At a Glance | June 18, 2020 Projected Savings Needed for Health Expenses Decreased in 2020. We Explain Why. RETIREMENT SUCCESS TARGETS Savings Targets to Cover Premiums and Prescription Drug Expenses in Retirement By Median and 90 Percent Success Rate and Level of Prescription Drug Needs at Age 65 The predicted saving targets for Medicare beneficiaries Men’s Savings Targets at Age 65 Couple (M/F) Savings Targets at Age 65 to cover health premiums, Range: From Median to High Drug Expense deductibles, and certain other Drug Chance of Having Expense Chance of Having health expenses in retirement Sufficient Savings Level: Sufficient Savings have fallen between 8 and High $175k Drug Median $144k 90% $157k 10 percent since 2019. These Expense Level: $130k are the biggest declines we High $363k have seen since 2013. $103k $94k 50% $79k $73k $325k 90% Median $301k $270k 2019 2020 $234k Women’s Savings Targets at Age 65 $212k 50% $194k $183k $163k 90% $178k $168k $146k $131k 50% $118k $104k $95k 2019 2020 2019 2020 REASONS FOR DECREASE Changes to the Medicare Trustees Cost Projections The Medicare Trustees make 2019 2020 Change an adjustment each year to re-establish the baseline Medicare Part D $51/mo $45/mo –13% for out-of-pocket spending Premium associated with prescription drug use. In 2020, they Medicare reduced projected costs for Part D $670 $615 –8% Medicare Part D premiums Deductible and out-of-pocket expenses. Note: EBRI made a one-time change to our model. Because Medigap Plan F is no longer available to new beneficiaries, we now use Medigap Plan G premiums. Premiums for Plan G in 2020 were about 25 percent lower than Plan F premiums in 2019. This change also reduces savings targets. SOURCE: Paul Fronstin and Jack VanDerhei, “A Bit of Good News During the Pandemic: Savings Medicare Beneficiaries Need for Health Expenses Decrease in 2020,” EBRI Issue Brief, no. 506 (Employee Benefit Research Institute, May 28, 2020). © 2020 EBRI This report is copyrighted by the Employee Benefit Research Institute (EBRI). You may copy, print, or download this report solely for personal and noncommercial use, provided that all hard copies retain any and all copyright and other applicable notices contained therein, and you may cite or quote small portions of the report provided that you do so verbatim and with proper citation. Any use beyond the scope of the foregoing requires EBRI’s prior express permission. For permissions, please contact EBRI at permissions@ebri.org.