New estimates of savings needed for medical care in retirement

Too many people assume that Medicare will cover their medical costs after age 65 and fail to save. While Medicare does pay almost two thirds of seniors’ health costs, a new analysis by EBRI finds that an average American 65 year old man retiring this year without employer-sponsored premium assistance needs $109,000 in savings just to be 50% sure of covering his future medical bills. Women need to save even more at $146,000. To be 90% sure, they would need $211,000 and $242,000 respectively. That man, if he retires in 2020, needs $183,000. Retirees lucky enough to have employer subsidies are not off the hook – men retiring in 2010 need $66,000 and women need $88,000 in savings to meet just median likely health costs. Not surprisingly, CT is the most expensive state for Medigap coverage and we should be saving even more.
Ellen Andrews