Root Financial. I love what I get to do, which is help people retire early with confidence. I'm also a CFP, a certified financial planner, which is not the reason you should listen to me. I often say how many doctors would you never let touch your body? Probably a lot of them. Now, I'm grateful for doctors because they put my hips back together so I could play soccer, but and I love playing soccer I play four or five days a week. I truly love it, just like I like making content for all of you guys, but I also know there's lots of CFPs that I would never let manage a dime of my money. So I hope you listen and resonate with the style that I like to communicate in. So, with that being said, let's start hopping in.

Speaker 1:

I have an example queued up that I'm going to go over. Whether you are listening on the podcast app or watching on YouTube, if the content I make resonates, please like this and share it with those that you want to retire early with. So an easy way to look at this and a good reminder the subsidies are not going away in 2026. What's changing is, if your income goes over 400% of the federal poverty line, you'll lose the subsidy entirely. So those advanced premium tax credits that people talk about you just need to manage your income sources wisely, and I'm going to show you how to do that today. No matter, once again, where you're listening, you're going to get value from this. I personally listened to a lot of content on podcasts, and sometimes I watch on YouTube, and it varies, and when they are able to articulate it in a way that, no matter where I listen, I find that appreciated. So that's what I try to do for all of you.

Speaker 1:

So here's an example that we're going to go over and keep it nice and simple. Let's pretend you're 60. You want to retire. You've thought through purpose and how you're going to spend your time. We're just looking at the numbers today.

Speaker 1:

Financially, what do you need to know when it comes to healthcare planning? So let's pretend you want to spend $70,000 a year in retirement. Just an example you're 60, your spouse is 60. And I'm just taking some assumptions here. If it's not your exact numbers, which it will not be. You can replace it, do the math on your own, use a software like the one I talk about and you can get really clear on what you can expect in retirement. So assume you have a million dollars in a traditional IRA Most of you have a 401k you retire, you move it to an IRA so you can invest however you see fit. I'm going to assume 400,000 in a brokerage account I also like to call that a superhero account Then I'm going to assume 50 in an HSA and 100 in a Roth IRA. So we're looking at a total here of $1,550,000.

Speaker 1:

Now, in 2025, this year, here's how they could potentially manage their health care. So, once again, how much do they need to live? $70,000. That's $70,000 after taxes adjusted for inflation. Now many of you are going well. How could they spend $ and still travel and especially go first class and do a home remodel and pay for kids college? I'm just keeping it simple. Today you can once again manipulate this as you see fit for you and I want you to do that. So this couple needs 70,000 to live If they choose to do the following I'm not saying they should, but if they choose to pull $50,000 from a brokerage account, I'm going to assume that they don't have all gains, meaning I'm assuming they didn't put $1 to Apple stock which grew to $50,000.

Speaker 1:

I'm going to assume 40,000 is the principal. When you take your own money out, you don't pay taxes. You already paid money on that Pay taxes. Excuse me, the 10,000 difference. That's called a taxable gain. That's what you do pay taxes on. So 40,000 is your basis. We pull that, boom, we got 40 right away. Easy, 10,000 we pay taxes on. And I'm going to assume they're going to pull from an IRA, 20,000. So 10 gains, 20 from the IRA. Now, remember, those are taxed differently. When you pull from an IRA, that's ordinary income. When you pull from a brokerage account with gains, that's capital gains. So before I get too complicated, that's the highest I'm going to go today, I promise. So that's 30,000 of what's called MAGAI. That's what I call it Modified Adjusted Gross Income. So $30,000.

Speaker 1:

Since the cliff is suspended this year, they qualify for premium tax credits even though their income is below 400% of the federal poverty line. Now, that's why they're getting it. So their net health insurance costs might be could be $2,000 a year. They could legitimately be spending 200 bucks. 400 bucks, I mean, that is not a lot when it comes to healthcare costs, especially for, you know, if they're going to retire at 60, it's the next five years of that. So that's 2,000 a year instead of legitimately what could be 2,000 a month in some cases. So that's a big deal.

Speaker 1:

Now pretend they keep the exact same situation and in 2026, they're wondering what do I do with health care? Well, same withdrawal pattern, the MAGAI. I'm going to call that 30,000 again. Everything's the same. They still qualify because they're under 400% of the federal poverty line. Now what you need to know is 78,880 for a household of two in 2025 terms. So when would they lose eligibility? They would only lose eligibility if they had to take around, say, 90,000 taxable from their IRA. Why that pushes them over the limit. I'm just choosing that number because it's over the limit. And now, all of a sudden, they'd legitimately be paying potentially 15, 20,000, $30,000 in annual premiums for their carefully engineer your income, meaning where you withdraw from, you can manipulate your healthcare to pay way less than if you were to blindly just go.

Speaker 1:

I'm going to pull income Because what I see too often is people go. Well, I have a brokerage account, or let's pretend you don't at all. I have to pull only from my 401k because that's what you've got. You're going to go retire. Let's pretend you're 55. You're going to use the rule of 55 because you turn 55 in the year you want to retire. Your 401k allows for it. You have no other investments and you're taking a hundred thousand dollars. Well, yes, you're going to have significant healthcare costs because you have this 401k and that 401k. You're once again. Again. You're getting a deduction.

Speaker 1:

When you put money in, it grows tax deferred. When you take it out, you have to pay taxes. That's not the case when you're pulling from a brokerage account. If you're pulling from a brokerage account, odds are if you have a hundred thousand, you might have 60,000 of principal there and then 40,000 of what's called a capital gain. So that's what you would be taxed on on capital gains brackets. So that's what's going to go towards understanding your income.

Speaker 1:

So HSA another thing, just to be aware here all bronze ACA plans will be HSA eligible. So that is a benefit there. And so just an example that's 7,500 in technical HSA. So health savings account, which I love. Hsa, triple tax-free Put money in, get a deduction, money grows tax deferred, don't pay taxes. Take money out for healthcare eligible expenses don't pay taxes. Or what many of you often forget which I do not blame you, because I was not aware of this until I was aware of it, that's how we all learn anything is after 65, you can use that HSA for non-healthcare expenses. Now you still have to pay taxes for it. But too many people think, well, it's just only in my HSA. If that just grows and grows, it can only be used for healthcare, which is not true. So that is a cool benefit there.

Speaker 1:

Now, what we want to make sure we're always making light of is this concept of okay, if healthcare is going to be my biggest concern, can I still retire? So what do I recommend? Planning conservatively? I don't know exactly your situation, but if you currently are listening, going gosh, I'm now seeing the value of that superhero account you talk a lot of, because I realized that I could really withdraw income on a schedule to keep my income way lower. Wow, I don't have that. Or I wish I retired earlier and had that, or whatever it may be.

Speaker 1:

Whatever regret or what I call head trash occurs there does not mean that you should not retire, but it does mean that you should look at healthcare planning differently, because if you're pulling from a 401k and you have, let's say, 60,000 that you're pulling, your subsidy or premium tax credit will not be the same. So what we do need to make sure is we're taking into consideration what is worst case scenario. How much could you pay, because we don't know what legislation will do. You need to remain dynamic. It's why I say I don't do financial plans, I do planning, and this is just one consideration. So I recommend having the healthcare dialed in and then going a step further and going okay, how often am I going to buy new cars and what is my health actually like? Am I going to need to go out of pocket to pay for things? How else could something potentially shift my retirement, so that, once you've thought through every single thing, your plan is bulletproof and you don't have to wonder am I going to be okay? So hopefully today's episode was insightful on just the healthcare changes coming. I have tons of different concepts and videos and podcasts on healthcare specifically, which I know is one of all of your largest concerns. So hopefully this alleviates that. And that's it for this episode. See you guys next time.

Speaker 1:

Thank you all, as always, for listening to the Early Retirement Podcast. I love getting to host these shows and make different content for you guys every single week. I've not missed a single week in years and that is because I love getting to do this. Now, please be smart about this. Before you actually execute any strategy that you see me talk about or hear me talk about, should I say Please talk to your financial advisor, your tax preparer, your estate attorney. Please be smart about this.

Speaker 1:

None of this should be construed as financial advice. This is for fun, educational, informational purposes only. Once again, just quick disclaimer here. Guys, please be smart about this. Appreciate you listening, as always, and you can, of course, submit a question on my website, earlyretirementpodcastcom. If can, of course, submit a question on my website, earlyretirementpodcastcom. If you, of course, want me to address a specific case study or topic, I will not promise I can get to it, but I respond to every single person and if I find it will be helpful for a lot of people, I will absolutely make an episode on it, at the very least give you some insight. That's it. Thanks, guys.