Retirees' biggest fear is becoming their most pressing reality: they may not be able to cover the cost of health care in retirement.
A full spread of Medicare coverage can cost more than $3,900 a year. However a study from the Center for Retirement Research at Boston College found 44% of men over 65 and 58% of women of the same age require some form of long-term care, which is not covered by Medicare. According to the Federal Long Term Care Insurance Program, the average cost for an assisted living facility is $47,064 per year, while around-the-clock care in a semiprivate room at a nursing home runs approximately $91,615.
That isn't great news for the 41% of Americans rank health care as the expense they are most worried about, according to a report from Voya Financial, but it's going to be an unpleasant surprise for the 81% who have not estimated the total amount health care will cost them in retirement. When asked to calculate the cost, most expect retirement health care expenses to be well below national estimates. The majority of Americans (66%) estimate retirement health care expenses would cost $100,000 or less, with 31% guessing $25,000 or less. However, the Employee Benefit Research Institute (EBRI) notes that a 65-year-old man would need $127,000 in savings to cover those expenses. Meanwhile, a 65-year-old woman would need $143,000 to give each of them a 90% chance of having enough savings to cover health care expenses in retirement.
Then again, if you're struggling with health care costs now, why should it surprise you that they'll be a burden later? As Bankrate notes, one-in-four American families have decided not to seek medical attention when they needed it within the last year because of the cost. Older millennials, ages 27 to 36, were the most likely shy away from medical treatment (32%). They don't exactly see it getting better, with more than half of Americans (56%) worried that they might not have affordable health insurance in the future. Generation X, ages 37 to 52, are most concerned (64%), followed by Baby Boomers (55 and over, 58%) and Millennials (18-36, 56%). Although the current presidential administration promises to bring a better healthcare option to U.S. citizens, Americans say they prefer the Affordable Care Act (introduced by the Obama administration in 2010) to the Republican alternative by a 43% to 25% margin. The results are the same across almost all demographics, though Republicans (54%) favor the new legislation more than Democrats (10%) or Independents (26%).