Retiring and saving for Medicare costs

jkom51February 8, 2012

This is for those Boomers who are thinking about an upcoming retirement and want to estimate expenses. I'll copy this in its entirety as few people have WSJournal subscriptions so a link wouldn't be useful. Also it's very short - more a "think about this beforehand" which might help some folks here.


Saving Up for Medicare

WSJournal February 7, 2012

Let's get this straight: Medicare pays for very little long-term care, and you�ll still need significant savings to cover the rest of your medical expenses.

But very few retirees have come to terms with that depressing reality.

A new survey of 800 middle-income Americans found that 66% of Medicare recipients - people already on Medicare - did not know if the program covers long-term care or estimate its long-term care coverage.

Despite the fact that the survey was paid for by Bankers Life and Casualty, which sells supplemental Medicare insurance, this sobering finding is still worth thinking about: Two-thirds of those on Medicare also said they pay the same, or more, for healthcare now than when they were working. They have been unpleasantly surprised by the cost of Medicare Part B premiums, what you pay for doctor and outpatient coverage, with 44% paying more than they had expected. Part B premiums for Medicare enrollees with higher incomes are now means-tested, meaning the premiums are charged on a sliding scale.

A nonprofit group, the Employee Benefit Research Institute, estimates that a man with median drug costs would need $65,000 in savings, and a woman would need $93,000, to have a 50-50 chance of having enough money to cover health-care expenses in retirement. To have a 90% chance, a man would need $124,000, and a woman would need $152,000.

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Looking at that and knowing what our insurance pays for the cancer treatments, heart/breathing problems etc. That would be low and/or wiped out in a very short time.
One cancer treatment is over 12,000.00,
Also if you are diabetic, figure on paying at least 134.00 for 100 test strips.

    Bookmark   February 15, 2012 at 4:56PM
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It's a bit misleading to lump medical costs and long term care insurance into the same bucket. Both should be included in a retirement plan, but they aren't really the same thing.

Also, while $65k seems like a big chunk, it is only a couple thousand per year over a 20+ year span. That is comparable to what most young, healthy people pay in insurance premiums and routine care.

    Bookmark   February 16, 2012 at 8:20AM
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Everyone should know Medicare does not pay for long-term care, eyeglasses or dental expenses. You really need to investigate long-term care or have enough savings. Most people rack up huge bills in their last year of life.

    Bookmark   February 16, 2012 at 9:36AM
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beachlily z9a

When my husband had chemo, our insurance paid 80%, just like Medicare. Our portion of the bill was $30,000. Luckily we could pay it. Now that we are on Medicare, we keep the other insurance to pay the 20%, good thing too. My DH has had 2 other cancers with expensive treatments. Thanks to Agent Orange. We would never trust his health to a the Dept. of Veterans Affairs or a Veterans Hospital.

    Bookmark   February 21, 2012 at 6:11PM
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