AARP flags lack of planning for health costs in retirement

Of the 1,000 individuals surveyed, the largest proportion (26 percent) believe they will need to accumulate between $50,000 and $100,000 by the time they retire to cover the costs of health care, nursing care, prescription drugs and health insurance. This compares with smaller percentages of respondents who peg the requisite amount of savings at:

• More than $200,000 (24 percent);
• $100,000-$200,000 (16 percent);
• Less than $50,000 (16 percent);
• Don’t know (15 percent).

The survey observes that while many adults have given some thought to health care costs in retirement, confidence in having enough money to pay for these costs is much lower. Just over a third of adults ages 50-64 are somewhat confident (36 percent), as compared to about one in six individuals (16 percent) who are very confident.

The report adds that individuals reporting a household income of $75,000 per year or more (62 percent) are much more likely to say they have money set aside than those with a household income of $25,000-$50,000 (29 percent) and less than $25,000 per year (11 percent).

“The results of this survey suggest that most adults in their 50s and early 60s have not begun saving for health care costs they may incur during their retirement years,” the report states. “Consequently, confidence in being able to afford health care costs in retirement is weak.”