Continuing a recent trend, the amount of savings that Medicare beneficiaries could need for health-related expenses rose again in 2023, the Employee Benefit Research Institute reported this week.
To project how much Medicare beneficiaries may need to save to have a reasonable chance of paying for their health care spending requirements in retirement, EBRI uses a simulation model that allows for uncertainty due to mortality and rates of return on assets in retirement, according to Jake Spiegel, an EBRI research associate.
This model incorporates recent changes to Medicare Part D enacted by the Inflation Reduction Act of 2022, and tests different assumptions about Medicare Advantage and Medigap plans that beneficiaries may purchase.
"The output of this updated simulation model is the basis of this new report," Spiegel said.
The study found that a woman will need to have saved $217,000 in order to have a 90% chance of meeting her health care spending needs in retirement, while a man will need to have saved $184,000.
Couples enrolled in a Medigap plan with average premiums will need to have saved $351,000 to have a 90% chance of covering their medical expenditures in retirement.
