Retirees may well worry about health-care reform
Marketwatch, June 16th, 2009
If things weren't bleak before, they certainly are
now. Men and women retiring today will need truckloads of money to pay
for health-care expenses over the course of their retirement, according
to a new study.
And that was the case long before we learned that President Barack
Obama plans to cut $313 billion in Medicare and Medicaid spending and
reform this nation's health-care system. It's anybody's guess what
retirees might need if those reform plans become a reality.
For the time being, at least, the reality is this: Men retiring at
age 65 in 2009 will need from $68,000 to $173,000 in savings to cover
health-insurance premiums and out-of-pocket expenses in retirement if
they want a 50/50 chance of being able to have enough money, and
$134,000 to $378,000 if they prefer a 90% chance, according to a study
published last week by the Employee Benefits Research Institute.
Meanwhile, women -- with their greater longevity -- will need even more
money. A women retiring at age 65 in 2009 will need from $98,000 to
$242,000 in savings to cover insurance premiums and out-of-pocket
expenses in retirement for a 50/50 chance of having enough money, and
$164,000 to $450,000 for a 90% chance, said Paul Fronstin, an EBRI
researcher, in the report. Read the report on the EBRI site.
But it gets worse. Many Americans may need even more money than the
amounts cited above, Fronstin said, because his "analysis does not
factor in the savings needed to cover long-term care expenses, nor does
it take into account the fact that many individuals retire prior to
becoming eligible for Medicare."
Simply opening one's eyes to the issue is key, said Stephen Huth of CCH
Inc., a Riverwoods, Ill., publisher and unit of Wolters Kluwer. "Just
knowing this is a problem is a good first step," he said. "Few
individuals plan for retirement at all, and a small percentage of those
even think about health-care costs.
"Even with all the talk about health-care reform, little has been said
about the looming crisis for many older individuals," he said.
Read more of this article.