A Closer Look at Healthcare Costs in Retirement
It is not as bad as the “experts” claim
This morning, I read an article in USA Today about a new report from the Employee Benefit Research Institute that suggests a couple will need to save $413,000 for healthcare costs in retirement. That is $98,000 more than the $315,000 that Fidelity’s 2023 report stated a couple needed in savings.
That is enough to scare the “you-know-what” out of anyone, especially considering that the median retirement savings is a low $164,000 for ages 65 to 74.
My advice is to take a deep breath and relax. Things aren’t that bad!
Where the numbers come from
The Employee Benefit Research Institute report states that the high cost of prescriptions is one contributor to the need for $413,000.
That same report states that a couple with a standard Medigap plan would need $351,000 just to cover premiums.
Next, the report states that to cover 90% of all out-of-pocket healthcare costs, a male would need $184,000 and a female $217,000.
T. Rowe Price also released a study stating that a 65-year-old couple could need $351,000 to pay for healthcare costs in retirement.
