Health care savings needed for retirement increases: EBRI

In 2017, a 65-year-old man needs $73,000 in savings and a 65-year-old woman needs $95,000 if each have a goal of having a 50 percent chance of having enough savings to cover premiums and median prescription drug expenses in retirement, according to research from the Employee Benefit Research Institute (EBRI). If they want a 90 percent chance of having enough savings, the man needs $131,000 and the woman needs $147,000.

The EBRI study examines the amount of savings Medicare beneficiaries are projected to need to cover program premiums, deductibles, and certain other health expenses in retirement. The survey found the following:

  • A couple with median prescription drug expenses needs $169,000 if they have a goal of having a 50 percent chance of having enough savings to cover health care expenses in retirement. If the couple wants a 90 percent chance of having enough savings, they need $273,000.
  • For a couple with drug expenses at the 90th percentile throughout retirement who want a 90 percent chance of having enough money saved for health care expenses in retirement by age 65, targeted savings is $368,000 in 2017.
  • From 2016 to 2017, projected savings targets increased between 1 percent and 6 percent. In contrast, savings targets declined between 2011 and 2014, but then increased from 2014 to 2016 as well. Despite the increase in savings targets since 2014, the 2017 savings targets continue to be lower than they were in 2012 almost across the board.

SOURCE: www.ebri.org
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