Retirees and Post-retirement Medicare Costs

1 minute read

An Employee Benefit Research Institute study found that retirees will need to save hundreds of thousands of dollars to cover Medicare costs. These costs include prescription drugs, premiums, deductibles, and any other out-of-pocket costs.

The research for the study used a simulation model, meaning that variable factors were used. Then it was determined how much money was needed to cover out-of-pocket costs.

Survey Findings

Here are some of the study’s findings:

• $318,000 – The average projected amount couples will need to save to have a 90% chance in covering post-retirement medical costs.
• $197,000 – The amount in savings a woman will need to have to pay for health care costs in retirement.
• $166,000 - The amount in savings a man will need to save to pay for health care costs in retirement.
• $383,000 – The amount a couple with high prescription expenses will need to save to have a 90% chance of covering health care expenses after retirement.
• Individuals enrolled in Medicare Advantage plans generally have lower savings requirements.

It’s important to note that these are projected costs of health care and that the data provided in the simulation was varied. Actual prices for retiree health care would vary depending upon the person and their situation. Download the bulletin for more details.