Employment-based benefits, with premiums not subsidized by a former employer:
This example assumes a 65-year-old individual supplements Medicare with retiree health benefits from a former employer but the premiums are not subsidized by a former employer. The savings needed are:
Man: A man would need $102,000 in current savings to have a 50 percent chance of having enough money to cover health care expenses in retirement, or $196,000 in current savings for a 90 percent chance of having enough to cover retiree health costs.
Woman: A woman would need current savings of $137,000 to have a 50 percent chance of having enough money for retiree health expenses, or $224,000 to have a 90 percent chance of having enough savings to cover retiree health costs. Again, the numbers are higher for women because of greater longevity.
Married couple: A married couple would need savings of $246,000 to have a 50 percent chance of having enough money for retirement health costs, or $376,000 for a 90 percent chance.
Medicare, with individually purchased supplemental insurance:
The example assumes 65-year-old individuals who do not have employment-based retiree health benefits and instead supplement Medicare with the individually purchased Medigap (Plan F) and Medicare Part D outpatient drug coverage. The estimates note that projections of the savings needed to cover out-of-pocket drug expenses are subject to a number of variables. The estimates presented in the Issue Brief show the differences for individuals and couples with three levels of prescription drug use: 50th percentile (median drug expenses), 75th percentile, and 90th percentile (high).
Man: A man with median (50th percentile) drug expenditures would need
$79,000 in current savings to have a 50 percent chance of having enough
money to cover health care expenses in retireme
|SOURCE Employee Benefit Research Institute|
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