Retire Safe & Tax Free - Projecting Healthcare Expenses During Retirement


One component of retirement planning that many Americans typically underestimate is healthcare costs.

It is virtually impossible to know for certain how much money you will need to spend but it is a huge mistake to underestimate that projection.

According to studies from the Employee Benefit Research Institute (EBRI), even retirees who are eligible for Medicare should expect to spend substantial amounts of money to supplement that coverage. EBRI also found that women generally need to spend more money on healthcare expenses due to the statistical difference in longevity between men and women.

The following bullet points spell out a few other interesting findings from research conducted by EBRI. Keep in mind that the data is based on the assumption of retiring at 65 so those who are currently 55 and younger will likely need to save much more to cover their out-of-pocket healthcare expenses during retirement:

Men

  • Men who supplement traditional Medicare with Medigap and Medicare Part D and who have relatively high prescription drug expenses will need $100,000 if comfortable with a 50% chance of having enough savings. To increase their odds to 90%, they would need $187,000.
  • Men with subsidized retiree health benefits will need $66,000, if comfortable with a 50% chance of having enough savings to cover health care expenses in retirement.
  • Those with unsubsidized retiree health benefits who want a 90% chance of having enough savings will need $211,000.

Women

  • Women will need anywhere from $88,000 - $146,000 in savings to cover health insurance premiums and out-of-pocket expenses in retirement if they are comfortable with a 50% chance of having enough money and $143,000 - $242,000 if they prefer a 90% chance.
  • Women who supplement traditional Medicare with Medigap and Medicare Part D and who have relatively high prescription drug expenses will need $131,000 if comfortable with a 50% chance of having enough savings, while those who prefer a 90% chance of having enough savings would need $213,000.
  • Women who supplement traditional Medicare with Medigap and Medicare Part D and who have relatively high prescription drug expenses will need $131,000 if comfortable with a 50% chance of having enough savings, while those who prefer a 90% chance of having enough savings would need $213,000.
  • Women with unsubsidized retiree health benefits who want a 90% chance of having enough savings will need $242,000. Now the question is, how much will you need to cover your healthcare expenses during retirement?

Talk to us today to find out the answer and get personalized analysis to help identify potential solutions.

Contact: Marc H. Weiss, Archer Weiss Insurance and Financial Services

(818) 610-8560