Medical costs integral part of retirement planning

By BenefitsPro


By Paula Aven Gladych

Future health care costs are becoming an even more important part of retirement planning.

Nearly three-quarters of Americans believe that medical expenses are extremely or very important when it comes to planning for retirement, according to the 2012 Health Confidence Survey, sponsored by the Employee Benefit Research Institute and Mathew Greenwald and Associates.

The percentage of individuals reporting that medical expenses were extremely important in retirement planning jumped from 27 percent in 2003 to 45 percent last year.

A recent EBRI analysis found that a 65-year-old couple, both with median drug expenses, would need $163,000 in 2012 to have a 50 percent chance of having enough money to cover health care expenses in retirement, not including long-term care. They would need $227,000 to have a 75 percent chance of covering those expenses and $283,000 to have a 90 percent chance of doing so.

In 2003, 15 percent of workers said they would retire earlier than planned if they were guaranteed access to health insurance, but by 2012, that number had increased to 27 percent.

EBRI is a private, nonpartisan, nonprofit research institute based in Washington, D.C., that focuses on health, savings, retirement and economic security.

Originally published on BenefitsPro.com