The new EBRI analysis details how much savings an individual or couple will need to cover Medicare and outof-pocket health care expenses in retirement. Some prior estimates have been revised downward because of Medicare Part D (prescription drug) cost sharing that will be phased in by 2020 due to the Patient Protection and Affordable Care Act of 2010.
As I have been saying Paul Fronstin, director of EBRI's Health Research and Education Program, and a co-author of the report reiterates, “Because employers are continuing to scale back retiree health benefits, and policymakers may soon begin to address Medicare's funding shortfall, more of the financial costs of health care will be shifted to Medicare beneficiaries in the future."
The analysis deliberately does not factor in the savings needed to cover long-term care expenses or the fact that many people retire prior to becoming eligible for Medicare.
Persons currently at age 55 will need even greater savings when they turn 65 in 2020. For men retiring in 2020 range you’ll need $111,000 to $354,000, while needed savings for women range from $147,000 to $406,000 (in 2020 dollars), depending on their source of health insurance coverage to supplement Medicare, any employer subsidies, prescription drug use, and their savings goal.