The Advisor - May 2010

IMPORTANT NEWS FOR YOUR FINANCIAL AND PERSONAL FUTURE

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Health Care Costs Are a Major Retirement Expense

You may need to pay premiums for health care insurance coverage before you become eligible for Medicare. Once you become eligible, Medicare premiums (which pay for some of the cost of doctor visits) typically range from $96.40 to $110.50 a month for most people; higher for upper-income individuals.* Plus there are the costs of Medicare supplement plans, prescription drug plans and uncovered expenses.

According to the Employee Benefit Research Institute, a man retiring at age 65 with unsubsidized retiree health benefits may need $217,000 in savings to have a 90% chance of having enough to cover health costs during retirement. A woman retiring at age 65 with unsubsidized retiree health benefits may need $266,000.** These are just estimates and will depend on an individual’s health and longevity.

These estimates do not include the cost of long-term care, should you need it.

* Medicare Part B premiums for 2010.

** Source: Employee Benefit Research Institute, June 2009, Vol. 30, No. 6, www.ebri.org. Savings needed for employment-based health premiums, Medicare Part B premiums and out-of-pocket costs during retirement.