If you retire before 65, you face a healthcare-coverage gap that can run $15K–$40K per year per couple. The three main paths — COBRA, ACA marketplace, or HSA-funded high-deductible plans — produce wildly different costs depending on your income strategy. Now more than ever: the enhanced ACA subsidies expired Dec 31, 2025, and the 400% FPL "subsidy cliff" is back in force for 2026.
The biggest move most early retirees miss: ACA marketplace subsidies are tied directly to your Modified Adjusted Gross Income (MAGI). And starting in 2026, the math is sharper — the IRA-enhanced subsidies expired Dec 31, 2025, and the 400% FPL "subsidy cliff" is back. Cross 400% FPL by a dollar and you lose the entire premium tax credit, often a $10K–$25K hit. That makes MAGI management the single highest-value lever in the pre-65 plan.
Which dollars you pull matters: Roth withdrawals don't count toward MAGI. Traditional IRA / 401(k) withdrawals do. Long-term capital gains do, at preferential rates. Tax-loss harvesting can offset. Strategic Roth conversions before ACA-bridge years (or holding them off until Medicare) is real money.
The healthcare bridge is the most expensive overlooked line item in early retirement. With the cliff back, it's also the most controllable — if you plan the income strategy around it.
The other lever: HSAs. If you're still working and eligible, max-fund an HSA every year. The triple tax advantage (deductible going in, no tax on growth, no tax on qualified withdrawals) makes it the most efficient retirement-medical savings vehicle that exists. After age 65 the funds can be withdrawn for any purpose, taxed as ordinary income.
If you're planning to retire before 65 (or already there), this is a high-value 30-minute conversation.