th th spending at the 75 and 90 percentiles throughout retirement. Some of the reduction is due to a change For Immediate Release in EBRI’s model from using data from Medigap Plan F to Plan G. Contact: “Americans should consider that even with this decline, the amount needed to supplement Medicare is still significant, and that they will likely need more savings than cited in this report,” said Paul Fronstin, Betsy Jaffe Ph.D., Director of the Health Research and Education Program at EBRI and co-author of the study. “In Director, Marketing and Public Relations addition to the costs cited here, there are the potential costs associated with long-term care and other Employee Benefit Research Institute health expenses not covered by Medicare. Also, many individuals retire before becoming eligible for press-media@ebri.org Medicare. Of course, other workers will need less savings if they choose to work past age 65, or 202.775.6347 postpone enrollment in Medicare.” The data used in EBRI’s analysis come from a variety of sources. EBRI employed a Monte Carlo Savings Needed for Medicare Beneficiaries’ Health Expenses Declines simulation model for this evaluation that simulated 100,000 observations, allowing for the uncertainty related to individual mortality and rates of return on assets in retirement. New EBRI Study Finds that the Savings a Retired Couple Might Need for Medical Expenses Dips 8 to 10 Percent — However, Necessary Savings Are Still Significant at $325,000 This annual EBRI report focuses on future retirement income security, as policymakers address financial issues in the Medicare program with solutions that may shift more responsibility for health care costs to Washington, D.C. – May 28, 2020 – A study conducted by the Employee Benefit Research Institute Medicare beneficiaries. (EBRI) finds an eight percent decline in the amount of savings that a 65-year-old man needs and a nine percent decline in the amount that a 65-year-old woman needs in order to have a 50/50 chance of A copy of the Issue Brief, “A Bit of Good News During the Pandemic: Savings Medicare Beneficiaries sufficiently covering medical premiums and median prescription drug expenses in retirement. The Need for Health Expenses Decreases in 2020” can be found at www.ebri.org. th decline is even greater at the 90 percentile: in 2020, both men and women need 10 percent less than in 2019. These are the biggest declines EBRI has seen since 2013, when needed savings declined About EBRI between 6 and 11 percent. The Employee Benefit Research Institute is a private, nonpartisan, nonprofit research institute based in Still, the amount of savings needed for these expenses are significant: for a 90 percent chance of having Washington, DC, that focuses on health, savings, retirement, and financial security issues. EBRI does not enough savings, the man needs $130,000 and the woman needs $146,000. For a 50 percent chance of lobby and does not take policy positions. The work of EBRI is made possible by funding from its covering these expenses, a man would need $73,000 and a woman would need $120,000. members and sponsors, who include a broad range of public, private, for-profit and nonprofit organizations. For more information visit www.ebri.org th th Further, at the 50 percentile and 90 percentile, a couple would need $168,000 and $270,000 th th respectively. This represents an 8 percent and a 10 percent decline at the 50 and 90 percentiles respectively. The report, “A Bit of Good News During the Pandemic: Savings Medicare Beneficiaries Need for Health Expenses Decreases in 2020” examines the savings needed to pay for premiums for Medicare Parts B and D and Medigap Plan G, as well as out-of-pocket spending for outpatient prescription drugs. Medicare generally covers only about two-thirds of the cost of health care services for Medicare beneficiaries ages 65 and older. The main reason for the decrease in needed savings from 2019 to 2020 is related to the adjustment made each year to re-establish the baseline for out-of-pocket spending associated with prescription drug use. The Medicare Trustees reduced projected costs for Medicare Part D premiums and out-of- pocket expenses. Projecting these and other changes in Medicare Part D out-of-pocket spending over the course of one’s lifetime results in a significant reduction in savings targets for Medicare beneficiaries who would benefit from such changes the most — Medicare beneficiaries with prescription drug