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Planning for Retirement Health Care Costs

Executive Summary

Affording health care costs is a concern for people of all ages as these costs are considered to be one of the larger expenses clients will face in retirement.

This is a valid concern. Health care costs in retirement can add up, even if you are healthy.

Top 5 Fears About Retirement

Top Five Fears About Retirement

Source: Employee Financial Wellness Survey, PwC US, 2018.
PwC’s Employee Financial Wellness Survey tracks the financial and retirement well-being of working U.S. adults nationwide. The 2018 survey incorporates the views of 1,600 full-time employed adults representative of the U.S. population by age and gender. The margin of error is +/- 3%. Participants are categorized by generation using the following age groups: 21 to 36 (Millennials), 37 to 57 (Gen X) and 58 to 75 (Baby Boomers). 

After age 65, Medicare covers about half of your expected health care expenses.1 Supplemental Medigap insurance can help cover the gap. But even with extra insurance, health care in retirement may be more costly than many expect.

Estimated Annual Health Care Expenses

Estimated Annual Expenses

Source: T. Rowe Price estimates based on projected 2019 Medicare premiums and data from the Health and Retirement Study (HRS). Health and Retirement Study, (HRS) public use dataset. Produced and distributed by the University of Michigan with funding from the National Institute on Aging (grant number NIA U01AG009740). Ann Arbor, MI. All costs are rounded to the nearest hundred. Premium percentage of total health care expenses includes the median percentage share of individual health insurance premiums (ages 65 and above) for Medicare Parts A, B, D and Medigap. Medigap policies bought directly from an insurance company, an insurance exchange, or group plans provided by AARP are considered for these calculations. Costs of long-term care are not included in the analysis.

How the Health Care Dollar is Spent

How the Health Care Dollar is Spent

Source: Centers for Medicare and Medicaid Services, National Health Expenditures, 2017.

Planning for Retirement Health Care Costs

Download the Program Guide

Health Care Program Guide

One of the biggest fears people have about retirement is not being able to afford quality health care—yet many fail to plan and budget for these costs.

Program Support

Health Care Costs Presentation

Health Care Costs Presentation

Health Care Costs Conversation Starter

Health Care Costs Hard Card

Health Care Costs White Paper

Health Care Costs Positioning Statement

1 Centers for Medicare & Medicaid Services.

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