A 2013 projection, generated by the Employee Benefit Research Institute, on possible medication costs during retirement is a real eye-opener. Put on your seat belts for this. A couple with what is considered to be about average requirements would need to spend about $150,000 for a 50 percent chance of having sufficient money to cover medication costs. That assumes they have Medicare and supplemental insurance.
It gets more sticker-shocking if you are a couple in a much higher percentile of drug spending: $220,000!
The report makes this conclusion: “In 2010, Medicare covered 62 percent of the cost of health care services for Medicare beneficiaries age 65 and older, while out-of-pocket spending accounted for 12 percent, and private insurance covered 13 percent. Individuals can expect to pay a greater share of their costs out-of-pocket in the future because of the combination of the financial condition of the Medicare program and cutbacks to employment-based retiree health programs. Issues surrounding retirement income security are certain to become an even greater challenge in the future, as employers continue to scale back retiree health benefits and as policymakers begin to realistically address financial issues in the Medicare program with solutions that are likely to shift more responsibility for health care costs to Medicare beneficiaries.”
My Viewpoint: This report makes clear the obvious. There is no free ride for anybody, and less so in the years ahead as more and more of the 80 million-strong Baby Boomer generation becomes increasingly eligible for Medicare benefits.
What This Means to You: You can open a health savings account as well as try to participate in wellness programs offered in your community or perhaps by your employer. Above all, you must try to enhance your health status as much as possible.
Recommendation: This website is full of my recommendations on how to improve your health as you get older. Health is really about self-responsibility, and doing as much as you can to enjoy your retirement years. A good starting point is right here.
To access the report, click here.
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