Retirees May Need to Save More to Cover Health Care Costs
June 18, 2009
Retirees need to set aside more savings to cover health insurance premiums and out-of-pocket costs than ever before, according to an analysis by the nonpartisan Employee Benefit Research Institute.
Men and married couples, on average, will need 9% more in savings than a year ago to pay for healthcare, while women will need 16% more in savings for healthcare than last year, the institute concluded.
Male Medicare beneficiaries with supplemental insurance such as Part D or MediGap will need $86,000 in savings for retirement health costs, while women in a similar situation would need on average $125,000 in retirement, because of their longer life spans. A couple with average drug and medical expenses would need about $210,000 in savings.
This nest egg would give retirees about a 50-50 chance of being able to afford their healthcare. To have a 90% chance that all healthcare costs would be affordable over the course of retirement, couples would need savings of upward of $807,000, in addition to Medicare and supplemental insurance, according to the report.
Many retirees will need even more money than these estimates because they exclude long-term care expenses and other basic living costs such as shelter and food, according to the report.
Article taken from National Health Council “Better Health Care By Design” Newsletter