Learn why you may be able to retire earlier than you think.
This field is for validation purposes and should be left unchanged.

The Inflation Reduction Act’s Impact on Retirees

As a high earner on the cusp of retirement, how might the Inflation Reduction Act of 2022 impact your retirement decision?


As you know, our team at Bernicke Wealth Management thoroughly enjoys helping our clients – you! –navigate life’s moments and, in particular, retirement!

On August 16, 2022, President Biden signed into law the “Inflation Reduction Act of 2022.” This new law extends for 3 years the enhanced subsidies (provided during the COVID-19 pandemic) for people buying health insurance on the Affordable Care Act Marketplace put in place by the American Rescue Plan of 2021.


What does this mean for you?


It means consumers obtaining coverage through the Marketplace may have sustained affordability until 2025 via 1) continued lower percentage of their household income they will be expected to contribute toward healthcare premiums and 2) the extension of premium tax credits to households reporting household income above a certain level. For the next 3 years, no family will be forced to pay more than 8.5 percent of their household income for ACA coverage (https://thefinancebuff.com/aca-premium-tax-credit-percentages.html), whereas in the past people reporting income above a certain level were not eligible for subsidies and potentially would have to pay full price.

Although our advisors work with retirees every day, they understand the uncertainty that can present itself when you contemplate if now is the “right time” to take the plunge from a fulfilling career to the great unknown of retirement.

Of course, there are many factors to consider that will impact your wealth beyond your working years. One critical factor our team finds great satisfaction helping clients navigate is obtaining clarity on health insurance costs prior to Medicare eligibility.

Your retirement picture is unique and pulling together this important part of retirement is a little like piecing together a jigsaw puzzle. At first it may seem overwhelming and complicated, but once the pieces have been organized and assembled to create a complete picture, it all makes perfect sense! And our team is here to answer your questions along the way.

If you want to retire prior to being eligible for Medicare, this new law may ensure affordable healthcare for the next 3 years. With proper planning, these savings can be structured for additional years, as well.

Contact your advisors to learn more about how to structure your retirement income to optimize your healthcare without compromising your retirement funds.


The content provided herein is based on our interpretation and is not intended to be legal advice or proved a tax opinion. This information is a summary only and not meant to represent all provisions within the Act.


Schedule A Financial Consultation

  • This field is for validation purposes and should be left unchanged.