A New Look at Healthcare Costs in Retirement
Health benefits for retirees are a relic of the past. Fewer than a third of current workers have any employer subsidy for retiree health insurance, according to the Employee Benefit Research Institute. In the past, I've written that retired couples will need between $205,932 (Boston College Center for Retirement Research estimate) and $225,000 (Fidelity Investments estimate) to cover healthcare costs in retirement.
A new analysis by the nonpartisan EBRI puts the number for a couple currently age 65 at a staggeringly high $635,000, and that doesn't include long-term-care costs. This ultraconservative calculation is higher than the other estimates because it is designed to give the retired couple a 90 percent chance of having enough money to cover all health bills beyond what Medicare covers.
However, if you are willing to accept a fifty-fifty chance of being able to pay your out-of-pocket expenses, $212,000 would be sufficient for a couple (right smack in the middle of the other two estimates).
EBRI also calculated that a 65-year-old single man will need $331,000 and a single woman $390,000 to be almost completely certain of covering all out-of-pocket retiree health costs. If you're willing to accept a fifty-fifty chance, those numbers can be halved, EBRI says.
Tags: healthcare | health insurance | retirement
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Reader Comments
A call to action!
This, YOUNG people, is why you had better elect a lot of Democrats and soon. Insurers and the incorporated "medical" providers have their crosshaired target scopes fixed on EVERY penny that your parents and grandparents ever had or hope to have. And, they will vacuum it all up as sure as the sun rises, unless YOU elect and enact universal health care for your folks and yourselves.
Democrats are hardly the answer
the last poster said voting for Democrats is the answer, so that big govt. can tax us to death and promise the safety net they never deliver on.
Every reitrement or health program the govt. has touched (and taxed us for) has turned to poop -- and near bankruptcy status.
Why would we want more govt. bureacrats in charge of our money, only to provide terrible service, and spend the money on things that have nothing to do with where the funds were supposed to go.
Wake up folks, and quit hoping for govt. to secure your future. All of the Democrats promises for the last 40 years have resulted in massive failure.
Democrats vs Republicans
As an independent it is really easy to see why our country really has very little chance of surviving over the next 25 years. Both parties (D's and R's) look only at the votes they will get and not the long term consequences to the country. The D's want to give everyone a health care that will attempt to keep everyone young and alive forever no matter what the costs to the tax payers may be. The R's want healthcare to be market based and thus run by free enterprise. To me both sides are totally misguided (which should be no suprise to anyone). There has to be a middle ground but both parties despise and distrust each other so much that I do not see that happening until it will be way to late for the country to be rescued. The D's have to get over trying to keep everyone alive forever and stop trying to get government involved in health care (I would love to have someone tell me one program that the government hasn't screwed up). The R's need to stop believing that the health care system is fair. When hospitals are allowed to charge their insured customers 10% of what someone without insurance is charged there is a problem. Medical schools limit the number of graduates under the guise of quality control when in reality it is used to keep doctors incomes up. This is not anything but robbery. Why can't the two sides work together and (OH!! escuse me that's a stupid ides). Every one deserves a very basic health care plan and that does not need to cost an arm and a leg. My hope is that we get someone with some common sense (Obviously that means they would not be a politician) to figure this out before we have to swallow another entitlement program the size of a watermellon.
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