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Health
care costs, lack of savings might contribute
to lower standard of living for future
retirees, study finds
[Feb 19, 2008] Sixty-one percent of baby
boomers and members of Generation X are "at
risk" of being unable to maintain their
standard of living in retirement, in part
because of rising health care costs,
according to a study released on Tuesday by
the
Center
for Retirement Research at Boston
College, the
AP/Houston Chronicle
reports.
The federal government estimates that an
individual's cost for Medicare premiums,
copayments and cost-sharing is about $3,800
annually and about $7,600 annually for a
retiring couple.
Costs for health services not paid for by
Medicare -- such as dental and eye care, and
hearing aids -- total about $500 per
individual annually.
According to the study, an individual would
need to save about $102,000, and a couple
would need to save about $206,000, to cover
the costs of health care in retirement.
However, the median retirement savings
balance for households approaching
retirement is $60,000, the study found.
Without considering health costs, 44% of
baby boomers, people born between 1946 and
1964, and Gen Xers, people born between 1965
and 1974, are at risk of being unable to
maintain their standard of living in
retirement, according to the study.
Alicia Munnell, director of the center,
called the estimates "shockingly large,"
adding, "The most effective step is to plan
on working a few years longer" because that
"cuts the percent at risk by about 10
percentage points." She also said that
healthy habits such as maintaining a normal
weight and exercising more also can help to
hold down an individual's health care costs
(Alt Powell,
AP/Houston Chronicle,
2/19).
The
study is available
online.
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