Retiring Before 62? This ONE Factor Determines If You’ll Regret It (Data From 10,000 Americans)

You’ve done everything right. You saved aggressively, maxed out your 401(k), and calculated your “magic number” to leave the workforce at 60.

But what if the single factor that makes or breaks your entire early retirement has nothing to do with your investment portfolio?

Most retirement plans focus on accumulation (how much money you have). But they often miss the logistical and financial nightmare of the “healthcare gap.”

While headlines about “10,000 Americans” grab attention, the real data from Fidelity and the Employee Benefit Research Institute points to one huge factor that causes regret: failing to have a concrete, funded plan for healthcare costs before age 65.

This article isn’t just about saving. It’s a 2025-specific, actionable guide on how to solve the healthcare problem before retiring before 62, so you can actually enjoy the money you worked so hard to save.

The “Great Regret”: What the 2025 Data Really Says

You might think the biggest early retirement regret is running out of money for travel. The data says otherwise.

The “data” isn’t from just one study. It’s a clear theme in major 2024 and 2025 research from groups like the Employee Benefit Research Institute (EBRI). They find the top regret is not saving enough for unexpected health issues.

In fact, many people (over 50% in some studies) are forced to retire earlier than planned because of their health or a spouse’s. When that happens, their perfect plan is instantly broken.

Let’s look at the hard numbers for 2025.

The “Healthcare Gap”: The 3-Year Problem That Sinks 5-Star Plans

It’s simple. It’s the 3, 4, or 5 years between your last day at work (say, at 62) and your 65th birthday when Medicare kicks in. Think of it as a 3-year, $60,000 tollbooth on the road to your retirement.

You have two main options to get through it. One is a trap. The other has a hidden trap.

Option 1 (The Trap): COBRA

COBRA lets you keep your exact employer health plan. The catch? You pay 100% of the premium plus a 2% fee. Your company was paying most of that bill for you. Now, it’s all on you, and it is incredibly expensive.

Even worse, COBRA only lasts for 18 months. If you retire at 62, it runs out long before you turn 65, leaving you with another gap to fill.

Option 2 (The Default): The ACA Marketplace

This is the main solution for most early retirees. But it has a major trap that causes massive regret: the “Subsidy Cliff.”

ACA plan subsidies (the discounts that make them affordable) are based on your income. But the government doesn’t look at your bank account; it looks at your Modified Adjusted Gross Income (MAGI).

If you retire and start pulling $80,000 a year from your traditional 401(k) or IRA, your MAGI is $80,000. The government sees that and says, “You don’t need help.”

You get zero ACA subsidies and must pay the full, unsubsidized premium, that $25,000-a-year bill we talked about.

It is the financial bomb that people don’t see coming. Your 401(k) won’t save you from this.

The 2025 Action Plan: How to Engineer Your Income and “Bridge the Gap”

This sounds complex, but the solution is 100% tactical. You have to engineer your income to win the game.

Here are the most powerful strategies to disarm this healthcare “time bomb” for 2025.

Strategy 1: Master Your MAGI (The #1 Tactic)

The goal is to keep your official income (MAGI) low enough to get the maximum ACA subsidies. How? You need income that the government doesn’t count.

• How to do it: Live off withdrawals from a taxable brokerage account (you only pay capital gains) or, even better, a Roth IRA. Roth IRA withdrawals are 100% tax-free and do not count toward your MAGI at all.
• Your Action: Use the KFF Health Insurance Marketplace Calculator right now. Plug in your state and zip code. See what the premium is for a 62-year-old. Then, slide the income bar. Watch how the premium drops from $1,800/month at $80,000 MAGI to $100/month at $35,000 MAGI.

Strategy 2: The “HSA Super-Tool”

Your Health Savings Account (HSA) is the ultimate healthcare “bridge” fund. It’s the only account with a triple tax advantage: tax-free in, tax-free growth, and tax-free out for medical costs.

• How to do it: You must be funding this account while you are still working and enrolled in a high-deductible health plan. You cannot contribute once you’re on Medicare.
• Your Action: Max out this account for the 5-10 years before you retire. You can use this HSA money 100% tax-free to pay for your ACA premiums, co-pays, and all other medical costs. It protects your other retirement accounts.

Strategy 3: Roth Conversions (The Long Game)

This is a smart move for people 5-10 years away from retiring.

• How to do it: Each year, you strategically move (or “convert”) a set amount of money from your traditional 401(k) or IRA into a Roth IRA.
• Your Action: You pay income taxes on the converted amount now, while you’re still in a known tax bracket. This fills up your Roth “bucket.” Then, when you retire at 62, you can pull that money out 100% tax-free, creating zero MAGI and unlocking those valuable ACA subsidies.

Strategy 4: “Barista FIRE” (The Benefits-Only Job)

This isn’t about the money. It’s about the benefits.

• How to do it: It means working part-time (15-20 hours a week) at a company famous for its benefits, like Starbucks, Costco, or a local library.
• Your Action: You work just enough to qualify for their group health insurance plan. This is often far cheaper and better than any plan you could get on the individual marketplace, no matter what your MAGI is.

Strategy	How It Works	Why It’s Powerful
1. Master Your MAGI	Live off non-MAGI income (like a Roth IRA).	Lowers your “official” income to get large ACA subsidies.
2. Fund Your HSA	Max out your Health Savings Account before retiring.	Creates a 100% tax-free fund to pay for all medical costs.
3. Use Roth Conversions	Convert traditional 401(k)/IRA to a Roth before retiring.	Provides a tax-free, MAGI-free income source to live on.
4. “Barista FIRE”	Get a part-time job just for its health benefits.	Bypasses the ACA marketplace for cheaper group insurance.

Beyond Dollars: The Non-Financial Regrets of Retiring Before 62

A perfect healthcare plan won’t stop retire early regret if you’re bored, lonely, and directionless. While healthcare is the biggest financial factor, it’s not the only one.

Just as you need a financial plan for the gap, you need a purpose plan.

1. Loss of Purpose: You’re moving from a 40-hour structured week to a 0-hour week. You must “retire to something,” not just from something.
2. Social Isolation: You’re losing the daily, built-in social network of a workplace. This can be a huge shock.

Wes Moss, author of “What the Happiest Retirees Know,” has research that proves this. He finds the happiest retirees have, on average, 3.6 “core pursuits” (hobbies on steroids).

The unhappiest retirees have fewer than 2. The happiest retirees have a plan for their money and a plan for their time.

Conclusion

Successfully retiring before 62 is a two-part challenge. Part one is saving your “number.” You’ve probably focused on this for decades.

Part two, the one that causes the most regret, is building a financial bridge to survive the healthcare gap until age 65.

Don’t let an $18,000-a-year surprise ruin your dream. Your first action item is to go to the KFF subsidy calculator right now. Plug in your state and an estimated retirement income to see your real-world 2025 healthcare costs.