Very few U.S. workers approaching retirement are accumulating enough financial assets to cover post-retirement expenses, warns a recent study. The reason?
Most are planning for post-retirement living expenses — but not for all medical and long-term care expenses.
Some stats that may convince workers to ramp up their savings:
The typical remaining uninsured lifetime healthcare expenditure for a typical married couple age 65 is $197,000, according to research conducted by the Center for Retirement Research (CRR) at Boston College.
And when nursing home and long-term care costs are included, that amount jumps to $260,000, with a 5% chance of exceeding $570,000.
“Even at the peak of the stock market in 2007, less than 15% of households approaching retirement had accumulated that much in total financial assets,” says Alicia Munnell, director of the CRR.
The main sources of uninsured retiree healthcare costs: co-payments for Medicare-covered payments, and non-covered services — like nursing home care.
The chances someone will need nursing home care (and how much care they’ll need):
- About one-third of individuals turning 65 this year will need at least three months of care
- 24% will need more than a year, and
- 9% will need more than five years.