How To Save On Healthcare In 2026 (If Retired)

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.

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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.

Episode Transcript

Speaker 1 (00:00):
I cannot retire early because of healthcare.
I hear that all the time andyou're about to shift your
thinking on it.
Because I'm gonna give you anexample that's gonna show you
how you can actually minimizeyour costs, not just this year,
2025, but 2026, when many of youguys are most worried because
of the legislation changes.
So if you're unaware, you mighthear a friend or neighbor or

(00:20):
potential early retiree going.
Can you believe it?
Subsidies are going away.
They're not going away.
Okay, premium tax credits arestill there.
The difference is, if you'reabove 400% of the federal
poverty line, you will not getthose subsidies.
So I'm going to give you anexample to understand this in
more detail today and hopefullyyou don't worry as much when it
comes to healthcare.

(00:40):
Now, what I'm not saying isthat I have some magic pill that
you can take that all of asudden reduces your healthcare
costs.
What I'm saying is you can planfor it intentionally and it can
be way less than you think.
Now I do have clients that arespending $20,000, $30,000 a year
in healthcare costs, and I alsohave clients that are spending
a few hundred bucks a month andthey have great healthcare
coverage and millions of dollarsand they're withdrawing income

(01:02):
with complete intention, andthey're in a good spot to retire
early and not run out of money.
So that's what I'm going to goover in today's episode.
My name is Ari.
I'm the chief growth officerhere at Root Financial.
I love what I get to do, whichis help people retire early with
confidence.
I'm also a CFP, a certifiedfinancial planner, which is not
the reason you should listen tome.
I often say how many doctorswould you never let touch your

(01:24):
body?
Probably a lot of them.
Now, I'm grateful for doctorsbecause 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 Ilike making content for all of
you guys, but I also knowthere's lots of CFPs that I
would never let manage a dime ofmy money.
So I hope you listen andresonate with the style that I
like to communicate in.

(01:45):
So, with that being said, let'sstart hopping in.
I have an example queued up thatI'm going to go over.
Whether you are listening onthe podcast app or watching on
YouTube, if the content I makeresonates, please like this and
share it with those that youwant to retire early with.
So an easy way to look at thisand a good reminder the
subsidies are not going away in2026.
What's changing is, if yourincome goes over 400% of the

(02:08):
federal poverty line, you'lllose the subsidy entirely.
So those advanced premium taxcredits that people talk about
you just need to manage yourincome sources wisely, and I'm
going to show you how to do thattoday.
No matter, once again, whereyou're listening, you're going
to get value from this.
I personally listened to a lotof content on podcasts, and
sometimes I watch on YouTube,and it varies, and when they are

(02:28):
able to articulate it in a waythat, no matter where I listen,
I find that appreciated.
So that's what I try to do forall of you.
So here's an example that we'regoing to go over and keep it
nice and simple.
Let's pretend you're 60.
You want to retire.
You've thought through purposeand how you're going to spend
your time.
We're just looking at thenumbers today.
Financially, what do you need toknow when it comes to
healthcare planning?
So let's pretend you want tospend $70,000 a year in

(02:51):
retirement.
Just an example you're 60, yourspouse is 60.
And I'm just taking someassumptions here.
If it's not your exact numbers,which it will not be.
You can replace it, do the mathon your own, use a software
like the one I talk about andyou can get really clear on what
you can expect in retirement.
So assume you have a milliondollars in a traditional IRA
Most of you have a 401k youretire, you move it to an IRA so

(03:13):
you can invest however you seefit.
I'm going to assume 400,000 ina brokerage account I also like
to call that a superhero accountThen I'm going to assume 50 in
an HSA and 100 in a Roth IRA.
So we're looking at a totalhere of $1,550,000.
Now, in 2025, this year, here'show they could potentially

(03:34):
manage their health care.
So, once again, how much dothey need to live?
$70,000.
That's $70,000 after taxesadjusted for inflation.
Now many of you are going well.
How could they spend $ andstill travel and especially go
first class and do a homeremodel and pay for kids college
?
I'm just keeping it simple.
Today you can once againmanipulate this as you see fit
for you and I want you to dothat.

(03:55):
So this couple needs 70,000 tolive If they choose to do the
following I'm not saying theyshould, but if they choose to
pull $50,000 from a brokerageaccount, I'm going to assume
that they don't have all gains,meaning I'm assuming they didn't
put $1 to Apple stock whichgrew to $50,000.
I'm going to assume 40,000 isthe principal.

(04:15):
When you take your own moneyout, you don't pay taxes.
You already paid money on thatPay taxes.
Excuse me, the 10,000difference.
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 40right away.
Easy, 10,000 we pay taxes on.
And I'm going to assume they'regoing to pull from an IRA,
20,000.

(04:36):
So 10 gains, 20 from the IRA.
Now, remember, those are taxeddifferently.
When you pull from an IRA,that's ordinary income.
When you pull from a brokerageaccount 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'scalled MAGAI.
That's what I call it ModifiedAdjusted Gross Income.

(04:57):
So $30,000.
Since the cliff is suspendedthis year, they qualify for
premium tax credits even thoughtheir income is below 400% of
the federal poverty line.
Now, that's why they're gettingit.
So their net health insurancecosts might be could be $2,000 a
year.
They could legitimately bespending 200 bucks.
400 bucks, I mean, that is nota lot when it comes to

(05:21):
healthcare costs, especially for, you know, if they're going to
retire at 60, it's the next fiveyears of that.
So that's 2,000 a year insteadof legitimately what could be
2,000 a month in some cases.
So that's a big deal.
Now pretend they keep the exactsame situation and in 2026,
they're wondering what do I dowith health care?

(05:41):
Well, same withdrawal pattern,the MAGAI.
I'm going to call that 30,000again.
Everything's the same.
They still qualify becausethey're under 400% of the
federal poverty line.
Now what you need to know is78,880 for a household of two in
2025 terms.
So when would they loseeligibility?

(06:02):
They would only loseeligibility if they had to take
around, say, 90,000 taxable fromtheir IRA.
Why that pushes them over thelimit.
I'm just choosing that numberbecause it's over the limit.
And now, all of a sudden,they'd legitimately be paying

(06:41):
potentially 15, 20,000, $30,000in annual premiums for their
carefully engineer your income,meaning where you withdraw from,
you can manipulate yourhealthcare to pay way less than
if you were to blindly just go.
I'm going to pull income Becausewhat I see too often is people
go.
Well, I have a brokerageaccount, or let's pretend you
don't at all.
I have to pull only from my401k 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 of55 because you turn 55 in the

(07:04):
year you want to retire.
Your 401k allows for it.
You have no other investmentsand you're taking a hundred
thousand dollars.
Well, yes, you're going to havesignificant healthcare costs
because you have this 401k andthat 401k.
You're once again.
Again.
You're getting a deduction.
When you put money in, it growstax deferred.
When you take it out, you haveto pay taxes.
That's not the case when you'repulling from a brokerage

(07:25):
account.
If you're pulling from abrokerage account, odds are if
you have a hundred thousand, youmight have 60,000 of principal
there and then 40,000 of what'scalled a capital gain.
So that's what you would betaxed on on capital gains
brackets.
So that's what's going to gotowards understanding your
income.
So HSA another thing, just to beaware here all bronze ACA plans

(07:46):
will be HSA eligible.
So that is a benefit there.
And so just an example that's7,500 in technical HSA.
So health savings account,which I love.
Hsa, triple tax-free Put moneyin, get a deduction, money grows
tax deferred, don't pay taxes.
Take money out for healthcareeligible expenses don't pay

(08:07):
taxes.
Or what many of you oftenforget which I do not blame you,
because I was not aware of thisuntil I was aware of it, that's
how we all learn anything isafter 65, you can use that HSA
for non-healthcare expenses.
Now you still have to pay taxesfor 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

(08:27):
healthcare, which is not true.
So that is a cool benefit there.
Now, what we want to make surewe're always making light of is
this concept of okay, ifhealthcare is going to be my
biggest concern, can I stillretire?
So what do I recommend?
Planning conservatively?
I don't know exactly yoursituation, but if you currently
are listening, going gosh, I'mnow seeing the value of that

(08:50):
superhero account you talk a lotof, because I realized that I
could really withdraw income ona schedule to keep my income way
lower.
Wow, I don't have that.
Or I wish I retired earlier andhad that, or whatever it may be
.
Whatever regret or what I callhead trash occurs there does not
mean that you should not retire, but it does mean that you
should look at healthcareplanning differently, because if

(09:11):
you're pulling from a 401k andyou have, let's say, 60,000 that
you're pulling, your subsidy orpremium tax credit will not be
the same.
So what we do need to make sureis we're taking into
consideration what is worst casescenario.
How much could you pay, becausewe don't know what legislation
will do.
You need to remain dynamic.
It's why I say I don't dofinancial plans, I do planning,

(09:32):
and this is just oneconsideration.
So I recommend having thehealthcare dialed in and then
going a step further and goingokay, how often am I going to
buy new cars and what is myhealth actually like?
Am I going to need to go out ofpocket to pay for things?
How else could somethingpotentially shift my retirement,
so that, once you've thoughtthrough every single thing, your
plan is bulletproof and youdon't have to wonder am I going

(09:53):
to be okay?
So hopefully today's episodewas insightful on just the
healthcare changes coming.
I have tons of differentconcepts and videos and podcasts
on healthcare specifically,which I know is one of all of
your largest concerns.
So hopefully this alleviatesthat.
And that's it for this episode.
See you guys next time.
Thank you all, as always, forlistening to the Early

(10:13):
Retirement Podcast.
I love getting to host theseshows and make different content
for you guys every single week.
I've not missed a single weekin years and that is because I
love getting to do this.
Now, please be smart about this.
Before you actually execute anystrategy that you see me talk
about or hear me talk about,should I say Please talk to your
financial advisor, your taxpreparer, your estate attorney.

(10:35):
Please be smart about this.
None of this should be construedas financial advice.
This is for fun, educational,informational purposes only.
Once again, just quickdisclaimer here.
Guys, please be smart aboutthis.
Appreciate you listening, asalways, and you can, of course,
submit a question on my website,earlyretirementpodcastcom.
If can, of course, submit aquestion on my website,
earlyretirementpodcastcom.

(10:55):
If you, of course, want me toaddress a specific case study or
topic, I will not promise I canget to it, but I respond to
every single person and if Ifind it will be helpful for a
lot of people, I will absolutelymake an episode on it, at the
very least give you some insight.
That's it.
Thanks, guys.