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EBRI report: Estimating health costs in retirement
Old 03-03-2015, 08:10 AM   #1
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EBRI report: Estimating health costs in retirement

This came across my desk at w*rk today - pretty interesting. WSJ had an article on it yesterday:

Quote:
EBRIís findings: Recurring health-care costs appear to remain stable throughout retirementóand across all age groups. Among the Medicare-eligible population (age 65-plus), the average, annual out-of-pocket expenditure for recurring health-care expenses, according to EBRI, was $1,885.

If we assume a 2% rate of inflation and 3% rate of return on savings, a person with a life expectancy of 90 would need almost $41,000 (to be exact: $40,798) at age 65 to fund his or her recurring health-care expenses through end of live. (Note: That figure doesnít include other recurring expenses like insurance premiums or over-the-counter medications.)
Read the report

I think $41,000 seems low, but I hope it's right. I'd like to hear what our retirees think.

I apologize if this has been posted, I couldn't find it if it has.
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Old 03-03-2015, 08:16 AM   #2
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I think $41K is low and probably doesn't include long-term care expenses. Fidelity estimates a couple retiring at 65 and using the Medicare system would need about $220K including health insurance premiums, but doesn't include nursing home care. Maybe the real answer is somewhere between the two.

https://www.fidelity.com/viewpoints/...dical-expenses
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Old 03-03-2015, 08:35 AM   #3
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Wow, is all I can say. One can dream. All I can say is, don't count on expenses being anywhere near this low. I think a very optimistic estimate could be about 2-3 times that much. And then what about those insurance premiums and OTC medications that aren't included? Does the insurance fairy pay them?
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Old 03-03-2015, 08:50 AM   #4
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Quote:
Originally Posted by W2R View Post
Wow, is all I can say. One can dream. All I can say is, don't count on expenses being anywhere near this low. I think a very optimistic estimate could be about 2-3 times that much. And then what about those insurance premiums and OTC medications that aren't included? Does the insurance fairy pay them?
You got that right.

Add to the $41k per person another $100K or so for premiums, out of pocket expenses, and the multitude of things needed but not covered, and it looks closer to reality.

And that still doesn't include long term care.
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