Thursday, April 24, 2014

Average retiree health costs could overtake Social Security benefits

Via Investment News:

Average health care costs for middle-income retirees are on a path to exceed their Social Security benefits, according to a newly created Retirement Health Care Cost Index.  The index devised by HealthView Services, a provider of Medicare, Social Security and long-term-care planning tools, measures the percentage of Social Security benefits required to pay for health care-related costs in retirement for a healthy couple receiving the average expected Social Security benefit at full retirement age.  Retirement health care costs will increase from 69% of Social Security benefits for a couple retiring next year to 98% of Social Security benefits for a healthy couple retiring 10 years from now, according to the index. For couples retiring two decades from now, the gap will be even more dramatic. They would need 127% of average Social Security benefits to cover their health care costs in retirement.  Total retirement health care costs measured by the index include all Medicare premiums, including Parts B and D, and Medigap premiums, as well as out-of-pocket costs, including co-pays not covered by Medicare. The index assumes that the primary income earner will generate the Social Security average of $1,294 per month in today's dollars and $817 per month for the lower-earning spouse. The index measures the lifetime average of health care costs, which tend to increase as retirees age.

Source/more:  Investment News Retirement

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Health Care/Long Term Care, Social Security | Permalink

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