The cash needed to cover health care needs in retirement - AMAC & Yahoo Finance
Brian O’Connor of Yahoo Finance has a piece here explaining the math one needs to know to finance health care costs in retirement, especially since Social Security replaces a mere 40% of pre-retirement income. He cites the Fidelity Retiree Health Care Cost Estimate which states baby boomer couples should expect to spend $315,000 during a 20-year retirement for co-pays, deductibles, premiums, prescriptions and other health care costs. But that compares with just $202,000, the amount stashed away by the average 65-year-old as per the Transamerica Center for Retirement Studies. The gap is a $113,000 shortfall by age 80 — and many retirees will live much longer. O’Connor advocates health savings accounts, separating long-term care and catastrophic care costs, as well as other tips to deal with the situation. Full piece here.