Some Couples Could Need as Much as $469,000 in Savings
The percentage of private-sector establishments offering retiree health benefits has been falling. As access to retiree health benefits becomes increasingly rare, the responsibility for health care expenses in retirement will fall more on the shoulders of today’s workers. To project how much Medicare beneficiaries may need to save to have a reasonable chance of meeting their health care spending requirements in retirement, the Employee Benefit Research Institute (EBRI) built a simulation model allowing for uncertainty due to mortality and investment returns. The model reflects the Inflation Reduction Act’s $2,000 cap on Part D out-of-pocket spending in 2025 and varying assumptions about Medicare Advantage and Medigap coverage.
EBRI’s analysis finds:
- The predicted savings target increased slightly from last year for Medicare beneficiaries enrolled in Medigap Plan G and remains sensitive to assumptions about premiums, drug costs, and health care use.
- A 65-year-old man enrolled in a Medigap plan with average premiums will need to have saved $120,000 to have a 50 percent chance of having enough to cover premiums and median prescription drug expenditures, and a 65-year-old woman will need to have saved $146,000.
- To have a 90 percent chance of meeting their health care spending needs in retirement, a man will need to have saved $212,000, and a woman will need to have saved $252,000. Couples enrolled in a Medigap plan with average premiums, meanwhile, will need to have saved $267,000 to have a 50 percent chance of covering their medical expenditures in retirement and $405,000 to have a 90 percent chance.
- Representing an extreme case, a couple with particularly high prescription drug expenditures will need to have saved $469,000 to have a 90 percent chance of having enough money to cover their health care costs in retirement.
- Although there is significant individual-level variation, enrollees in Medicare Advantage plans generally have lower savings targets. A man enrolled in Medicare Advantage who has median drug expenditures and an average usage of health care services will need to have saved $61,000 to have a 50 percent chance of meeting his health care spending requirements in retirement, and he would need $106,000 to have a 90 percent chance. Meanwhile, a woman will need to have saved $74,000 to have a 50 percent chance and $125,000 to have a 90 percent chance of having enough to cover her health care costs in retirement. Couples will need to have saved $135,000 to have a 50 percent chance and $203,000 to have a 90 percent chance of covering their health care expenditures in retirement. Other factors also affect the choice between Medicare Advantage and traditional Medicare. Medicare Advantage plans often have limited networks or may require approval before certain medications or services are covered.
Figure 9 Figure 2 Figure 11 Figure 6 Savings Needed for Medigap Premiums, Medicare Part B Premiums and Source of Payment for Incurred Health Care Expenses, Percentage of State Government Employers Deductibles, Medicare Part D Premiums, and Out-of-Pocket Drug Savings Needed for Medicare Part B Premiums, Medicare Part D Figure 4 11 Noninstitutionalized Population of Medicare Beneficiaries, Fi I A d S Fi tur na g avings s is ur ing s lly aum els , 10 ro w etim hil , pt irSa e p e Tar m ions or v ot e ings N tnt he age nt .r A E t t o Ie B r n mos s e RI not o dtund H e o st d e udie t t tC o ha co a H tses, s c ver a te v he onsi ealt t a sa his H 90 d h Expe ve e ings ta r ralt e P e su expe rc h I lte s in p rnt ns gns e ns e C ts p s a ha re ur es nc sent ss re a oc se i en Retir nc of nt ia vt a ee e H lue d d a P in t v w s of ing r ite his e h long m E m fun noug piu e a dp nt s ne -m e th M e r rs m m e one d a and c y ea dnot ry e a for taOut b a ng e dH e ra e e 65 ny - apof lt r h C e t spe ha sent -P a tnding ro a e arcke te E iv xpe sm e for for ta ns lle C he e ao rs in ll Me a ts lt ha h ca ts n th d ic in ra ee r e Jake Spiegel is a senior researO ch a ffering ssociatHealth e, healt h a Insu nd rance wealth, to at Retirees, the Employe1997 e Bene –2024 fit Research Institute (EBRI). Paul Projected Savings Medicare Beneficiaries Need for Health Expenses for Retirement at Age 65 in 2025 Premiums, and Out-of-Pocket Expenses for Retirement Among Medicare Percentage of Ages Private 65 and -Secto Older r Estab , 2023 lishments With Figure 3 b a ser R g ee ne gvrt ic e fic ir e gs not a e ia tm r eRe ie vs. L e a ttir lue nt ra eong d m s in t itA e iona nt -m te his in 201 ro lly mng -p c ca o ap v r1M e e e – rrc 2 . e e ost 02 d dica b 5 s, for y for Me r a e d ins ic CA a oup ta rdva e nc , le e su , W nt c ch a a itn b h D age s d e r ug ecnt onsi PE alan xpe l c da er ns re E a, b enr t le s a he , o ta se ll nd the e exp E e 90 B s e R tns I h P ’s p es a erroje cre ent c not tile ion mod inc Thrlude oug el d d h 2024 in t oes not his a st nd ud consi ayt td he er Fronstin is director of health benefits research at EBRI. Any views expressed in this report are those of the authors and For the purposes of this study, the health expenses for which savings would be accumulated are (i) premiums for Early Retirees Medicare-Eligible Retirees Expenses in Retireme Advan nt ta up ge En Aga rolleesin at Ain ge 62 5 0 in2 25 02 5 1,000 or More Employees Offering Health 3 Percent 4 age of Private-Sector Establishments Offering 5 Health c (Va ostnD s te ha rhe tMa a i,r e xim 20 not 19 um ) c . ov Ste arre ting d by in 202 Medic 5a ................................ re, such as vision o Tricarer, 1% d................................ ental services; in these ................................ cases, the savings ta ..................... rgets presente 12 d Medigap Premium Me Fi shgould d ur ic ea 1 rnot e 1 P c a ont bret s B a asc ins ra ibe tnd he d D sa to ,v tin (he ii) g s e toffic he st P im ea rs, t ratt e Brs for us detd e uc e as, or tp ible erson w , ot(he iii)r ho psponsor retm urium ned s of s for age E Me B 65 RId , in 202 iga Em pp P loy 5 la a n G end e B ,w e a ne ho nd fit e( nr iv Re olls ) sea out in a r-cof h I -M pns oc ed tk it ic e ut a t re spe e- nding Insurance to Retirees, 1997 –2024 These observations were used to determine targets for adeO qthe uart , e 1% savings to cover an individual’s health costs 50 Insu Medicrance aid, 3% to Retirees, 1997 –2024 MarchS 5, om 20 1e 0026 % C o • uple No. s 6 53 Co uld Need as Much as $469,000 in Savings here may underestimate how much retirees need to save. Conversely, if workers receiving health benefits through their Education and Research Fund (EBRI-ERF), or their staffs. Neither EBRI nor EBRI-ERF lobbies or takes positions on A for dv out antp aa gteie p nt la n inst prescr eipti ad on of d th re ugs. trad W ite iona alsl M o ee xa dic maine re p out rog -of ra- m p. oc Ak s m et spe entione nding d a for bov out e, pbaetc ie ant us e p r7 e6 sc p ripti ercon entd of rugs Mea dn icda re Low Average High three pints of blood for app92% roved procedures, Part A copayments or coinsurance for hospice care, coinsurance for a skilled Fi gure 11, Savings Needed for Medicare Part B Premiums, Medicare Part D Premiums, and Out-of-Pocket Expenses for Early Retirees Medicare Eligibles percent, 75 percent, and 90 perc Ve ete ntr an of s A the ffai rst, im 4% e. Estimates are also jointly presented for a stylized opposite-sex couple, Chance of Having employer choose to work past age 65 and postpone enrU os llm e o ent f H in Me ealth d C ic aa rr ee S , e the rvy ic e ws ill need to have saved less than the m A spe devd c aic ifi nt a ca l se p golic er e vic nr y e p olle s a rop e m osa s c ong hoose ls . Me EBd RI p icla ainv rns e it e w e ns c it rolle h no om es in Me m pr ee nt m ium on dic t, h aw is ree Figure r A e ad sea ss va um r nt ch. e a8 g te ha ptla the ns. reThi ars a e no naly prsi es d mium oes not s for Me facd tor ica in t re A he dv ta ot nt aa l ge 88% 87% nursing 60 % facility (SNF), and emergency coverage during foreign travel. 90% Retirement Among Medicare Advantage Enrollees at Age 65 in 2025 ......................................................... 14 12% 85% both of whom areE a nss ou um ghe S da v to inr ge stire simult Ma ene diaousl n Pry e s ac t ra ip gte io n 65 D . rug Expenses Throughout Retirement By Jake Spiegel and Paul Fronstin, Ph.D., Employee Benefit Research Institute 6 Projec savings target ts p ed re sent Sa edv in in this g p s a M per. edicare Beneficiaries Need for Health Percentage of Medicare Enrollees in Medicare sa enr volle ings ne es in o ede ur d t m o od cov el. erMe long dic-atreer m Ad -cva arnt e a eg xpe e is ns Low st eill s a rnd equi ot re he d rt o he paalt yh e A tv he expe r aMe gns ede ics not a81% re P c aov rt e Br e pd re H b m iy gium hMe, dso t icarha e, t nor is in d co lude es it d tin ake 88% 80% 6 Men 79% 52% 79% See VanDerhei (2006) for estimates of the impact of long-term-care expenses on the amounts needed for sufficient 77% Sugg 70 es %ted Citation: Spiegel, Jake, and Paul Fronstin, 77% “Projected Savings Medic77% are Beneficiaries Need for Health 76% Chance of Having Advantage Plans, 2007 –2034 80% our into m ac od coun el. t W the hen it fac tc om thae t s t mo a ny est indiv imatidua ing out ls r- eof tir-e p oc bekfo etr e sp be ending coming , we eligib exale m ine for Me thrd eic e a ty re p.e s of Medicare Advantage Expenses in Retirement up 83% Again in 2025 50% $90,000 $120,000 $169,000 74% The data for this study cam the from th a varie thty of sources. Data on Part B73% and D premiums, Part B and D deductibles, Early Retirees Medicare Eligibles 72% Fi rena tire lly me 5, 0% fut nt ur inc eo me leg is ala t the tiv 80% e 50 cha,nge 75 s w , and ill im 90pa p ct e rc the entil saevsings . necessary to meet health care costs in retirement. The Enough Savings Median Prescription Drug Expenses Throughout Retirement 64% E xpenses in Retirement up Again in 2025,” EBRI Issue Brief, no. 653 (Employee Benefit Research Institute, March 5, 10% 63% 63% 75% 131,000 174,000 2 69% 45,000 enrollees: those with low use of health care services, those with average use, and those with high use, throughout 12 62% 45% initial benefit limits, and catastrophic 44% thresholds came from the 2025 Medicare trustees report. Medigap Plan G Introduction 75% 61% 61% 61% 70% Men Some Couples Could Need as Much as $469,000 in Savings Inflation Reduction Act of 2022’s provision on Medicare Part D spending indicated legislators’ 65% appetite for reforming 43% 202 The 7 6st ).udy a ssumes t 90% hat all individuals and coup 160,le 00 s e 0 ither have Med 2ig 12a ,0 p0 P 0lan G to supple2 m 9e 9,nt 00 t 0raditional Medicare or 71% 59% r eA tir 202 em5 e nt re. pP ort rem foium und s for that 1 P3 a rp t eD rc 42% p ent lans of a Me nd dic out are -of e- nro poc lle ke es t s dp ide nding not ha v on e aout sup pa ptle ie me nt nta pre l sc soru ipti rce on of dcro ugs veraagre e. m Se od e eled the 41% 71% Private Insurance, 17% 70% 58% 62% 50% $38,000 $61,000 $84,000 60% 69% 61% premiums w 69% ere 69% generate40% d for new Medic 40% are 40% enrollees aged 65 in 2025. Out-of-pocket spending on outpatient 60% Me W he dic n th aree. Ot Mehe dic r arre W ec o e p m nt rog e n le rg am isla w tiv as e e pst rop abosa lishe ls, d su 60 ye c h aa s low rs ageo, ring it w the as not Med d ice asi re g ne eligi d b to ilitcy ov ae gre he and a lt h ca expa re n deing xpeMe nse ds in full icare . 44% 67% 58% enroll in a Medicare Advantage plan. We do not provide estimates specific to enrollees with supplemental coverage 66% 38% https://www.kff.org/medicare/issue-brief/a-snapshot-of-sources-of 38% -coverage-a 65% mong-medicare-beneficiaries/. same 4w 0 6% 0a %y they are 75% modeled for traditional Me 54 d,ic 0a 00 re enrollees. 88,000 121,000 37% 54% Copyright Information: This report is copyrighted by the Employee 63% Benefit Research Institute (EBRI). You 55%may copy, prescr8% iption drugs w 50% as derived from 42% the 2021 31 Me 0,0d 00 ical Expenditure1 P 4a 6ne ,00l Sur 0 vey (MEPS), 2t 0he 6,0 m 00ost recent year of data 36% By Jake Spi 41% egel and Paul Fronstin, Ph.D., Employee Benefi 53% t Research 62% Institute Today, the program continue41% s to impose cost sharing on beneficia35% ries when they use health care services. The program benefits to include dental, vision, 40% and hearing expenses, may again impact retirees’ savings targets. from Veterans Affairs, Tricare, or Medicaid. Similarly, w34% e do not provide 34% estimates specific to enrollees without any form 90% 65,000 34% 106,000 147,000 51% Medicare, 62% 8 75% 153,000 202,000 285,000 print, or download this report solely for personal and noncommercial use, provide 32% d that all hard copies retain any and 38% 32% a v Me aila dic ba le re . Part A covers inp 37% atient services, skilled nursing facility care, certain nursing home care, hospice care, and home 31% 7 inc ludes deductible Ws for omen inpatient and outpatient services. In addition, when outpatient presc ription drugs were added 50% 54% of suppleM med ent ian al c Drug 36% overa E gex .p A en ms ong es: indiv As sh idua own in ls wit Fi h M gure ed 11 iga, pin 202 Plan G 48% 5 a c ov me arn w ageould in r e ne tireed m $ e61 nt 54% , ,000 our in sa mode vings a l treatnd s the a se woman 50% 35% 90% 190,000 252,000 354,000 all copyright and other applicable notices contained therein, and 46%you may cite or quote small por 51% tions of the report health services. 50% 46,33% 000 74,000 27% 102,000 30% 27% 49% as an optional benefit in 2003, the program included a then-controversial coverage gap known as the “donut hole,” in 6% Coup 32% le 32% indiv would idua nels ed a $ nd 74c,000 ouple if e s a as ha ch ha ving d at he goa P l o lan G f ha v ping remaium 50 a p 32% s a ercn e entxpe cha ns nc ee . Thi of ha s avp ing proe anoug ch tah mone kes awa yy sa mvost ed of to tche ov er health 31% 31% 25% 46% 75% 62,000 101,000 140,000 provide 40d % that you do so verbatim and with proper citation. 42% 30% Any use beyond the scope of the foregoing requires EBRI’s References 24% 23% 9 50% 201,000 267,000 376,000 43% which beneficiaries must pay out of pocket tA o cT ove r A the cost G L of p Aresc Nripti C on E d rugs. The Patient Protection a 23% nd 42% e unc xpe See er ns t http aeint s in r sy :/ r /e w ela w tir tw e e.d m k ff teo .nt oa rg c a/ tnd ua me l use tdhe ica yre w of /me espe red a ic cv ifi ae re c ra -he a gd ea v us lt anta h ca ers of ge re -202 ser he6 a v-lt ic sh ca p eo s ove tlirgeht se r- a one 28% r-v fiic rs ’e s lif t- s. I loo ef e t kim -at ite he -. pla Tha r n ins -p t tre is ea miums , d ins wta ent a -a de nd d of -a bt e r90 y ne ing fits petr/o c . ep nt re dict 22% Out-of-Pocket, 11% 90% 76,000 39% 125,00027% 174,000 21% Savings Targets to Cover Health Insurance Premiums 26% and Out-of-Pocket Costs in prior express permis 75% sion. For permissions, ple 25 a7 se ,00c0 ontact EBRI at p 3e 39 rm ,0is 00 sions@ebri.org.4 78,000 40% 25% 37% Fr Aff onst orda in, P ble a Cul, a are A nd ct Ja of ck 20 Va 10n D (A eC rhe A) i, inc “Plude rojed c tp er dov Sa isv ions ings M to e re dd icuc are e tB he ene sific ze ia of rie this s N e cov ede fo rarg H e eg aa ltp h Expe but did ns e not s Sp elim ikeina in 202 te it.1: c wha henc n a e of Meha dic va ing re C b enoug e ou ne plfic eh sa iaryv ings, may us $106 e he ,00 alt0 w h ca ould r e ser bev ic ne ee s a dend d for thus a m inc aur n a he nd a$ lt125 h expe ,000 nses, would w hic be h is hig needehly d for de a p e w nde omnt an. 20 3% 0% 10 35% The percentage of p 90% rivate-sector establishme 3n 0t 6s offe ,000 ring retiree he 4a 0lt 5h b ,000 enefits has been fa 570,lli 00 ng. 0 As access to retiree R e Th tis ir 4% is e m a te ecnt hniq A ue m us o eng d to Tr estima adit te ional the likely M ra eng dica e of r oe utc E ome nrso fro lle m eas c omplex process by simulating the process under Some Coup 50% les Could Need as Much a 33% 8s $36 4,0000,000 in Sa 8 vings,” 135 ,E 0B 00 RI Issue Brie 20% f, no. 18754 ,009 0 (Employee Benefit R Coins epour rt Availabili ance was re ty duc : Thi ed s r to e25 por pte is rc e ant va ila aft bele r a on be the ne fic int ia erry ne re t a acthe wd w w the .eir b rd i.or edg uc tible, which w 20% as $615 in 2026 (Figure 1). 20% on whether the individual has reached the 32% ir Medicare Part A deductible, this study assumes that beneficiaries with 19% Chance of Having 31% he rand altoh b mlye ne sele fitcs b tede c co om nde iti s inc ons rae a lasi rg ngly r e numb are e, r to he f time responsibilit s. y for health care expenses in retirement will fall more on the Figure 9 contains the savings estimates for a person who turns age 65 in 2025 and who purchases both Medigap Plan G 75% 105,000 171,000 236,000 20% A couple both with median drug expenses would need $135,000 to have a 50 percent chance of having enough money The passRe agsea e ofr cth I he ns Infl tita ut tion e, Ja Re nua d29% uc ry tion A 2022 c)t. of 2022, however, addressed this coverage gap by ini 16% tiating a two-year Enough Savings Maximum Prescription Drug Expenses Throughout Retirement Medigap have the most comprehensive health insurance coverage available that is supplemental to Medicare (i.e., Plan 15% 30% 14% shoulders of today’s w 90% orkers. 27% To project how 1 2 m 5uc ,00h M 0 edicare bene2 fic 03 ia ,0 rie 00s may need to sa 28v 1e ,0 t 0o 0 have a reasonable Table of Contents 14% t 11 o sup 1p 0% lement Medicare a 26% nd Medicare Part D outpatient prescription drug benefits. As discussed above, there will be to No cov mina er he l ra alt teh e s oxpe f M re eturn n ns 25% es in r weree tair se sume ment d. to They w followould a log ne -no ed rma $171 l dis,00 trib0 t ution o ha wvith e aa 75 me p ae n ro ce f nt 1. 078 chanc and e a of sc ta ond vea rr ing d dt ehe viairtio n of transit 2% ion toward an out-of-pocket spending cap for beneficiaries. Starting in 2025, Medicare Part D out-of-pocket G) and thus pay premiums for this coverage on a regular basis, whether or not they use health care services. To 24% Chance of Having 10% chance of meeting their health care spending requirements in retirement, the Employee Benefit Research Institute unc Spieeg re ta l, int Jayk e re , la at nd ed P 50% ta o ul F seve ronst ral in, “ varia Pb rloje es, suc cted$ h a Sa 11v s he 3ings M ,000 alth ca edic ra er c eost Bes, long ne $1fic 42ia ,0 e r0 iv e 0it s N y, e ae nd d for inte H re est a $1 lt r 9 h Expe a 1t,e 00 s. A 0 ns me ong s Re pm eop aine le d w H ith igh in 22% Introduction .......................................................................................................................................................... 4 e 0.xpe 101. ns Th es a is nd prov $id 203 ed,000 a me td o iaha n no vemina a 90l a pnn erc ua ent l re cturn hanc oef 7. of 32 cov pe erc ring ent. the ir expenses. spending was capped at $2,000, and it will be subsequently adjusted each year based on the average per capita Enough Savings Maximum Prescription Drug Expenses Throughout Retirement address uncertainty related to out-of-pocket expenses incurred under Medicare Part B, we assume that all Medicare (EBRI) buil 19% t a simula 75% tion model allowing for unc 160,e 0r0t0 ainty due to mor 2t0a 3lit ,0y 0 0 and investment 2r7 e4 t,ur 00 n0s. The model reflects the Medicare2022 Part: D Som , the er C e oup is ale lss C o unc ould ertN aint eed y r ae s Muc lated h a to s $3 healt 83 h st ,000 atus in aSa nd vings,” outpa tE ie Bnt RI p Irss esc ue ripti Brie on f, d nro. ug 5us 80e ( . Employee 20% Men aggrega 0% ted expenditures for covered Part D prescription drugs. For 2026, the out-of-pocket spending cap is $2,100. 12 b Tr ee ne nds fic 0% ia in Em ries r peloy acm h th ent e- B Pa arsed t B Re ded tir uc ee tible He, aw lth P hich w rograas $ ms2 ................................ 57 in 2025. The study a ................................ lso assumes that Me ............................. dicare beneficiaries 5 See Table V.E2 in 90% https://www.cms.gov/oact/ 19 tr/ 3,20 0025 0 . 245,000 331,000 0% Inflation Re 19 d 9uc 7 1t 9ion A 98 1999c2t0’s 0 0$2 200,100 200 02c 2a 00p 3 2on 004P 20 a 0r 5t 2D 00 6out 2007 -of 20- 0p 8 oc 200k 9e 2t 0 1spe 0 201nding 1 2012 2 0 in 202 13 20145 a 2015nd 201v 6a 20r1y 7ing 2018a 2ss 01um 9 202p 0t2io 02ns 1 2 0a 2b 2 out 2023 2Me 024dicare M B1 ea 9ne 9x 7imum fit 199 8Re 19sea 99So Dru 20 ur0 rc c 0h I eg 2 : 0 EBRI e E 0ns 1x 2t 0 p it 0 sen 2 ti ut m 20 a e s 0 te , 3 es sFe 2 fro 0: 0m b 4I r th n 202 2u 0 e0a 2 5r 02 y 20 3 020 5, M 6 e 2 d 2 0 a i0 c3 7 am ). l 2 Ex 0 a 0p n w 8en 2d 0i0 tu ould 9re 20 Pa 10 nne 2 e0 l 1 Su e 1d rv 2 0 e$ 1 y2 .83 20,000 13 201 4in sa 2015 2 v0ings a 16 2017nd 2018a2 0w 19om 202a 0n w 2021ould 2022 2 ne 023e 2d 02 4 50% $60,000 $83,000 $106,000 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Women with Medigap Plan G have Medicare Part D to cover outpatient prescription drug expenses. Projections of savings needed to cover out-of-pocket expenses for prescription drugs are highly dependent on the A Ad ss vu am ntp atg ion e a s A nd round Med75% iga He pa c ltov h Expe erage ns . es in Retir 8e 3m ,0e 0nt 0 ................................ 116,000 ................................ 150,000 ................................ 9 $100,000 if each had a goal of having a 50 percent chance of having enough money saved to cover health care 50% 136,000 172,000 232,000 Source: EBRI estimates from various tables at https://datatools.ahrq.gov/meps-ic. 90% 98,000 139,000 180,000 10% Source: EBRI estimates from various tables at https://datatools.ahrq.gov/meps-ic. Sp assie um gep l, tion Jaks us e, ae nd d for Pa ul F drug ronst utili in, “ zation. Proje Ther ctede Sa arv eings M two sets edic of are re B su elt ne s in Figur ficiaries N e e 9e : dI n th for e H e fir ast lth Expe , prescns ripti es I on nc drre ug ased us eA is ga a in t Figure 1 expenses in r Soue rcteir : EBRI e em75% ent stim . aIte f st fro he my v ains riout se taa bd le sw at a hnt ttpse 1 :/8 d /d5 aa , ta 0 to 90 0o0 ls .a p he rqr.g coe vnt /me p csha -ic.nc2 e3 of 4,0ha 00ving enough sa3v1ings, 7,000$139,000 would be Modeling Technique and Data ...............................................................................................................................10 While premiums for Medigap Plan G and Medicare Part D are treated as health care expenses in retirement for the Women th EBRI’s analysis finds: the media in 202 n thr3: So oughout 90% me r Ceoup tirele ms C ento ; ul in t d N he e esecond d 2 a2 s Muc 7,00 set, p 0h as $41 rescr3,00 iption 0 2 in Sa d8 rug 8,00 v us 0 ings,” e is aE t BtRI he I90 ssue 3 p 9 B 1 e,r r0 c ie 0 ef 0 nt , no. ile, 59 alt9 (E houg m h o plout ye -of e - Medicare Part D Cost Sharing, 2024 –2026 needed for a man and $162,000 would be needed for a woman. 50% 71,000 100,000 128,000 p In th urpose e fut s of ureour , de m spit odee l, the the int m rod oduc el a tion o lso inc f th lude e ca s e p st on im Pa atrets on D out out -of -- of p-oc poc kek t espe t spe nding nding , indiv for idua the P lsa r m t a By dha edvuc e ttible o pa (ynot gr eater Conclusion ...........................................................................................................................................................14 Couple pocket spe Bending nefit Re is sea caprp ce h I d ns at t$2 itut ,000 e, Ja for nua 20 ry25 20 a 24 nd ). adjusted yearly based on projections contained within the 2025 75% 94,000 133,000 172,000 2024 2025 2026 sh cov ae re re s of 0% d by the Me ir d ov ige arpa ll he Plan G alt) h cos and tp s in r resce ripti tireon med nt rugs. becaD us atea of from the t fin he aMe ncia dic l c aond l Exit pion o enditf urte he P a Me nedl Sur icare v e pyr og (MEP ram S) a nd were used • The predicted savings target increased slightly from last year for Medicare beneficiaries enrolled in Medigap 50% 248,000 313,000 423,000 A couple with maxim 90% um drug expenses would 11 3 n,e 0e 0d 0 $181,000 to ha 16 v2 e, 0 a0 50 0 percent chanc 21 e0 of ,00ha 0 ving enough money to Me Refe dic re anc ree t 20 sr ................................ us 07tees 20 r09 eport.20 Se 11para 20 t................................ e 13 estim 20a 15 tes ar 20 e17 show20 n f ................................ 19or low 2021 , aver20 ag 23 e, and 20 ................................ 25 high M 20e 27 digap 20 p 29 remium 20 ........................... 31s. 2033 15 75% 313,000 395,000 534,000 for c ut b this ack s t pao rt e of mt phe loy m mod ene t-l. ba W sed hile r e itt ir ise c eur hreeant lth p ly pross ogrible am sfo Figure . F r or ne ins w 7 M tae nc dic e, ac re ur b re ent ne fic est ia im rie as tets p o prur oje cha ct se theMe Me dig dic ap ar ins e tr ur us atn fun ce d Plan G and remains sensitive to assumptions about premiums, drug costs, and health care use. Spiege$4 l, ,00 Ja0ke, and Paul Fronstin, “Projected Savings M Figure edicare 5 Beneficiaries Need for Health Expenses Continued 50 t% o Rise Couple cover health care expenses in retirement. They would need $227,000 to have a 75 percent chance of covering their 90% 370,000 469,000 634,000 1 Endnotes .............................................................................................................................................................15 ( to e.g be ., ins Plaolv n G e)nt t o bPercent y c om 20p 3le 3, te aly tag w ae hic void of h p d Lo oint edcal uc rte ible v G eov nue s aern nd s ar ot m ehe en prroj t ce ost Emp cte s dha t lo o ring y cers ova ess r W 89 ocith ia ptee 5,000 rd ce w nt it h M of – 9,999 perd og icraarm e W P c orkers a ost rts A s. The and B er, osion it is not of 50% 128,000 181,000 233,000 Percentage of Private-Sector Workers Separatein 202 estim4 So ates a mree Cpoup rese lent s C ed o uld for m Ne ee n a d a nd s Muc wom h a en. s $42 Bec8,00 ause0 i wn Sa omev n ha ingsv,” e E long BRIe I rss life ue e B xpe riefc,t a no. ncie 62 s t 9 (E han me mploy n, ee Source: Author simulations based on assumptions described in the text. e xpenses a Sou nd rce: $2 http67 s://w ,000 ww.kff .o to rg/m ha edv ice are a /m 90 edic ap ree -a rd cve ant nta gc e-ha enro nc llme e nof t-upd caov te-and ering -key-tre the ndsir / expenses. • A 65-year-old man enrolled in a Medigap plan with average premiums will need to have saved $120,000 to 75% Offering Health 162,00 Insur 0 $3,500 ance to Re 227tir ,00 ee 0 s, 1997 –2024 293,000 45% p em oss ploy ible m te o nt a-vboid ased the re d tir ed euc e h tible ealts a h pnd rogot ra he mrs is cost dis sh cus arsed ing a in m ssoc or iaet edde tw ait il h P below art .D outpatient prescription drugs. Thus, Employed by Establishments Offering Health w Figur omen w eB s ill e ne ge fit ne Re rally sea ne rch I ed ns lartg ite ut r esa , Ma vings th rch 202 an me 5). n to cover health insurance premiums and health care expenses in $3,500 90% 188,000 267,000 345,000 have a 50 percent chance of having enough to cover premiums and median prescription drug expenditures, under Part D, for expenses above the deductible, beneficiaries are responsible for 25 percent coinsurance on expenses Insurance to Retirees, 1997 –2024 Figure 10 L The arge sa r vfir ings e ms wst eim re a m te uc s for h mor Me ed lik icaerly e A tha dvn sm antag ae lle e r nr one olle s t es o w offe ith a r rveetriraegee he usa elt of h bhe ene altfit h ca s. A re m se ong rv ic pe riv s a atre e- sect betw or e en 42 retirement regardless of the savings targets. Also, women will need greater savings than men even when both set the Source: Author simulations based on assumptions described in the text. 40% Figure 1, Medicare Part D Cost Sharing, 2024–2026 ................................................................................................. 4 This study updates previous estimates by the Employee Benefit Research Institute (EBRI) on the savings needed to and a 65-year-old woman will need to have saved $146,000. 35% Savings Needed to Have a 90 Percent Chance of Having Enough Money for Health b Va etnD we ee rn th hei, e Ja dcekd , uc “Me tible asu arnd ingt he Re tini iretm iae l b nte ne Inc fit om lim e it A. dA end quao cnc y: eC t ahe lcula initting ial b Re ene alis fit t ic lim Inc it o is r me e aRe che pla d, ce bm ene ent fic Ra iartie es s,” arE eB in RIt he Early Retirees Medicare Eligibles sa p est em ra ce b e lis nt goa hm and l e — nt 50 fo s w rp e e itr xa h 1,000 cem nt p le low , or of er ha m tha or ving n th e wa o e ry 90 k e a rrp s ee in 202 for rce nt enr c 4olle ha , 19 nc e s e p e in t of rce ha he ntv ting offe rade it re noug iona d hl M eh mone alt eh cov dicar ye e t ro p arg c og e ov r te o ar m Me he wd a ho ic lth e ap re axpe -ye ligi an ns b ae le vs in e rre atg iree es, $3,000 M odeling Technique and Data 100% cover health insu Car ra e nc Exp e pen rem ses ium in s a Rnd etihe remen alth ca t in re 2011 expe – ns 2025 es in r foe r ta ire C m oe unt pl. e In W p ith re v D ious rug rExp eporen ts ses (Spie at ge th l a e nd Fronstin, donut hole Iss unt ue B il t rie he f,y no. rea 29 ch t 7 (E he m ca ptloy aste re op Bhic ene lim fit it Re , a sea bov rc eh I whic nsth itut the e, re Se is p tno emlong ber e 20 r 06 any ). cost sharing. When outpatient Figure 2, Source of Pay 93% ment for Incurred Health Care Expenses, Noninstitutionalized Population of Medicare a pnd rem 22 ium p efor rce Me nt offe digarp e d P la it n G to e su arp lyp rle em tire ent es (F al cigur overea g 4e ). . E Hvoew n a evm erong , high larus gee r rfir s of ms, t hea he lth ca perc re e nt ne ae gd e offe 26 pre ing rce rnt et ir low eee he r 35 sa % alv th ings retirement. • To have a 90 p90th erce nt Per cha cen ncti el e of Tm hr eo eu ting gh t2024 heir he an ad lt h ca at th re e spe Maxi nding mum ne Star eds in ting re itn ir e2025 ment, a man will need to Determining how much money an individual or couple will need in retirement to cover health insurance premiums and 2025; Spiegel and Fronstin, 2024; and Spiegel and Fronstin, 2023), we made several improvements to the prior model 29% p Cro esc nc r 3ipti 0lus % on ion drug coverage was added to Medicare in 2006, beneficiaries in the donut hole paid 100 percent 90%Beneficiaries, Ages 65 and Older, 2023 ..................................................................................................... 5 b if t ene hefit y s t choo o e se ithe a rMe eadric lya rre et ir 85% Ae de vs or anta Me ge d pic laan o re-v ee ligib r tra le d it re iona tirel M es ha eds b ic 85% areee.n Of cour declining. se, there are other factors to consider when $2,500 83% Change in have saved $212,000, and a woman will need to have saved $252,000. Couples enrolled in a Medigap plan 82% out-of $5- 0p 0,0 oc 00ket expenses is a complicated process that depends on numerous variables. The amount of money a person ( Va FrnD onst erin a hei,nd Jac Va k,nD “Re erthe ireim , 20 en22 t Sa ). vFi ings Shor rst, we m tfa od lls ifi : eE dv t ide henc meod Fr eom l to a EB cc RI ount ’s 201 for 9 Re thet ir $2 em ,00 81% ent 0 c Se apc ur on ity Me Pd roje icac re tion Part D out-of- 81% 30% coinsuranc Me ed . W ian he Drug n the E AC xA p en wass e esna : Acs sh ted, ow it n in include Figd ur a e p 9r, ov in 202 ision to p 5 a m ha ase n w in a ould 80% r ene duc ed ti on $120 in t ,000 he d in sa onutv hole ings a to nd 25 a p w eom rcea nt n The health care costs Medicare beneficiaries face in retirement can be significantM , ethod as Me ology dicare was not intende $469d ,0 0t0 o it comes to choosing a Medicare Advantage plan over tradit 78% ional M78% edicare. Medicare Advantage plans often have limited 78% 78% ® 80w % ith average premiums, meanwhile, will need to have saved $267,000 to have a 50 percent chance of covering will need will depend on the age at which he or she retires; length $2,100 of life after retirement; the availability and source of pocket spending 75% . Second, we changed the source for Medigap premiums a 75% nd started conducting sensitivity analyses Figure 3, P Mod ere ce 24% l,nt”a E gB e RI of IP ss riv ue at e B-rSe ief, ctn or o. E47 sta 5 ( blis Em hm plo ent ye s Off e Bee ne ring fit Re Hesea alth I rch I nsur nsa tit nc ut ee t, o Ma Rertcir h 2019 ees, 199 ). 7–2024 .................... 6 74% 74% As a result of the decline in the percentage of employers offering coverage, the percentage of workers at firms that w c oins ould ur ne anc ed e $ b1 y46 20 ,000 20. A if e praov chi si ha on d in t a ghe oa lI of nfla ha tion Re ving ad 50 uc tp ioen Ac rcent t of cha 20 nc 22 e of cap ha pe vd ing Me ed noug icare h mone Part Dy out sav -of ed- p to occ kov ete spe r he nding alth $450,000 $2,000 25% 25% 25% cover 2a 5% ll the health care expenses beneficiaries might face. To help make these costs more salient, EBRI has developed networks or may require approval before certain medications or services are covered, and some Medicare Advantage 23% $428,000 $2,00 the 0 ir medical expenditures in 23% retirement and $405,000 to have a 90 percent chance. 25% health insu 25% rance coverage to supplement Medicare; health status and out-of-pocket expense 67% s; the rate at which health around the level of the premium. Third, a new component of the model estimated savings nee$d 4e 13d ,0 0 t0 o cover the cost of 22% $407,000 76% a e offe xpe t $2 r ns ,000 cov es in r e rin 202 age e tha ir5 es d m and ee nt ca lin a dnd e jus d ttahe s t s w y he e fa ll. y ce eIa d n 202 r ly av out er4 a, -gof 11 e -Me pp oc edrk ig ce ea tnt p m p of arxim ew mor um ium ke s. I rbs w ased f e erit eon he em rt ot ins ploy at l p eeae d dr aw cta ae pnt st ita e a d b spe lis a hm 90 nding e pnt er s c fo e t66% r ha nt c tov c offe ha ernc erd e e d of 70% 76% 22% a projection model for estimating the savings Medicare bene$fic 399ia ,0r 0ie 0 s may need to achieve to have a reasonable 65% chance plans require a premium. However, we also have not modeled the impact on savings needed of coverage of 65% extra Figure 4, Percentage of Private-Sector Establishments With 1,000 or More Employees Offering H 64% ealth Insurance to 21% 21% $387,00020% $400,000 care costs increase; a20% nd interest rates and other rates of return on investments. In addit $3ion, 83,000public policy will also health insurance premiums and out-of-pocket spending among Medicare enrollees who choose Medicare Advantage 23% 69% health coverage to early retirees, down from 29 percent in 199 19% 7 (Figure 5). Similarly, 10 percent of workers were ha pre vsc ing ripti enoug on dh sa rugs vunde ings, r$ P 212 art ,0 D00 . For would 2026 b, et he ne e Me ded dic for are a P m aratn a D out nd - $of 252 -poc ,000 ke tw m ould axim bu em ne ise d $2 ed ,100 for. a woman. $368,000 68% of meeting their he68% alth care spending needs. benefits — Re su tirce h a es, 199 s vision, 7–202 he4 a r ................................ ing, a22% nd dental servic 19% ................................ es — in Medica $r 3e 63 ,0 A0d 0va ................................ ntage$ 3p 6la 1,0ns 00. ................................ 20% 7 • 20%Representing an e $3 xt 60r,0 e0m 0 e case, a couple with particularly high prescription drug expenditures will need to have 57% 21% 18% 18% Endno 60% tes 21% 65% $1,500 $349,000 18% affect spending on health care in retirement. While it is 64% possible to derive a single number that an individual can use to plans over the traditional Medicare program. As a result of these modifi 18% cations, past estimates are not necessarily $342,000 62%20% 62% employed at establishments that offered20% health coverage to Medicare-eligible retirees, down from 25 percent in 1997. $350,000 61% 61% 61% 17% 61% 17% saved $469,000 t 19% o have $a 32 90 6,00 0percent chance of having enough money to cover their health care costs in $325,0 16% 00 59% 19% set savings goals, a number based on average expenses will be too small for approximately one-half of the population. c A Eom nr coup ollm parle a e b nt ble ot in Me th w o eit st dh me im icaa rtee d s p A iad n d v ra ont d rug uc ag ee e dxp p sila e nc ns ns ee ha s w 20s b 23 ould .e H e n g ow nee e row v de $ rin , 2g 67 our a,000 nd upd is t a o ctlose e ha d v m e tod oa 6 e 50 0 p l indic peerrcc a ee tnt e nt s (c t Fi ha ha gur tnc sa ee v 8of ings ne ). ha The ving C eong de enoug dr teo ssc h mone iona overl y EBRI’s model incorporates changes d ue to the Inflation Reduction Act of 2022, which capped Medicare Part D out 15% -of- These statistics should not be interpreted as meaning that 10 percent of workers shou 15% ld 15% expect supplemental health Fi gure 5, P 50% ercentage of Private-Sector Workers Employed by Establishment 55% s Offering Health Insurance to Retirees, 17% 54% 17% retirement. 17% 15% 17% $300,000 16% 13% 13% $1,000 he t Bo udg a clt ov h ca ee t rOffi he re a cce lt ost h e ass s in r xpe umns e es t te irs in r e ha mte Me nt et ir r de e ic m m aa ree in a nt A . dThey w v siagnt nif aic gould e a nt enr b ne ollm ure dd ee n. nt $16% 3 The 39 will ,00 rre e0 t m aca o h 6 inde ha 4v rp e e of a rc t75 e his nt p in le Iess rcue ess nt B tc rha iha efn a nc dis e d c of us ecses a co dv ee . tr rW e ing nds e m the in t ak ire h e pocket spending at $2,000 in 2025 and adjusts yearly based on prescription drug spending. The model also includes coverage 1997 to Me –d 2ic 02 ar4e ................................ when enrolled in the ................................ program, nor should it ................................ be implied that 11 pe ................................ rcent 12% of workers should .............. expect 7 1 10 47% 12% 15% 46% See https://www.cms.gov/files/document/2025-medicare-trustees-report.pdf. Predicting changes to the generosity o 11% f Thus, this analysis uses a Monte Carlo simulation model that treats health insurance premiums and out-of-pocket 40% 14% 11% 10% 44% Early Retirees Medicare-Eligible Retirees 44% a seve vaila ra bl a ilitss y um of e pm tions ploy rm eg ent ar- db ing ased pr e rm etium irees a hend alth b oute -ne of-fit poc s, kte he t spe mod nding el th a atm w ong e us 14% Me e td o icg ae rne e A ra dtvea nt the ag sa e v pings ta lan enrrolle gete s, s. First, expenses and $405,000 to have a$615 90 percent chance of covering their expenses. sensitivity analyses surround $590 ing updated assumptions about Medigap plans, as well as savings targets for 42% people to receive health coverage if they retire before age 65. Many of these workers will 13% not be eligible for retiree health • $ 250,0A 00 lthough there is significant individual-level variation, enrollees in Medicare Advantage plans generally have $545 Medicare benefits is outside the scope of this paper. health care expenses in retirement as known values but deals with the uncertainty of how long the individual or couple 10% w c Fiha e g ur nge ass e um 6, P s t $500 o ee ttrhe ha ce t nt m Me a od gd e eic l, of atrhe St e a A a td e dv d a G it nt ov ion o aegre nm f M enr ee nt olle d ic Ea m ers a p e loy A re de va ras Offe ll e nta nr golle er, ing ad nd in ze He the altr h I o fin -p ns drings. eur ma ium nc e ptla o ns Re . tThi irees a s, 199 ssum 7p –t 202 ion is 4 ..................... based on the 8 11% 36% enrolled in Medicare Advantage plans, which are an increasingly popular choice among Me 11% dicare beneficiaries. c overage for several reasons. They may be part-time workers; they may not have had enoug 11% h years of service to 30low % er savings targets. A man enrolled in Medicare Advantage who has median drug expenditures and an 5% 10% w ill su $20 r0 v,0 iv 0e 0 and what rate of return they will achieve on their savings in retirement by simulating 100,000 observations 2 Maximum Drug Expenses: In 2025, a man would need $142,000 in savings and 9a woman would need 9% fa Be ct cta ha uste 7 s6a mp perle ce snt ize of s fo Me r loc dicaal rg eo A ve drnme vanta nt ge e mp enrloy olle ers es te we ndr e to i n a be muc zeroh -p srma em llium er tha pla n n fo in r p20 riv2 a5 te .- sMe ecto dic r a emp re A loy dv ea rs nt , a the gere is qualify for av tehe ra gbee ne usa fit g; eor of nhe ew a lt hir h ca es m re a ser y not vice b s w e e ill ligib nee led ft or o ha cov ve er sa agv ee . d $61,000 to have a 50 percent chance of meeting 8% Figure 7, Percentage of Local Government Employers With 5,000–9,999 Workers Offering Health Ins8% urance to Retirees, for each source of supplemental coverage. In some of the simulated outcomes, the individual or couple will only survive $172,00 200 if e % ach had a goal of having a 50 percent chance of having enough money saved to cover health care The results from EBRI’s projection model indicate that health care costs incurred by Medicare beneficiaries are high. more variation from year to year in the local government estimates. enrolle5% es often make a tradeoff between premiums and out-of-pocket spending: Lower premium plans a 7% re usually $0 0% $150,000 his health care spending requirements in retirement, and he would need $106,000 to have a 90 percent 1997–2024 .............................................................................................................................................. 8 a few years and thus will De only duc tiha bleve a relatively small a Max gg imrum eg o aut teo f p va olue cket for health expenses Co in r insue ratnc ire ement. In other cases, Tr expe ends nses in r in eE tirm em ploy ent. Im f ee ithe nt r- ins Bas teae d d Retir wanted ae 90 e p H ere calt ent h Pr chanco e gr of am having s enough savings, $245,000 would be Among Medigap enrollees, the projected savings targets are sensitive to assumptions about prescription drug a The ssoc Aia HtRQ ed d wa itth hig a show he ra out sim -of ila-rp t oc reknedt a spe mong nding st, at thoug e andh in loca som l gov e e cranm ses, ent e nr em olle ploy es c erhoose s. Am ong limit st ed a tne e e tw mor ploy ks in o ers, a rdft ee r rt o an 3 10c %hance. Meanwhile, a woman will need to have saved $74,000 to have a 50 percent chance and $125,000 to Medicare Part B covers outpatient medical services as well as preventive services, lab tests, x-rays, and durable medical they $m 10a 0,0 y0 0 live far longer than the life expectancy for an individual or couple at age 65 and generate a correspondingly needed for a man and $288,000 would be needed for a woman. Fi expe gurndit e 8, P ure es a rcend nta Me ge d of iga M pe d pirceam re ium Enr s. A olle m eong s in M Me ed dic ica ar re e A Ad dv va ant nta ag ge e P elnr ans olle , 20 es, t 07he –20 p3 roje 4 ................................ cted savings targets a .............. re sensitiv 10 e One of the reasons we focus on how much individuals need to save for health care expenses in retirement is because inc driv re ea p se rem in t iuhe ms low late e 19 r. 90 To s, t de he riv p ee a rc reant ng ae g eof offe poss ring ible r eout tire-e of he -pa oc ltk h b et e spe nefit nding s ha s b ame ount en fa s llfor ing Me (Fid gic ur ae re 6 A ). dv The anta dg ee c lin enr e o in lle te he s, 0% equipment. ha ve a 90 percent chance of having enough to cover her health care costs in retirement. Couples will need to larger agg1 r9 e 9g 7a 1t 9e 98 v 19 a 9lue 9 20. 00 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0% fe to w ae ss r um and ptfe iow ns e ra b em out ploy pre er sc s a ripti re on offe dr ring ug crost etirse, et he he a elt nr h b olle en ee ’s us fits. The age of Ag he enc alty h ca forr H e e ser altv hc ica erse , a Rnd esea prroje ch a ctnd ions Qua of lit he ya lth p we er c us ent ed a g the e of a v loc era ag l g e ov ine -ne rnm tweor ntk em mapxim loyum ers offe out-rof ing -poc retkir ee t elim he ita . ltLh b owe us neefit rs of s sta he rte ad lt h ca morree rw ec ee re nt a lyss . For ume e dxa to mha ple v,e in 201 reache 1, d $50,000 hav 1e 99 7sa 19v 9e 8d 19 9$ 91 23 005 0,000 2001 2 0t0 o 2 ha 2003 ve 20 0a 4 250 005 p 20 e 0r 6c2e 0nt 07 2c 0ha 08 2nc 009e2 0a 1nd 0 201 $ 1203 2012,000 2013 2 t 0o 14ha 201v 5e 20 1 a 6 90 201 7p 2e 01r8c2 e 0nt 19 2c 0ha 20 2nc 021 e2 of 022c 2ov 023e 2r 0ing 24 their Figure 9, Savings Needed for Medigap Premiums, Medicare Part B Premiums and Deductibles, Medicare Part D Overall, as of 2023, Medicare covered 62 percent of the cost of health care services for Medicare beneficiaries ages 65 A 4 couple with maximum drug expenses would need $313,000 to have a 50 percent chance of having enough money to Medicare Part D covers outpatient prescription drugs. care cost inflation. In general, savings targets tend to be lower for Medicare Advantage enrollees relative to Medigap ( AHRQ) reported that in 2024, only 4 percent of private-sector establishments offered health benefits to Medicare- 85 25 p pe er rc ce ent nt of of t loc hea out l gov -of e- rp nm oce knt et e lim mp itloy . Me erd s w ium it h 5,000 users of –9,9 hea 99 lth ca worrk ee w rs offe ere ar ss ed um he ea dlt th cov o have er a re ga ec the o e da 50 rly p re et rir ce ent es (F of igur the e he Praeltm h ca ium rs, a e exp nd endit Out- ur ofe-s in r Pocke ett ir D erm ug ent Expe . Otns heers for fact or Re s ta irls eo me ant ffe c att tA he ge c 65 ho ic in 202 e betw 5 ................................ een Medicare Advanta......... ge and 12 c a Bov nd ece aold rus he e e a rt, he ltw h ca hil age r g e rout eegxpe a -of te- ns p va oc elue s i ke n r tof spe esa tirnding e vings for ment a . cThey w c he ount alte h e ould d for xpe ne 1 ns 1e e d ps in r e$r3 ce 95, nt et00 ir of e0 t m inc eo nt ur ha rw e vould d e caost 75 bs, a e psp end re cnt ep nt rg iv rca a ha d te u nc a ins lly e ur of ov ace nc ov r e teim rcing ov e e in trhe edi r1 7 $0Source: EBRI estimates from various tables at https://datatools.ahrq.gov/meps-ic. 2 Source: Various tables at https://datatools.ahrq.gov/meps-ic. e 5 eligib nrolle lee rs, b etirut ee s the , drow e an fr re tom rad only eoffs 1 for 1 p reertcir ee nt e s t in 199 o consi 7 (F de igrur . For e 3 )e. xa Fu m rtphe le,r m enr orolle e, aebs g out e ne 4 p ra elly rc etnt ra d of e low prive art e p-rsect emium or s for 7). By 2024, it was down to 65 percent. out-of-pocket limit. And high users of health care were assumed to have reached 75 percent of the limit. Medigap Plan 20 G 1 1cove 2rs 01 2the M 20e 13dicare 20 1P 4art A 20 1 d 5educ 2tib 016le, P2a 0rt 17 B exc 201e 8ss cha 201rg 9 es, 2P 02a 0rt B 2c0o 2in 1 sura 20nc 22e fo2r 02 p 3reve2ntiv 024 e ca 2re 025, Part A traditional Medicare. Medicare Advantage plans often have limited networks or may require approval before retirement, the proceeds available at age 65 could be invested until such time that each annual expenditure takes p expe erce ns nte ( s a Fig nd ure $ 4 269, ). 000 to have a 90 percent chance of covering their expenses (Figure 10). highe establis r out hm-eof nt -s offe pockerte spe d he nding alth b , e ane nd fit som s to e eMe arly dic ra erte ir e Aeds in vant 202 age 4 , pd laow ns n fr havom e n 1 ar 0r ow perecre ne nt tin 199 works.7. hospital and co So ins urcura e: Au nc thoe r sc im ouslt as tio fo ns r baa sn ed e onxtra assu m ye ptia or nsa dfte escr ribOri ed in g tin hea te l xMe t. dicare benefits run out, Part B coinsurance and copayments, certain medications or services are covered. place. The simulation model in this analysis assumes rates of return with a median nominal value of 7.32 percent e e e e e e e e e e e e e e eb b b b b b b b b b b b b b br r r r r r r r r r r r r r ri. i. i. i. i. i. i. i. i. i. i. i. i. i. i.o o o o o o o o o o o o o o or r r r r r r r r r r r r r rg g g g g g g g g g g g g g g IIIIIIIIIIIIIIIs s s s s s s s s s s s s s ss s s s s s s s s s s s s s su u u u u u u u u u u u u u ue e e e e e e e e e e e e e e B B B B B B B B B B B B B B Br r r r r r r r r r r r r r rief ief ief ief ief ief ief ief ief ief ief ief ief ief ief A r• • • • • • • • • • • • • • • eMar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar searc c c c c c c c c c c c c c c ch h h h h h h h h h h h h h h h 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 r,,,,,,,,,,,,,,,e p 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0r 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2t6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 f r• • • • • • • • • • • • • • •o N N N N N N N N N N N N N N N mo o o o o o o o o o o o o o o t...............h 653 653 653 653 653 653 653 653 653 653 653 653 653 653 653 e EB RI Ed ucation and R esearch Fund © 2026 Employee Benefit Research Institute 11 13 14 15 10 12 16 4 7 8 3 2 6 9 5