More than half of retirees and roughly three-fourths of adults nearing retirement do not have enough in total retirement savings to cover healthcare costs, according to a report from the United Health Foundation and Alliance for Aging Research.
The report found half of retirees over age 65 have less than $100,000 in total retirement savings, and within that, 30 percent have less than $20,000 in total retirement savings. However, projections indicate a 65-year-old couple retiring today would need $260,000 to cover their healthcare costs in retirement, which include Medicare premiums, Medicare Part D costs, Medigap policy costs and out-of-pocket expenses, including those for dental and vision services.
Part of the issue is retirees are unsure how much to save, according to the report. Half of retirees 65 years-old and older indicated they do not know how much they need to save to cover healthcare costs.
Their younger, non-retired counterparts are also in the dark about the healthcare expenses looming in retirement, according to the report. About 36 percent of non-retired adults ages 50 to 64 do not know how much to put away in savings to cover healthcare costs in retirement. However, even if they know how much to save, the majority of adults in this age bracket do not have enough in savings. The study found about 75 percent of non-retired adults ages 50 to 64 do not have enough money in their retirement savings to cover healthcare costs alone.
The analysis projects healthcare for a 45-year-old couple retiring in 20 years — including Medicare premiums, Part D costs, Medigap and out-of-pocket expenses — will cost $590,000 in 2017 dollars.
Read the full report here.
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