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May 19, 2016 at 08:21 AM
(Bloomberg) – Take the Orient Express! Trek in Bhutan! Pay for health care!
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 percent 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 percent. For a 45-year-old couple, it’s 116 percent.
Younger people can do the ugly extrapolation from there. From 2015 to 2016, retirement health-care costs are projected to jump 7.3 percent, partly because of a 16.1 percent 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.
For someone who retires this month, HealthView expects health-care inflation to average just over 5.1 percent annually for the next two decades. But “since supplemental insurance premiums are age-based, future retirees could face an additional annual 4.5 percent increase (or more) for supplemental plan coverage,” the report said.
