Data and Research

Aggressive Saving Needed to Meet Retirement Health Care Costs

The average expected future retirement health care premiums for Medicare and supplemental insurance for a healthy woman retiring this year and living to 89 are projected to be $235,526.

By Rebecca Moore editors@plansponsor.com | December 07, 2016
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Health care costs could take a bite out of anyone’s retirement income, but assuming average longevity for women and men, women need to plan for much higher retirement health care expenses than men, according to a report from HealthView Services, a provider of retirement health care cost data and planning tools to the retirement industry.

The average expected future retirement health care premiums for Medicare B, D and supplemental insurance for a healthy woman retiring this year at 65-years-of-age and living to 89 are projected to be $235,526 ($153,079 in today's dollars), significantly more than the $199,946 ($135,321) for men, who are expected to live to 87, the company’s projections found. Adding in all out-of-pocket costs, hearing, vision and dental, women's total lifetime health care costs rise to $314,673 ($205,468), compared to $267,395 ($181,625) for men. These numbers assume Modified Adjusted Gross Income (MAGI) in retirement will not trigger Medicare Surcharges (Less than $85,000 or $170,000 for a couple).  

Among the unique challenges facing women are lower lifetime earnings resulting from gender pay disparities and time out of the workforce to take care of family members. These two variables inevitably impact retirement savings and Social Security income. 

According to "The High Cost of Living Longer: Women & Retirement Health Care," on average, husbands live two years fewer and are 2.3 years older than their wives. This suggests women will spend approximately four years at the end of life on their own. 

NEXT: How much savings will women need?