Saving for Retirement Health-Care Costs
August 22, 2023
The data below shows the savings that a man, a woman, and a couple who retired at age 65 in 2022 might need to meet retirement health-care expenses, assuming median prescription drug expenses. The Original Medicare estimate includes premiums for Medicare Parts B and D, the Part B deductible, out-of-pocket prescription drug spending, and premiums for Medigap Plan G, which would pay most other out-of-pocket costs.
Medicare Advantage Plans — offered by private companies under Medicare oversight — require the Medicare Part B premium and typically combine hospital, medical, and prescription drug coverage. They often have limited networks and may require approval to cover certain medications and services.
Man
- Original Medicare: $166,000
- Medicare Advantage average usage: $96,000
- Medicare Advantage high usage: $134,000
Woman
- Original Medicare: $197,000
- Medicare Advantage average usage: $113,000
- Medicare Advantage high usage: $158,000
Couple
- Original Medicare: $318,000
- Medicare Advantage average usage: $184,000
- Medicare Advantage high usage: $256,000
Source: Employee Benefit Research Institute, 2023. Projections are based on a 90% chance of meeting expenses and assume savings earn a return of 7.32% from age 65 until expenditures are made. Does not include vision, hearing, dental, or long-term care expenses. Some Medicare Advantage Plans require additional premiums, which are not included.
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