November 30, 2010
--- Retirees will need a significant amount of savings to cover their
out-of-pocket health expenses, according to a new report released by the
nonpartisan Employee Benefit Research Institute (EBRI). ---
EBRI found that men retiring this year (2010) at age 65
will need anywhere from $65,000–$109,000 in savings to cover health
insurance premiums and out-of-pocket expenses in retirement if they want
a 50–50 chance of being able to have enough money; to improve the odds
to 90%, they'll need between $124,000–$211,000. Women retiring this year
at age 65 will need even more - between $88,000–$146,000 in savings if they
are comfortable with a 50% chance of having enough money, and
$143,000–$242,000 if they want a 90% chance.
These estimates are for Medicare beneficiaries age 65 and
older: Anyone retiring early, before age 65, would need even more, EBRI
noted in a press release.
The needed savings for men retiring in 2020 range from
$111,000 to $354,000, while needed savings for women range from $147,000
to $406,000 (in 2020 dollars), depending on their source of health
insurance coverage to supplement Medicare, any employer subsidies,
prescription drug use, and their savings goal related to their comfort
level with having a 50%, 75%, or 90% chance of having enough savings to
cover health insurance premiums and out-of-pocket health care expenses
in retirement.
The full report is titled "Funding Savings Needed for Health
Expenses for Persons Eligible for Medicare," and is published in the
December 2010 EBRI Issue Brief at http://www.ebri.org.
Rebecca Moore