Fidelity Says Baby Boomers Haven't Even Saved Enough To Cover Their Healthcare In Retirement

Tyler Durden's picture

While statistics are somewhat sketchy on the topic, most research suggests that the average retirement-age household has managed to set aside roughly $200,000-$250,000 for their golden years.  Unfortunately, they'll need more than that just to cover their healthcare costs.  Per Bloomberg notes today, the average 65-year-old couple will need roughly $275,000 to cover their healthcare costs during retirement...and that's with Medicare.

A 65-year-old couple retiring this year will need $275,000 to cover health-care costs throughout retirement, Fidelity Investments said in its annual cost estimate, out this morning. That stunning number is about 6 percent higher than it was last year. Costs would be about half that amount for a single person, though women would pay a bit more than men since they live longer.


You might think that number looks high. At 65, you’re eligible for Medicare, after all. But monthly Medicare premiums for Part B (which covers doctor’s visits, surgeries, and more) and Part D (drug coverage) make up 35 percent of Fidelity’s estimate. The other 65 percent is the cost-sharing, in and out of Medicare, in co-payments and deductibles, as well as out-of-pocket payments for prescription drugs.


And that doesn’t include dental care—or nursing-home and long-term care costs.


Of course, the problem remains the staggering inflation of healthcare costs that continue to rise at many multiples of overall inflation and wage growth. 

U.S. retiree health-care costs are likely to increase at an average annual rate of 5.5 percent over the next decade. That's nearly triple the 1.9 percent average annual inflation rate in the U.S. from 2012 to 2016 and more than double the projected cost-of-living adjustment (COLA) on Social Security benefits.


The premiums on supplemental insurance, also known as Medigap, that many people buy to cover costs that Medicare doesn't, such as co-payments; on Medicare Part B, which covers payments for doctors, tests, and other medical services; and on Part D, prescription drug coverage. Here's how your Social Security benefits are likely to stack up against some of those costs.


Meanwhile, the shocking inflation of healthcare costs spells disaster for younger families who will have to set aside millions to cover their healthcare in retirement.


Of course, excessively rising costs, for our legislators who may not be so good with the math, is usually the result of demand outstripping supply and/or perverse regulations that serve to distort free market forces.  In the case of Obamacare, we have both. 

As an example, before Obamacare many healthy young people, who we'll refer to collectively as John Doe, chose not to even carry health insurance because it was a truly wasteful expense for them.  As it turns out, millennials can actually do some basic math and figured out that they didn't need to spend $5,000 a year for an insurance plan when the odds are that they'll get a cold one time, pay $150 to visit a doctor and $40 to buy some antibiotics.

But then Obamacare came along and forced John Doe to, not only purchase insurance, but to purchase a 'souped up,' expensive plan with all sorts of bells and whistles. 

Now, Democrats knew that that 'souped up' healthcare plan was really just a thinly veiled tax on John Doe...he wasn't supposed to actually use it. 

But John Doe, didn't see it that way.  From his perspective, if he's paying for a service, he might as well use it...and hence the demand issue.

Moreover, that simple example says nothing about the adverse selection bias created by Obama's subsidies and exchanges where people with absolutely no "skin in the game" can get 'free healthcare,' courtesy of the millionaire, billionaire, private jet owners in the country, and consume as much healthcare as they want basically free of charge. 

To make a long story longer, the net effect of Obamacare was that it added a ton of demand to an already undersupplied healthcare market which is why healthcare premiums are soaring.  Perhaps, just maybe, basic economic principles actually work and more 'skin in the game,' rather than less, and more people making their own decisions, rather than less, are actually good things?  Just a hunch but we hear that a lot of work has been done on the topic.

Of course, we highly doubt that any of this will stop our politicians from turning the healthcare debate into a fued between young and old and the rich and poor...afterall sowing division is how elections are won...and lost.

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casapi's picture

they can thank their goverment

Honey-Badger's picture

Yup 40 years of bullshit CPI numbers erroded large portions of retirement funds purchasing power.

toady's picture

Duh. Healthcare prices are skyrocketing! That's what you get with healthcare for profit in a corporate/fascist system!

HelluvaEngineer's picture

I was going to say...self-paid health care for those nearing the end of their lives?  What's the premium in today's dollars?  About $5-10k a month?

Oh, Medicare will be around forever...right.

Blue Balls's picture

No shit Sherock.  Every fucking thing has been shoveling money to Zion Master.

stacking12321's picture

i wonder if fidelity might not have some hidden motive for saying that - like getting people to put more of their "money" in the casino (aka stock market)

The Cooler King's picture

Obama gonna pay for my gas(trointestinal surgery), & my mort(ician).


~Peggy Joseph

Antifaschistische's picture

Everytime I turn around some old fart is getting a hip replacement, knee replacements, double hip replacement, and a host of other "very expensive things" that people did not used to get.   How does one plan for all these $100k plus vacations at the hospital?

The_Juggernaut's picture

What's the big deal?  Just get Obamacare.

Bes's picture

maybe if people fucking cut down on:


-"pain managment" read addiction

-trying to pop pills for stress/depression, read addiction

-outright addiction

and actually try to focus on actually living healthier fucking lives (emotionally, physically, and socially)

then maybe, just maybe costs would be a lot fucking lower

just a thought


Handful of Dust's picture

Your making me nervous; where's my xnanx?

Pool Shark's picture

Pool Shark's 'Fool-Proof Retirement Program'® in 5 Easy Steps:

1) Renounce US citizenship

2) Move to Mexico

3) Re-enter the US as an "Undocumented Immigrant"

4) Demand free stuff

5) Profit!!!


fockewulf190's picture

Math is eventually going to wrench control away from the system overlords and force draconian measures on all aspects of life that are currently being taken for granted. Alzheimer's and dementia ALONE is going to bankrupt healthcare systems within much of the western world within 10-15 years max. When you start seeing one state/country after the next liberalize euthanasia laws (just to save on end of life expenses), you know the system is itself on it's deathbed.

"Hundreds of trillions in unfunded liabilities". How often have you heard or read this. Combine that with the ever increasing national debt, the fiat currency debasement, and the quadrillion plus amount of outstanding derivatives, and you have the formula for the upcoming Dark Ages Part II.

Anybody with half a brain must know this is not going to work. It's just all so the powers that be know a 5 Kilometer asteroid is on the way, or some other extinction level event, and they just figured "Fuck it...we'll just keep this bitch going with the printing presses till it hits". Seriously, what else could explain such suicidal group think amongst the government and economic leaders of the world?

pliny the longer's picture

no worries retirees, ur kids got 5 on it.  'cept they b payin on student loans for themselves and their kids, u know, since ur happiness was far far more important than helping your offspring.  

suck it, boomers.  how bitter is that lemon?  

JRobby's picture

This is all by design. And many of them are very, very sick from a lifetime of eating shit, not exercising and partying.

They will be rounded up and put in ovens, gassed and acid bathed.

two hoots's picture

How much must one save to avoid death?    or maybe "Medical profession not satisfied with potential income, blames boomers for lack of savings"

waspwench's picture

Expensive as these items are, it is still much, much cheaper to have a mobile person able to care for themselves, than it is to have an incapacitated invalid who needs help with everyday living.

Anything which keeps people independent saves the government a small fortune.

DWD-MOVIE's picture

I’m making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do…

BetterRalph's picture

Those costs your quoting are garbage.
Visit the Oklahoma Surgery Center.


who needs insurance? I don't.
I can pay for my next heart attack out of pocket!

Of course I won't have one now, since I changed my ways, which is the secret SECOND part of Health Care. You got to fix your nutrition and take care of your body if your responsible for yourself.

The whole way the hospitals are is wrong.

gouyou's picture

Agree on the skyrocketing, but I disagree on the corporate/fascist part. A mix of wellfare, cronyism and paternalism is at cause. Healthcare is the most regulated marketplace in the country :(

BlindMonkey's picture

"A mix of wellfare, cronyism and paternalism is at cause."


I don't know about you, but it sounds like you are describing corporatism/fascism to me.

toady's picture

Yeah, semantics....  basically, the government is guaranteeing healthcare profits.... actually, not healthcare profits, but health insurance profits... industry + government = fascism.

Handful of Dust's picture

Also, I read the average loan a med school grad carries is $128,000.


So he has to charge to pay that back.

Shadow1275's picture

So who wants who to pay for who again?


Or should I say this time?


Honestly I feel bad for the boomers, they were barely born before they were forced to pay for their parents, I.E. Social Insecurity, who had only been paying into the system for about 20-30 years of their lives. The parents of the greatest generation didn't pay into it at all. They simply just collected.


Pay in my ass, it's wealth distribution. I don't hate BBs, they have a lot more class than millennials and the like. But when the system collapses and they're demanding their SS and Medicare, do they really think they're going to convince some Dindu, Muslim, or a non-cucked White Man to pay that stuff when we're all trying to survive in the hellhole that is SOcialist Collapse?


Nature has little mercy for the weak. and that mercy is in the form of death unfortunately

Peak Finance's picture

LOLZ feel sorry for boomers. They robbed you and played you and are dying out leaving you with a destroyed world. 

I hate boomers so much we should make the surviving ones fight it out in Thunderdome for dog treats when this shit finally collapses. 

THEY got it coming. 

The Cooler King's picture



What's all this hubbub about HEALTHCARE payment system that I'm not a part of?


More IMPORTANTLY! Why are you bothering me with this nonsense during one of my 20 taxpayer funded VACATIONS this year?!?!

YourAverageJoe's picture

You'll feel better when they start building the special bathrooms guys like you require.

Peak Finance's picture

"You'll feel better when they start building the special bathrooms guys like you require." 

Says YourAverageJoe Nervously,

wondering if Peak Finance would REALLY throw him into the Thunderdome  

man from glad's picture

I can't vouch for anybody else, but I will bring some serious hurt to any millennial or whatever gen'er I get stuck in the Thunderdome with.

Peak Finance's picture

The plan is Boomer on Boomer violence in Thunderdome for Dog Treats. 

This idea could be refined further. 

YourAverageJoe's picture

 You've shown that you can fling shit as well as any caged monkey there snowflake.


Chief Wonder Bread's picture

You just hate yourself. The whole generational thing is a con. It got jump-started with Strauss & Howe. They monetized it with their books and then ongoing with their LifeCourse Associates (google it). People never thought seriously about generational conflict until then except in a light-hearted way (Shakespeare). It's a form of identity politics, a divide and conquer strategy. It created bewilderment within the psyche of the broad American middle-class - at least those inclined to speculative moon-gazing - which was the purpose all along for the leftists in academia. Slice and dice identity among the white majority, this time according to generations and another crack is exploited within society. Libertarians hip-hoorayed over the monetization of the idea -- another "triumph" LOL. You are just another dupe for the con and the jews love you.

Peak Finance's picture

Do you like Liver Snaps or Beggin Strips? 

yogibear's picture

Lol they screw the gen Xers and millennials more with student loans. They'll have even less.

JimJinNJ's picture

you are nuts.  they really let u out of the house?  i'm going to enjoy my next SS check especially kwanowing you are paying  i'd say drop dead but i want you alive to pay me.

JimJinNJ's picture

you are nuts.  they really let u out of the house?  i'm going to enjoy my next SS check especially kwanowing you are paying  i'd say drop dead but i want you alive to pay me.

HelluvaEngineer's picture

I will admit, almost every one of them I know voted for McCain and wants to "nuke Iran".  They also want their AARP discount and free shit.  Sorry, I don't have a lot of sympathy.

BlindMonkey's picture

Thank God food is going to be cheaper now that Amazon bought Whole Foods.  




Handful of Dust's picture

CNN says Trump supporters are being mean to McCain about his brain cancer.

They forgot to mention how the millions of family memeber felt about him killing their relatives.

Kidbuck's picture

I see it every day and it hurts.

swamp's picture

Just go to emergency and don't pay like the illegals.

Vullsain's picture

Yep, decades of Central Bank interest rate strategy designed to move forward consumption to help bail out the financial collapse orchestrated by the Masters of the Universe. Fucking Brilliant.

BabaLooey's picture


I thought..................SoeteroCare would fix alllllllll of this?!!!!!!!!!!!!!!!!!!???????????????



Raffie's picture

why am I not shocked.

I'm sure they will protest this.

ET's picture

The unhealthy and gluttonous American lifestyle leading to a massive obesity epidemic will destroy whatever social fabric is left of this country. Anger will flare when the healthcare costs are paid for by those who heeded all the free and sound healthcare advice while others sat and ate and sat and ate to oblivion.

If your body mass index is over 27, shame on you.

JoeJitsu's picture

So the boomers die off quicker? I'm not seeing the downside.

Nostradumbass's picture

One day you just may miss the boomers - at least some of them. Why? Because some of them who have planned a retirement and now have the time to, can address many of the problems facing all of us. It is only when people are not bowed down under the yoke of endless labor that they can respond to the troubles coming to them from (((those))) who are trying to enslave all of us.

I for one, am dedicating my final decades to doing what I can to throw a wrench into the evil machinery designed to give this world over to this evil empire. In any way I can I will strive to inform anyone who will listen...

Do you think there are any other generations coming along who will ever be able to have the time and motivation to do this?

VZ58's picture

Hilarious. Yeah like that will ever happen with the most narcissistic generation ever! They are out blowing their kids' inheritance and kicking the debt can down the road to their grandkids. And then they will suck the last remaining finds out of Medicare. What a sweet generation they are. Singularly responsible for raising morons and destroying this country over the last forty years.