The three years before Medicare are a budget line of their own

Quick answer: Social Security can start at 62. Medicare generally starts at 65. Those 36 months are yours to cover, and the cost belongs in your retirement budget before you give notice. Your options are a spouse's plan, COBRA, a marketplace plan, retiree coverage, or a job that carries benefits.

Claiming your Social Security check at 62 does nothing for your health coverage. People mix the two up constantly. The retirement party happens, the last paycheck lands, and the group plan that cost you a modest amount per pay period quietly ends.

Then you're a 62-year-old buying insurance on your own.

Price the gap before you quit

Start with a number, not a feeling. Here's a worked example, and it's an example only. Say a marketplace plan quotes you $1,100 a month. Over 36 months that's $39,600 in premiums before you've seen a doctor. Add an out-of-pocket maximum of $8,000 in a bad year and the worst-case first year is $21,200. Your quote will differ, possibly by a lot, depending on your state, your plan and your income.

Run that same math on your real quotes. Do it before you set a retirement date, because $40,000 or more in health costs changes how many months you can afford to retire early.

Quotes are free at HealthCare.gov, and you don't have to buy anything to get one.

Your five real options

• A spouse's employer plan. Often the cheapest route if your wife is still working and her employer offers coverage. Losing your own coverage generally opens a short window to join hers, commonly 30 days. Miss it and you wait. Ask her HR department this month.
• COBRA. You keep your old plan, same doctors, same deductible progress. You also pay the full premium plus up to 2 percent in fees, which is usually a shock. It generally lasts 18 months, so it covers half the gap at most.
• A marketplace plan. Insurers can't turn you down or charge more for a pre-existing condition. They can charge a 64-year-old up to three times what they charge a young adult. Losing job coverage generally gives you a 60-day window to enroll outside the normal open enrollment period.
• Retiree coverage from your old employer. Rare now, but ask. If it exists, get the premium, the network and the end date in writing.
• A part-time job with benefits. Not glamorous. But 20 hours a week at a employer who covers you can be worth more than the wages. Plenty of men have done the arithmetic and gone back to a hardware store counter for exactly this reason.

One wrinkle on COBRA. Dropping it early to switch to a marketplace plan generally doesn't open a special enrollment window. Running out of COBRA does. Read the rules at HealthCare.gov before you choose.

Your income sets your price

Marketplace premium help is tied to your reported income, and the rules on that help have changed more than once in recent years. They may change again. Check the current formula at HealthCare.gov, not at the coffee shop.

What matters for planning is this. In the gap years, the account you withdraw from can change the income you report. A pull from a traditional IRA counts differently than money from a Roth or from savings you've already paid tax on. That's why the order you spend your accounts matters, and Which Retirement Account To Spend From First walks through the logic. The tax side of these years is exactly where a CPA earns the fee.

Cheap plans that aren't what they look like

Short-term health plans advertise low monthly prices. They can generally turn you down for your health history, exclude pre-existing conditions and cap what they'll pay. They're built for a gap of a few months, not three years at 62.

Health care sharing arrangements work differently from insurance. They're generally not regulated as insurance, and payment isn't guaranteed. Read what they exclude before you count them as coverage.

A plan that's cheap until you get sick isn't cheap.

The trap waiting at 65

Medicare has a seven-month Initial Enrollment Period. It starts three months before the month you turn 65, includes that month, and runs three months after.

Miss it and Part B, the part that covers doctor visits, carries a late penalty. It's 10 percent for each full 12-month period you could have signed up and didn't. Two years late, 20 percent more. And you pay it for as long as you have Part B.

The common way people get caught is believing COBRA or retiree coverage counts as the kind of coverage that lets you delay. Generally, it doesn't. Coverage through current work does. COBRA and retiree plans generally don't. Confirm your own situation at Medicare.gov or by calling them.

Two more details worth marking down:

• HSA. If you've been funding a health savings account, you generally can't keep contributing once you're on Medicare. You can still spend the balance on qualified medical costs, including some premiums.
• Medigap. If you want a Medicare Supplement policy, there's a six-month window that starts when you're 65 and enrolled in Part B, in which insurers generally can't refuse you. Outside it, they can ask health questions.

Medicare Advantage versus Medigap is its own decision, with real trade-offs on networks and costs. Take your time with it and talk to a licensed, independent agent who isn't paid to push one plan.

Where you live changes the answer

Plans are priced by state and county, and networks differ by region. A plan that looks great on paper may not include the clinic 20 minutes from the place you're moving. If a move is part of the plan, check coverage and local doctors first. What to Check Before You Retire to a Small Town covers the hospital and specialist questions people forget until they need them.

What to do this month

1. Get three real quotes: a spouse's plan if available, COBRA, and a marketplace plan.
2. Multiply the monthly premium by 36, then add the out-of-pocket maximum for each year.
3. Ask your employer's HR about retiree coverage and COBRA dates in writing.
4. Look up current Social Security rules at SSA.gov, Medicare enrollment rules at Medicare.gov, and tax thresholds at IRS.gov. Limits, ages and thresholds change.
5. Sit down with a fee-only fiduciary adviser and a CPA before you pick a retirement date. If an estate attorney is already part of your life, keep them in the loop. This article is general education, not individual financial, legal or tax advice.

Then put one entry on the calendar for the month you turn 64 and a half. Title it "Medicare." It'll cost you nothing and may save you a penalty you'd otherwise pay for the rest of your life.