Tag: health care costs in retirement

Couples retiring in the future could face costs of up to $551,000.

Although many older Americans are concerned about health care costs in retirement and outliving their savings, women are even more so, due in part to earning less than men throughout their careers, according to the National Council on Aging.

The Employee Benefit Research Institute (EBRI) says that due to the financial condition of the Medicare program and cutbacks to employment-based retiree health programs, in the future, individuals are going to have to pay a greater share of their health care costs in retirement.

However, those who have a health savings account are more certain about how they will cover future health care costs.

Health savings accounts (HSAs) are now being touted as a way for saving for health care expenses in retirement, but is this feasible? A recent report found employees spend 90% of their HSA assets on current medical expenses, leaving little to save/invest for the long term.

Seventy-six percent of those who are financially independent think retiring earlier will help them live longer, yet top concerns about retiring early are outliving their money and health care costs, according to a survey by TD Ameritrade.

A report from Cerulli Associates suggests that pairing HSA and DC plan communication and administration and modernizing HSA investment menus can help to position HSAs as retirement savings vehicles.

Nearly all of those who work with an adviser feel they have prepared themselves well for estimating their monthly income needs in retirement, Voya Financial learned in a survey.

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.