Retirees spend more than a third of their Social Security benefits on out-of-pocket medical costs, on average, according to a new study by the Center for Retirement Research at Boston College.
Even after factoring in other sources of income, medical spending still took a huge bite – 18% – of seniors’ total retirement income.
A 65-year-old couple retiring now will need $275,000 to cover out-of-pocket health care costs during retirement, according to a study by Fidelity.
The news gets even worse, however, because these numbers do not include the cost of nursing home or home health care.
That can range from $40,000 a year for home health aides… to over $85,000 a year for a semi-private room in a nursing home, according to the Genworth 2017 Annual Cost of Care Survey: Costs Continue to Rise Across All Care Settings. And if you prefer a private nursing care room, you’ll have to cough up almost $100,000 a year.
Ignore the likelihood of needing long-term care services at your own peril: At least 70% of people over age 65 will require long-term care services, and more than 40% will need nursing home care, according to the U.S. Department of Health and Human Services.
Based on the average cost of a nursing home room and the average length of stay – which is 2.8 years – you would need over $250,000 to cover a single stay. [Read more…] “Why You’ll Need $500,000+ in Retirement for Medical Expenses Alone”