US. This Chart Shows How Much Health Care Will Cost in Retirement – at Every Age
Here’s some good news about medical expenses in retirement: health care inflation has slowed over the past year, lowering your projected lifetime tab, according to a new report. And here’s the bad news: even at this lower growth rate, health care expenses are a runaway train that can plow a hole into the most carefully constructed budget.
Retirement health care expenses are projected to rise at an average annual rate of 4.2%, versus an estimated 5.5% last year, according to a report released last week by HealthView Services, a Danvers, Mass.-based company that provides retirement health care cost data and tools to financial advisors. The report attributed this decline primarily to slower growth in the cost of prescription drugs.
But this lower medical inflation growth rate is still much steeper than general inflation, which has hovered around 2.7% for the past year. The increase compounds over time: annual medical costs for a 65-year-old couple retiring today are a projected $11,752. By age 85, this amount will rise to a projected $31,966 in future dollars, according to the report, a whopping 170% increase.
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