Some couples with Medicare could need as much as $368,000 in savings in 2017 for health expenses, up from $350,000 in 2016.
The Employee Benefits Research Institute (EBRI) updated its previous estimates in a recently released report.
A couple with median prescription drug expenses needs $169,000 if they have a goal of having a 50-50 chance of having enough savings to cover health care expenses in retirement, according to the report. If the couple wants a 90% chance of having enough savings, they need $273,000. The estimates are 1 to 3% higher than in 2016.
For individuals in 2017, a 65-year-old man needs $73,000 in savings, and a 65-year-old woman needs $95,000 if each has a goal to have a 50% chance of having enough savings to cover premiums and median prescription drug expenses in retirement, according to the report.
Medicare Doesn’t Cover Everything
Many retirees assume that Medicare covers everything, but it generally covers only about two-thirds of the cost of health care services. Out-of-pocket spending accounts for about 12%. Medicare Advantage, Part D Prescription Drug and Medicare Supplement insurance plans can help cover what Medicare doesn’t, but retirees often underestimate how much they need to pay for those plans’ co-pays and other out-of-pocket expenses.
Educating your clients about the true costs of health care in retirement is an important step in mitigating risk in any responsible financial plan. You don’t have to be an expert on Medicare, but knowing some of the basic risks and communicating those to clients can help you and your clients make smarter decisions and better plan for health care expenses. For specific Medicare insurance questions and issues, you can refer clients to the Licensed Insurance Agents at Medicare BackOffice. One of the top concerns of pre-retirees and retirees is how to pay for health care in retirement. Showing them that you’ve secured a solution will build their trust in you, deepening your relationship.
Customize Our Letter to Your Clients
To help you share that message, we’ve created a letter that you can either email or print and email. There are two versions of the letter — conversational and formal. The conversational version includes two sentences with the necessary compliance language within the letter copy, while the formal version puts the compliance language at the bottom of the letter. Choose which version you prefer, customize it with your client’s name and your business’ information and send it as an email or a letter in the mail.
To download the letters, go to our resources page.
More Resources to Educate Clients
Our resources page also has a letter that you can send in the fall before the important Open Enrollment Period begins, our popular “Guide to Medicare: Helping You Navigate the Medicare Maze” that you can email or print, educational videos and infographics — for both you and your clients.
You also can refer clients at any time by clicking the “Refer” button in the upper right corner of the website, but only if your client has given express permission for us to call. Fill out the form, and we’ll connect with your client.
Medicare BackOffice is happy to help you and your clients and appreciates your referrals.
