Americans Saving More for Health Care in Retirement

The First Command Financial Behaviors Index reveals that average monthly savings solely for health care costs during retirement climbed to $245 in July, up 42% from a year ago.

According to a press release, one in five Americans who save for health care costs in retirement are now putting over $300 per month toward this future expense, compared to 14% in 2009.   

“This significant increase in savings is being driven by deep worries among consumers,” said Scott Spiker, CEO of First Command Financial Services, Inc., in the announcement. “More than two thirds of middle-class families are concerned about how they will pay for medical care during retirement, and they are starting to take action. Three out of ten consumers say that their current retirement planning includes saving for health care costs in retirement, separate from typical daily living expenses.”   

Survey respondents predict they will need more than $100,000 above traditional retirement savings to cover health care costs during retirement.  

Fidelity Investments’ annual Retiree Health Care Costs Estimate indicates a 65-year-old couple retiring this year will need $250,000 to pay for medical expenses throughout retirement, not including nursing home care (see Fidelity Retiree Health Cost Estimate Jumps to Quarter of a Million).  

The First Command Financial Behaviors Index is a monthly survey of approximately 1,000 U.S. consumers aged 25 to 70 with annual household incomes of at least $50,000.