Golden Years May Be Rather Tarnished for Boomers

Some alarming news has just been released from the Center for Retirement Research at Boston College about the projected costs of health care expenses Baby Boomers can expect to face in retirement. Most Americans face the very real chance of long retirement at a standard of living considerably lower than they enjoy now.

Baby Boomers were born between 1946 and 1964. Generation Xers are also at risk of lowered standards of living in retirement due to the skyrocketing cost of health care. People born from 1965 to 1974 are considered Gen Xers.

Government estimates of today’s cost of health care expenses indicate about $3,800 a year is needed for an individual and $7,600 for a couple. This price tag includes Medicare premiums, co-payments, and other expenses that are shared between patient and provider. Out-of-pocket expenses for items not covered by Medicare, including eye glasses, hearing aids, and dental care, add another $500 to the annual cost of medical care in retirement today.

With these figures in mind, study researchers suggest a single person begin retirement with at least $102,000 allocated for medical care alone during retirement. Couples should be prepared with $206,000.

In contrast, most Americans facing retirement today have only about $60,000 saved up to cover all aspects of life during retirement, placing about 44% of all households at risk of lowered standards of living during retirement. Adding the projected cost of health care brings the number of at-risk households up to 61%.

The center’s director, Alice Munnell, describes these numbers as “shockingly large” and urges Americans to watch their weight and maintain an active lifestyle throughout their lives to help offset the cost of health care.

Source: Center for Retirement Research