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A New Look at Healthcare Costs in Retirement

June 5, 2008 RSS Feed Print

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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:: health insurance,; healthcare,; retirement

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Have you seen what Healthview Services has created to calculate health care costs for Baby Boomers?
Their website is www.healthviewservices.com

Dan of NH 8:47PM July 31, 2010

And this folks is what we get for living in the land of "milk and honey". WHATEVER. People are fighting tooth and nail to get into this country when every hard-working decent American would float away if they could to some other country where perhaps they could AFFORD to retire. The retirement myth is just that...."a myth". My generation will be working until we are no longer able to work. We'll just die right where we are....at work. I won't have the retirement that my grandparents enjoyed. I most certaintly will not be able to retire as my parents did in their late 50's. There is no way that I will EVER see retirement. I've seen my company-sponsored retirement plan plummet to almost nothing. I've seen all my employee benefits take a nose dive. I live frugally. Far more frugal then my parents did. I drive an old car. I have a modest mortgage. I work far more hours a week then my father EVER worked and yet, I just can't seem to get ahead no matter what I do. It's frustrating as all get out. And NOW I have to worry about how I'm going to save upwards of $600,000 to cover my future medical expenses. Give me a break. Like THAT is ever going to happen. By the time I retire Social Security won't be around and Medicare will be a long-ago benefit.Wonderful. All those dollars taken out of my paycheck for what will end up being years and years and years for absolutely nothing. I see nothing of any great benefit when I hit retirement age. There won't be any fancy RV rolling along the highway, no social security check to help cushion the loss of fulltime income and most certainly no medicare to help pay for my medical expenses in my old age. Life past 65 is going to pretty much be a pathetic stage of life for my generation. That's Great. JUST great.

Tc of FL 3:33PM November 12, 2008

And this folks is what we get for living in the land of "milk and honey". WHATEVER. People are fighting tooth and nail to get into this country when every hard-working decent American would float away if they could to some other country where perhaps they could AFFORD to retire. The retirement myth is just that...."a myth". My generation will be working until we are no longer able to work. We'll just die right where we are....at work. I won't have the retirement that my grandparents enjoyed. I most certaintly will not be able to retire as my parents did in their late 50's. There is no way that I will EVER see retirement. I've seen my company-sponsored retirement plan plummet to almost nothing. I've seen all my employee benefits take a nose dive. I live frugally. Far more frugal then my parents did. I drive an old car. I have a modest mortgage. I work far more hours a week then my father EVER worked and yet, I just can't seem to get ahead no matter what I do. It's frustrating as all get out. And NOW I have to worry about how I'm going to save upwards of $600,000 to cover my future medical expenses. Give me a break. Like THAT is ever going to happen. By the time I retire Social Security won't be around and Medicare will be a long-ago benefit.Wonderful. All those dollars taken out of my paycheck for what will end up being years and years and years for absolutely nothing. I see nothing of any great benefit when I hit retirement age. There won't be any fancy RV rolling along the highway, no social security check to help cushion the loss of fulltime income and most certainly no medicare to help pay for my medical expenses in my old age. Life past 65 is going to pretty much be a pathetic stage of life for my generation. That's Great. JUST great.

Tc of FL 3:32PM November 12, 2008

A New Look at Healthcare Costs in Retirement

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