Leaving employment before traditional retirement age is a daunting challenge in our country. Perhaps the biggest obstacles to financial independence in the U.S. are health insurance and financial resources. For many individuals, health insurance often becomes a primary concern, with attention fixed on the traditional Medicare eligibility age of 65. Having sufficient resources to support oneself without work is equally critical, particularly before retirees can collect Social Security.

Domestic health insurance

Thanks to COBRA continuation coverage, most employees can retain their workplace health insurance for 18 months after leaving their jobs. However, the entire premium — plus a 2% surcharge —falls on the individual, as employers typically cease contributions. With family health insurance premiums often exceeding $2,000 a month, COBRA can be a significant financial burden.

The Affordable Care Act (ACA), often referred to as Obamacare, was a monumental change. It allows individuals to apply for guaranteed-issue health insurance through state or federal exchanges. Depending on taxable income, premiums can be heavily subsidized through advance premium tax credits. This program has greatly supported pre-Medicare retirees. Still, it comes with its own challenges: high deductibles and the potential for reduced subsidies due to unforeseen income fluctuations.

For example, if a retiree’s savings are primarily in a pre-tax IRA or 401(k), withdrawals for living expenses can increase taxable income, reducing ACA subsidies. Whenever clients relied on ACA coverage, we would craft a detailed tax plan to avoid unexpected subsidy repayments. Another important note is that federal COVID-era subsidies for health insurance premiums are scheduled to be reduced at the end of this year, which would leave many in the middle-class with much higher insurance costs.

Exploring options overseas

For many Americans, health insurance is tied to a sense of security — and financial anxiety. Compared to other developed countries, where health care systems often emphasize affordability and accessibility, the U.S. stands out for its potential to financially devastate families in case of illness or accidents. In contrast, many developed nations provide public health insurance to permanent residents after a simple application process.

In France, where my family is living for a year, lawful residents with visas can apply for public health insurance within months of arriving.

Many other countries offer similar programs. Even private health insurance options in these nations often come at a fraction of U.S. costs.

While I would never recommend going uninsured, I’ve found that even out-of-pocket medical expenses abroad can be remarkably affordable. Shortly after we arrived in France, our family paid for doctor appointments and an ER visit (fortunately, everything turned out fine) out of pocket. The total cost? A small fraction of what it would have been in the U.S.

When you combine these savings with a lower cost of living compared to areas like Boulder County, it’s easy to see how moving abroad could accelerate financial independence. A reduced monthly budget might allow you to reach your financial goals years earlier. Even a temporary relocation could bridge the gap until you qualify for Social Security and Medicare.

Practical steps and considerations

Relocating overseas requires thoughtful planning. To determine whether it’s right for you, consider factors such as visa availability in your target country; language barriers and cultural adaptation; quality and cost of healthcare and insurance; climate, safety, and personal lifestyle preferences; and tax implications and potential dual-taxation agreements. Resources such as expatforum.com, Facebook groups, and YouTube can provide invaluable guidance. Many countries have networks of professionals who help newcomers navigate the complexities of establishing residency.

A broader perspective

Moving abroad isn’t just about cutting costs. It’s an opportunity for personal growth. Imagine living in a new culture, exploring vibrant communities, and gaining fresh perspectives — all while advancing your financial independence. For those willing to embrace change, it’s a journey that can have a profound effect on your financial and personal life. Relocating overseas even for a year or two isn’t for everyone, but for those seeking financial freedom, it could be the unconventional solution that helps make work optional.

David Gardner is a certified financial planner and is admitted to practice before the IRS. He recently retired from an independent investment advisory firm and continues to write about financial topics. As financial planning is only possible after knowing the client, the column is not intended to be personal financial or tax advice. Data presented is believed to be accurate at the time of writing.