How healthy are you? Your current level of health risk makes a big impact on how much you might spend.
There are lots of Medicare plans available, with different levels of coverage. You’ll need to choose based on your health needs.
Amount employer subsidizes
If an employer has been carrying part of the weight of your health care costs, the loss of those subsidies can make your retiree health insurance costs feel much higher.
If you retire before age 65, you’ll need to cover your own health insurance until Medicare kicks in.
Depending on where you retire, you’ll pay higher or lower than the average cost of health care.
Income in retirement
If you have a lot of money coming in, you’ll pay higher premiums for Medicare.
Putting it together
Here’s an example of how these factors could play out for a woman who’s age 60 right now.
Your own costs will vary
Your expected health care costs will be different than anyone else’s. You’ll need to take into account the factors above to get an accurate assessment.
Consider health care options before you retire
Your total retirement spending might be higher than planned once you accurately account for the cost of health care in retirement—especially if your employer has been generously subsidizing your preretirement costs.
As health costs rise, others come down
For most people, increased costs on health care later in life will be somewhat offset by reduced spending on other categories.
Make health care spending part of your budget
You’ll find it much more useful to think about health care spending as an annual part of your budget, as opposed to a huge lifetime lump sum.
Long-term care costs are different
You might not need to pay for long-term care at all, but if you do, it can be really expensive. Your retirement plan should separately address the potential for long-term care costs.
*For a 65-year-old woman in 2018.
**Average amount spent per worker for employee-only coverage, among employers who offer health care benefits.
Unless otherwise noted, figures are sourced using the Mercer-Vanguard health care cost model, 2018. For more information on the data, see Planning for health care in retirement.