A. Possibly. While most people probably have seen the annual Fidelity study that predicts individual retirees may need as much as $133,000 to $147,000 to cover health care costs in retirement, a recent EBRI study finds that after Medicare premiums, actual retirees are self-reporting the median spending on health care services is actually “just” $27,000, which averages out to barely more than $1,000/year or $100/month of out-of-pocket expenses over 25+ years of retirement, while total spending on all out-of-pocket medical expenses after Medicare premiums was under $2,000/year.
In other words, beyond the ongoing cost of Medicare premiums themselves, the range of medical expenses in retirement may actually be much narrower, and much less uncertain, than is commonly suggested.
Of course, there is still the challenge that medical expenses have, for decades, been inflating at a higher pace than the general level of inflation, and the cost of long-term care expenses in particular still remain a substantial wild card. Nonetheless, the EBRI survey shows that even those who die at age 95 or later and experience the most expensive (95th percentile) of costs, cumulative medical expenses are “just” $269,000 (effectively producing a range of medical expenses in retirement from $27,000 to $269,000). Which suggests in the end that the bulk of medical expenses may actually be more “plannable” and stable than commonly conveyed, and the real issue is how to plan for (or insure) long-term care expenses or the risk of a serious terminal illness that could rack up substantial medical bills in retirement.