The health care tab for a retired couple will be $567,903 — and that's if you're healthy: study

The health care tab for a retired couple will be $567,903 — and that's if you're healthy: study
The average, healthy 65-year-old couple who wants to retire probably has larger health care costs than you think.
MAY 15, 2016
By  Bloomberg
The projected tab for an average, healthy 65-year-old couple retiring this year, in lifetime premiums for Medicare Parts B and D and supplemental insurance, is $288,000, according to the HealthView Services 2016 Retirement Health Care Costs Data Report. Add in out-of-pocket expenses, including dental, hearing, and vision care, and the bill reaches $377,412. That's in today's dollars. You want it in tomorrow's? Adjusting for inflation, the report projects the lifetime premium costs at $435,472. Add in deductibles, copayments, hearing, vision, and dental, and it's $567,903. Millennials and Gen Xers, this means you, too. If you need more motivation to save for retirement, flipping through the 16-page report will do it. You'll find memorable facts like these:  • A 65-year-old couple retiring this year would need 57% of their Social Security payments just to cover their health care expenses. For a couple 10 years younger, with plans to retire in 2026, that jumps to 88%. For a 45-year-old couple, it's 116%. Younger people can do the ugly extrapolation from there. • From 2015 to 2016, retirement health care costs are projected to jump 7.3%, partly because of a 16.1% rise in monthly Medicare Part B premiums (for doctors and preventive services) over that period, from $104.90 last year to $121.80 this year. • A 30-year-old woman who retires at 65 will face about $119,000 more in expenses than her male counterpart, the report forecasts. That's based on women living until age 91 and men living until 87. The figures, in today's dollars, are $548,098 for women and $429,466 for men. http://www.investmentnews.com/wp-content/uploads/assets/graphics src="/wp-content/uploads2016/05/CI105329519.PNG" • For someone who retires this month, HealthView expects health-care inflation to average just over 5.1% annually for the next two decades. But "since supplemental insurance premiums are age-based, future retirees could face an additional annual 4.5% increase (or more) for supplemental plan coverage," the report said.  • The state you live in plays a big part in your Medicare Part D coverage (for prescription drugs) and cost. HealthView took costs based on the latest projections from the most popular supplemental plan, Plan F. It found, for example, a gap of 49% between premiums for the insurance in Hawaii and Massachusetts. The tally in Massachusetts for a 55-year-old retiring at 65 and living to 89 is $116,790. In Hawaii, it's $173,583.  • With lowered thresholds for Medicare means testing, starting in 2018, wealthier retirees will face increased surcharges on Parts B and D based on their modified adjusted gross income (yes, the acronym is MAGI). "Since the levels are not currently indexed to inflation," the report says, "as salaries grow over time many middle-class retirees may eventually fall into upper MAGI brackets and face even higher surcharges."       Well, it's upward mobility, anyway.

Latest News

SEC bars ex-broker who sold clients phony private equity fund
SEC bars ex-broker who sold clients phony private equity fund

Rajesh Markan earlier this year pleaded guilty to one count of criminal fraud related to his sale of fake investments to 10 clients totaling $2.9 million.

The key to attracting and retaining the next generation of advisors? Client-focused training
The key to attracting and retaining the next generation of advisors? Client-focused training

From building trust to steering through emotions and responding to client challenges, new advisors need human skills to shape the future of the advice industry.

Chuck Roberts, ex-star at Stifel, barred from the securities industry
Chuck Roberts, ex-star at Stifel, barred from the securities industry

"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.

SEC to weigh ‘innovation exception’ tied to crypto, Atkins says
SEC to weigh ‘innovation exception’ tied to crypto, Atkins says

Chair also praised the passage of stablecoin legislation this week.

Brooklyn-based Maridea snaps up former LPL affiliate to expand in the Midwest
Brooklyn-based Maridea snaps up former LPL affiliate to expand in the Midwest

Maridea Wealth Management's deal in Chicago, Illinois is its first after securing a strategic investment in April.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.