If you’re retiring from federal service before age 65, there’s a number worth calculating before you leave: how much you’ll pay in Federal Employees Health Benefits (FEHB) premiums between retirement and Medicare eligibility. For someone retiring at 57, that means projecting roughly eight years of premiums. At 60, it’s five years. At 62, it’s three.
For family coverage, that total can reach six figures, yet it rarely appears as a single line item in retirement projections. Here’s how to estimate it using your retirement age, current FEHB premium, and an assumption about future premium increases.
Start With the Number of Years Until 65
The first step is simply measuring the period between your retirement date and age 65, when most people first become eligible for Medicare based on age. For employees under the Federal Employees Retirement System (FERS) — the system covering the large majority of the current federal workforce — that length varies considerably depending on when and how you retire:
- Retire at 62 with an immediate annuity — about 3 years until age 65
- Retire at 60 under the 60/20 provision — about 5 years
- Retire at Minimum Retirement Age (MRA) with 30 years of service — MRA runs from 55 to 57 depending on birth year, leaving roughly 8 to 10 years
- Retire earlier under a Voluntary Early Retirement Authority (VERA) offer or a disability retirement — 10 or more years may separate retirement from age 65
Employees still under the older Civil Service Retirement System (CSRS) follow a different set of age-and-service categories.
What FEHB Premiums Can Add Up to Before Medicare
First, make sure you’re eligible to continue FEHB in retirement. You generally need to have been continuously enrolled in — or covered as a family member under — an FEHB plan for the five years of service immediately preceding retirement, or for the full period since your first opportunity to enroll if that period is less than five years. You also generally need to retire on an immediate annuity. You don’t have to remain in the same FEHB plan for those five years, and once retired you can change plans during Open Season or following certain qualifying life events.
Now consider the premium itself. Using the Blue Cross Blue Shield (BCBS) Standard Self and Family option as an example — with a 2026 enrollee premium of $991.60 per month — here’s what cumulative premiums look like over three different periods if premiums rise 6% each year. The 6% figure is a planning assumption, not a forecast; actual FEHB increases vary by plan and year, and recent program-wide increases have been considerably higher.
| Years Until 65 | Starting Monthly Premium | Estimated Total Premiums |
|---|---|---|
| 3 years (retire at 62) | $991.60 | ~$37,900 |
| 5 years (retire at 60) | $991.60 | ~$67,100 |
| 8 years (retire at 57) | $991.60 | ~$117,800 |
Those figures are premiums only — before a single deductible, copay, coinsurance charge, or prescription is paid. They also assume the retiree keeps the same plan and enrollment tier throughout the period, which isn’t required. Even using a lower 4% annual growth assumption, the eight-year example still produces more than $109,000 in premiums.
That’s why looking only at today’s monthly premium can understate the role health insurance will play in a retirement budget. A $991.60 monthly expense looks very different when viewed as more than $100,000 of projected spending before age 65.
A Small Monthly Premium Difference Gets Much Bigger Over Time
A plan that made financial sense while you were working may not be the best fit for a retirement that begins years before Medicare, particularly when even modest premium differences are compounded across five, eight, or ten years.
For example, suppose another FEHB option starts $150 per month below your current plan. If that difference grows at the same 6% annual rate, the cumulative premium difference over eight years approaches $18,000. Start with a $300 monthly difference, and the gap approaches $36,000.
That doesn’t necessarily make the lower-premium plan the better choice. Deductibles, copays, coinsurance, prescription coverage, provider networks, out-of-pocket maximums, and other benefits can outweigh the premium difference depending on your healthcare needs. The goal isn’t simply to find the cheapest premium — it’s to understand the total financial tradeoff.
The comparison worth running before retirement, and again during future Open Seasons, includes the current premium, deductible, out-of-pocket maximum, and major cost-sharing provisions for your top two or three candidates. Our FEHB Premium Lookup tool pulls current rates by plan so you can start that comparison without digging through 130-plus plan brochures.
Run More Than One Premium Scenario
No one knows what your FEHB premium will be five or eight years from now. That’s why a useful retirement projection shouldn’t rely on a single growth rate.
Instead, run several scenarios. A 4% annual increase gives you a lower-growth case. A 6% assumption gives you a middle scenario, while 8% shows what happens if faster premium growth persists. These aren’t predictions of future FEHB increases; they’re a way to see how sensitive your retirement budget is to an expense you can’t know precisely in advance.
For the $991.60 monthly premium used above, the eight-year total at 4% growth is roughly $109,600. At 6%, it’s roughly $117,800. A higher assumption pushes the total higher still. The exercise isn’t about guessing the exact future premium — it’s about knowing whether your retirement plan still works across a reasonable range of outcomes.
Don’t Forget What Happens at 65
Reaching age 65 doesn’t necessarily mean FEHB goes away. Federal retirees can generally continue FEHB after becoming eligible for Medicare, and many then decide whether to enroll in Medicare Part B and coordinate it with their FEHB coverage. Part B brings another monthly premium, so that expense belongs in the next stage of the retirement healthcare calculation.
There’s also a tax-planning issue to keep in mind as 65 approaches. Medicare generally uses modified adjusted gross income from two years earlier when determining whether a beneficiary owes an Income-Related Monthly Adjustment Amount (IRMAA) on Medicare Part B and Part D. A large taxable Thrift Savings Plan (TSP) withdrawal or Roth conversion during the final years before Medicare can therefore affect Medicare premiums two years later.
The important point for this calculation is that age 65 isn’t the end of healthcare planning. It’s the point where the cost structure changes.
Build Your Own Estimate
You can make a basic projection with four inputs:
- Your planned retirement date and the approximate number of years until age 65
- Your FEHB plan’s current monthly premium at your enrollment tier (Self Only, Self Plus One, or Self and Family)
- A range of annual premium-growth assumptions, such as 4%, 6%, and 8%
- One or two alternative FEHB plans you’d realistically consider carrying during retirement
Calculate the premium year by year rather than simply multiplying today’s annual premium by the number of years. That captures the effect of future premium increases and gives you a much more realistic estimate of what FEHB could consume before Medicare eligibility.
Then compare those totals against your projected Federal Employees Retirement System (FERS) annuity and TSP withdrawal plan. Instead of simply knowing that healthcare will be an expense in retirement, you’ll have an estimated dollar range you can actually incorporate into the decision about when you can afford to retire.
For current premiums by plan, see OPM’s FEHB premium page, which is updated each Open Season.