Retiring early is great if you are able to plan and save enough money to live comfortably for the rest of your life. But what about healthcare costs? If you decide to leave the workforce before the age of 65, which is the qualifying age for Medicare, you may want to consider a few other healthcare options. Some healthcare costs may affect your budget in retirement because you are paying higher premiums and they aren’t tax-deductible.

In previous years, Baby Boomers who retired early had a difficult time finding affordable healthcare coverage if they didn’t meet the age requirement for Medicare. Now, there are a variety of healthcare options available for early retirees. All you need to do is navigate through the healthcare system and find which option fits your needs.

Healthcare costs can vary depending on your health, lifestyle, and personal situation. The first step in figuring out how much you need to save for healthcare if you retire early is using AARP’s healthcare cost calculator. This tool can personalize results specific to your needs. All you have to do is input your information and health conditions to get an estimate of how much your healthcare costs will be in retirement. The tool also provides helpful resources that can help you plan for healthcare costs and savings goals.

If you retire early and do not meet the age requirement to obtain healthcare coverage from Medicare, then you will need to find an alternative healthcare plan to get you through those years until you reach the age of 65. One way is to join your spouse’s healthcare plan. If you are married and have a spouse that is still working after you’ve retired, you should find out if you could be added to his/her employer’s healthcare plan. But you should consider the increase of their policy’s premiums if your spouse didn’t have a family policy in place. Although those premiums might increase, you may still be able to save money when compared to other coverage plans like COBRA.

COBRA is a healthcare policy that lets you stay on your former employer’s healthcare plan if you retire early. You will keep your current plan and in-network providers, but you will pay a higher premium because your former employer will no longer pay a portion of that premium since you are no longer a full-time employee. This increase in premiums should be factored into your healthcare costs if you decide to retire early. Also, COBRA coverage is only guaranteed for 18 months, so if you have a few more years to qualify for Medicare then you will need to find another form of healthcare coverage.

The Affordable Care Act provides more healthcare options for retirees as well. You can purchase a healthcare plan through your state or federal health insurance exchange, also known as marketplace, that offers a range of coverage and price options. In the marketplace, you can compare insurance policies, costs, and networks that vary by state. Purchasing your own health insurance may be costly though, depending if you have any medical conditions or are in poor health. You could end up paying anywhere from $500 to $1,000 a month out of pocket for health coverage. But at least you have the flexibility to pick which plan fits your personal and financial situation best.

So if you are deciding to leave the workforce before the age of 65, it’s important that you explore your options and understand how healthcare costs will impact you in retirement. It will most likely lead to more annual expenses so make sure you budget accordingly for higher health insurance costs when retiring early.