A man and a woman need a median of $135,000 and $154,000, respectively, in savings to have a 90 percent chance of covering Midigap premiums, Medicare Part B and D premiums and out-of-pocket prescription drug expenses for retirement at age 65 in 2012, according to new research.
The Employee Benefits Research Institute, Washington, D.C., released this finding in the October 2012 edition of Notes, a monthly newsletter from the EBRI Educational and Research Fund.
The 2012 figures, report notes, are down slightly from last year. In 2011, the median savings required for men and women to have a 90 percent chance of having enough in savings to cover prescription drug expenses through retirement were $136,000 and $156,000, respectively.
To have a 50 percent chance of covering prescription drug expenses, the report adds, men retiring at age 65 this year would need $70,000 in savings and women would require $93,000.
To have a have a 50 percent chance of covering prescription drug expenses, retiring married couples this year need $163,000. This figure jumps to $227,000 and $283,000, respectively, for married couples to have a 75 percent chance and a 90 percent chance, the report states.
Medicare currently accounts for 60 percent of heath care expenses among the non-institutionalized population of Medicare beneficiaries ages 65 and older, the report adds. Private insurance and out-of-pocket payments contributes the next two largest shares at 14 percent, and 13 percent, respectively.
The balance of healthcare expenses, the report notes, are covered by Medicaid (4 percent), the Veteran’s Administration (3 percent), other private insurance (3 percent), Tricare (2 percent) and other sources (2 percent).