What would you and your spouse do with $351,000 when you retire?
That may sound like a nice nest egg, but you may need every penny just to cover health care costs in retirement, including Medicare premiums and drugs after insurance pays its part, according to recent research.
And that figure is conservative, the research notes.
Americans already lack retirement savings. A New York Life survey of 2,202 adults last month showed only 4 in 10 have a nest egg, even though 74% expect to retire at 64. That shortfall means many retirees may find their golden years tarnished by financial stress.
“People have so many different financial goals pulling them in a million different directions that they don’t always realize how high health care costs can be,” said Jake Spiegel, an associate at the nonpartisan, nonprofit Employee Benefit Research Institute (EBRI) and co-author of the health care savings report.
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How much should you save for health care in retirement?
Assuming retirees have Medicare Part A (hospital), B (medical), D (drugs) and G (expenses not covered by Part A and B such as coinsurance and copays), the report says the amounts below are what people need for a 90% chance of meeting their health care expenses, including premiums and out-of-pocket costs:
- A 65-year-old man with average premiums will need $184,000 in savings and a woman will need $217,000.
- Couples will need $351,000.
- Representing an…
