As Medicare Health Costs Soar to $383,000 for Couples, Retirement Savings May Not Be Enough

It is possible for retirement savings to fall short if you require a large amount of medication in the future, even if you have been following recommended retirement savings plans to retire comfortably. According to the Employee Benefit Research Institute, couples may need as much as $383,000 saved, earning 7.32% with investment returns yearly, to have a 90% chance of covering their healthcare costs in retirement.

The latest simulation by EBRI takes changes to Medicare Part D into account, and it has found that a 65-year-old man with a Medigap plan will need $96,000 in retirement savings to have a 50% chance of covering premiums plus prescription drug costs, while a woman in the same situation would need $116,000. For a 90% chance of meeting healthcare costs, a man would need $166,000 and a woman would need $197,000. Couples enrolled in Medigap would need a combined $212,000 to have a 50% chance of covering their healthcare expenses and $318,000 to have a 90% chance. However, if the couple has exceptionally high prescription drug costs, this number could be as high as $383,000.

Choosing a different plan such as a Medicare Advantage plan may help reduce costs, with couples in these plans only needing $184,000 to secure a 90% chance of covering their healthcare costs. However, these plans may have limited networks or require more steps to be approved for certain medications or services.

Lifestyle choices made today can affect future healthcare costs. For example, shedding just 7% of body fat can reduce the risk of diabetes by almost 60%, and regular exercise can lower the risk of various illnesses. Eating a healthy diet that includes plant-based foods and healthy fats can also help achieve and maintain a healthy weight and heart health. While there is always some level of uncertainty and anyone can get sick at any time, exercising and eating right can help prevent certain diseases as you age.