EBRI says the main reason for the increase in needed savings is related to the adjustment that is made each year to re-establish the baseline for out-of-pocket spending associated with prescription drug use.
Workers with generous employer health care benefits that may not be offered in retirement and those at higher risk of chronic conditions because of their family history or current health status should target higher savings rates.
Due to the variations in a person’s life and health status year over year, joint research from Vanguard and Mercer encourages investors to focus on factors they can control and plan accordingly using five guidelines.
More than four in 10 retirees report that their health care expenses in retirement are higher than they expected and one-quarter say long-term care costs have been higher.