Boomers wrong on health costs

According to a new survey, Americans are dramatically underestimating their retirement health care costs and insufficiently planning as a result.

The July survey of something called the First Command Financial Behaviors Index finds that 72 percent of Americans are at least somewhat concerned about health care costs in retirement, with those closest to retirement expressing the most concern. Respondents predict that they will need about $33,000 above traditional retirement savings to cover health care costs during retirement. While significant, this estimate is only a fraction of the $166,000 in out-of-pocket expenses estimated for someone retiring today and living to age 100.

Despite the fact that many Americans are concerned about the increasing costs of health care and their ability to pay for those costs in retirement, less than one-third of respondents include health care costs as part of their retirement planning. Among those, half save less than $100, 36 percent save between $100 and $300, and 14 percent save more than $300.