Dear DTA,

My goal is to survive retirement. There is a 10 year gap between my age and my wife’s age. She has health issues that prevent her from working, which means no health care for her if I retire. I doubt I would be able to keep working until I am 75 just to maintain health insurance from work. And I don’t want to keep working that long anyway.

-Francis H.

Hi, Francis. Appreciate you writing.

Terribly sorry to hear about the health issues you and your wife are dealing with. That’s rather unfortunate.

However, the good news is that you shouldn’t have to work until 75 simply to maintain health insurance from your job.

While the structure of health insurance in this country is currently under debate, and likely to evolve over time, the current situation is such that you definitely don’t need to continue working only for health insurance.

The Affordable Care Act, which was signed into law in 2010, affords people with preexisting conditions access to health insurance, regardless of their employment situation.

In fact, health insurers are legally prevented from blocking people with preexisting conditions from insurance.

So your wife’s health issues shouldn’t prevent access to health insurance.

In addition, the national exchange is a platform that allows anyone to access health insurance, regardless of employment status.

It’s truly never been easier to get health insurance without a job. I’d know, as I don’t have an employer, yet I have health insurance.

The next problem, which is probably the main problem, is cost.

However, the Affordable Care Act (with particular emphasis on affordable) should help alleviate some of this burden, too.

If you get health insurance through the national exchange (rather than through your employer), your cost will be partly determined by your income.

So if your income takes a hit due to retirement (or any other circumstance), your health insurance should be appropriately adjusted downward.

For perspective, qualifying income limits range between 1x and 4x the federal poverty limit.

A family of two (assuming it’s just the two of you) would qualify for subsidies with annual income between $16,240 and $64,960.

This gives you a lot of leeway in terms of how much you two can earn and still qualify for lowered health insurance premiums.

I’d recommend checking out an official calculator, which can better determine what kind of subsidy you might qualify for. This one would be a great start.

With two Social Security benefit checks rolling in (assuming you both qualify for SS benefits), you might be able to earn a lower-middle-class income and yet pay very little in health insurance.

However, more income never hurt anyone. And if you two could boost your passive income between now and the time you’re finally ready to hang it up, you’d be better off for it.

I’m in a pretty good spot to help you in this regard, as I went from $0 in passive income in early 2010 to five-figure passive income now.

Indeed, I was totally broke just a few years ago.

But I was determined – like you – to not work for the rest of my life.

So I started making aggressive changes in my life, which meant totally altering my everyday habits.

It also meant moving to a cheaper (and smaller) apartment, selling my car, and eating a lot of ramen noodles.

By living extremely frugally, I was able to save a lot of money.

And since that money would do practically nothing in the bank, I knew I had to invest it.

The investment strategy I chose to grow my capital and passive income is dividend growth investing.

And boy, it’s treated me really well.

I’ve been investing in wonderful businesses that reward their shareholders with growing dividends.

You can find hundreds of examples of dividend growth stocks by taking a look at David Fish’s Dividend Champions, Contenders, and Challengers list, which is a fantastic compilation of all US-listed stocks that have paid increasing dividends for at least the last five consecutive years.

These growing dividends are funded by the growing profit these businesses generate, as they’re often selling more products and/or services to society.

The result of all that investing is the real-money, real-life portfolio I now control – a portfolio that generates five-figure passive and growing dividend income for me.

Now, I built that portfolio in just seven years – starting back in 2010.

So you can see what’s possible in a relatively short period of time.

However, few people will want to live as frugally as I do.

But that doesn’t mean that you two can’t make significant strides in your financial health over the next few years, which would set you guys up for a nice situation that doesn’t require you to work until you’re 75 years old.

You’ll first have to figure out how much you two are spending. That means setting up a budget.

Once you know, down to the penny, what you’re spending, you’ll be able to more accurately judge how much passive income you’ll need to sustain yourselves.

Getting your expenses down will be key, though, as opportunities to increase income will be limited once you’re no longer working.

Spending less accomplishes two major goals.

First, it means you have more to save and invest. This increases the potential passive income you can earn once you no longer have the job.

Second, it reduces the amount of passive income you need to live off of, as a lower monthly expenditure simply requires less income to cover it.

I’m not sure how old you are, but you can see what I’ve been able to do in a relatively short period of time.

If you have even just five years in front of you (before you want to retire), this is a great chance to make up for any budgetary shortfalls you may have.

But you’ll need to figure out how much you’ll have to spend on health insurance for both you and your wife.

And that’ll have to be factored into the overall budget, which should be minimized and pruned at every possible turn.

Meanwhile, you should aim to intelligently invest your excess capital for the long term, which will provide extra passive income on top of whatever retirement income (including SS) that you have to look forward to.

While dividend growth investing is a fantastic long-term investment strategy, one shouldn’t start without first knowing what they’re getting into.

Educating yourself has really never been easier, however, with great resources such as fellow contributor Dave Van Knapp’s entire series of lessons on dividend growth investing freely available for you to read through.

That series discusses how dividend growth investing works, why it’s such a fantastic long-term strategy, and how to successfully become a dividend growth investor.

Moreover, I personally highlight an appealing long-term dividend growth stock every Sunday, via my undervalued dividend growth stock of the week series.

Of course, you two will want to try and pay down any outstanding debts you have, as that will further reduce strain on your budget. If you can enter retirement without debt, you’ll be in a great spot.

And setting up an emergency fund is always recommended, as you two will want to be able to cover any large and short-term costs that are substantial, especially considering your wife’s medical issues.

Resources have never been more robust or easy to find as they are now, which bodes well for you guys.

But it’s ultimately up to you, Francis, to take action.

And there’s never a better time than today for that.

I wish you luck and success.

Jason Fieber

Disclaimer: Jason Fieber is not a licensed financial advisor, tax professional, or stock broker. Please consult with a licensed investment professional before investing any of your money. If your money is not FDIC insured, it may decline in value. To protect the privacy of our readers, any names published in this article are under aliases. In addition, text may be edited, omitted or paraphrased for grammar or length.

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