Sunday, June 1, 2008

Start Saving Now

Saving A new report from EBRI estimates that people retiring today will need some $200,000 in savings just to pay for future health care:

This paper provides estimates for savings needed to cover health insurance to supplement Medicare and out-of-pocket expenses for health care services in retirement. It finds that a male age 65 in 2008 and retiring at age 65 will need anywhere from $64,000 to $159,000 in savings to cover health insurance premiums and out-of-pocket expenses in retirement if they are comfortable with a 50 percent chance of having enough money and $196,000 to $331,000 if they prefer a 90 percent chance. Women age 65 retiring in 2008 will need anywhere from $86,000 to $184,000 in savings to cover health insurance premiums and out-of-pocket expenses in retirement if they are comfortable with a 50 percent chance of having enough money, and $223,000 to $390,000 if they prefer a 90 percent chance. Persons currently age 55 will need even greater savings when they turn 65 in 2018.

See Paul Fronstin et al., Savings Needed to Fund Health Insurance and Health Care Expenses in Retirement: Findings from a Simulation Model.

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Comments

I’m under 25. Statistically, I should be swamped with debt. I also shouldn’t have any savings. I have far too many friends my age who live paycheck to paycheck, but not because they make low wages. The term paycheck to paycheck is actually a misnomer. They’re really living bill to bill, because they save enough money to cover the next rent payment, cell phone bill, or tank of gas. After that, they consider their paycheck to be free game! Dinners and dates, movies and music - they have the money until next month’s bills.

I’m going to be honest: I’m terrified about retirement. I’ll probably work until I die, but I’m still saving for it now. Then again, I’ve had a retirement account since I was 16, so I was never fiscally normal for my age.

Posted by: Books and Suits | Jun 1, 2008 7:05:54 PM

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