How to Plan for Retirement When Health Challenges Change Everything
When you’re facing a serious health challenge, it can feel like your entire life plan has been thrown off course especially your retirement. Maybe you had every intention of working until 65, but your health just won’t allow it. Or maybe you’re helping a spouse or family member navigate that reality. The truth is, retirement planning looks completely different when your timeline isn’t determined by choice, but by circumstance.
I’ve worked with many clients who’ve had to retire earlier than expected due to medical issues. And one of the hardest parts isn’t just the emotional toll it’s the financial uncertainty. The good news is that there are ways to adjust your plan to protect your finances and maintain peace of mind.
The first step is to get a clear picture of your income sources. If you can’t continue working, look into disability benefits immediately either through your employer, a private policy, or Social Security Disability Insurance (SSDI). If you’re married, review your spouse’s Social Security benefits too, because your household income may change significantly once you’re no longer earning. Don’t wait until you’re in financial distress; file for these benefits as soon as possible, even if the approval process takes time.
Next, it’s important to rethink your withdrawal strategy. Health challenges often lead to higher medical expenses, and those costs can rise faster than inflation. You may need to pull from your investment accounts earlier than planned, but that doesn’t mean your savings have to run out. A good rule of thumb is to adjust your withdrawal rate temporarily rather than overhaul your entire plan. This might mean withdrawing a little more early on, then scaling back once Social Security or disability payments begin.
If you’re under 65 and can’t work, health insurance becomes one of the biggest concerns. You’ll need coverage before Medicare eligibility kicks in. In that case, the Affordable Care Act marketplace can be a lifesaver, especially if your income drops you might qualify for significant subsidies that lower premiums. For couples, it’s worth comparing whether it’s better to stay on a spouse’s employer plan or switch to individual coverage.
Another key area is tax planning. Many people assume their taxes will automatically drop after they stop working, but that’s not always the case. If your medical expenses are large enough, you might qualify for significant deductions and you can use those years of lower income to do Roth conversions strategically. This helps reduce future Required Minimum Distributions (RMDs) and keeps your taxable income more predictable later on.
It’s also important to review your estate plan. Health challenges can change your priorities quickly. Make sure your will, powers of attorney, and healthcare directives are up to date. If you have a living trust, double-check that your accounts are titled correctly. And don’t forget to communicate your wishes clearly with your loved ones.
Finally, try to focus on what you can control. You can’t always control when health challenges strike, but you can control how you respond financially. Working with a financial advisor who understands both taxes and retirement income planning can make all the difference. Together, you can find ways to stabilize your income, protect your investments, and make sure you’re prepared for the years ahead even if life looks different than you planned.
Retirement isn’t always a straight line. Sometimes it’s about resilience adapting your plan so you can live with dignity, independence, and security, no matter what happens next.
Intended for educational purposes only. Opinions expressed are not intended as investment advice or to predict future performance. Past performance does not guarantee future results. Neither the information presented, nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Consult your financial professional before making any investment decisions. Opinions expressed are subject to change without notice.
IMPORTANT DISCLOSURES:
• Investment Advisory and Financial Planning Services are offered through Pure Financial Advisors, LLC. A Registered Investment Advisor.
• Pure Financial Advisors, LLC. does not offer tax or legal advice. Consult with a tax advisor or attorney regarding specific situations.
• Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
• Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
• All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.
• Intended for educational purposes only and are not intended as individualized advice or a guarantee that you will achieve a desired result. Before implementing any strategies discussed you should consult your tax and financial advisors.
