More than half of older workers doubt they can afford health care after retirement

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More than half of working Americans over age 50 fear they won’t have enough money for health care when they reach the age they want to retire, according to AARP.

A new survey from AARP says 55 percent of those over 50 don’t believe they will be able to pay for health care beyond that paid by Medicare, which covers only about half health costs for retirees. Another 38 percent of those surveyed say they haven’t saved anything for such expenses even though multiple studies show that these costs often reach more than $200,000for a retired couple. AARP also found that among workers over age 50, most (57 percent) say they plan to work past the age of 65.

Although AARP found that 68 percent believe they should begin saving at age 35 or younger, just 28 percent began saving at that age. AARP's recently launched free onlineHealth Care Costs Calculator, a major addition to itsReady for Retirementsuite of planning tools, could help families and individuals of all ages plan for health savings. The calculator is available to all for free

"Our survey shows that Americans haven't planned enough for health expenses in retirement," said Debbie Banda, AARP vice president for financial security. "Even though these costs can have a significant impact on retirement savings, families and individuals often struggle to save what they need because they are paying other necessary expenses or helping to support other family members or loved ones. We hope that we can help people of all ages get a better handle on these expenses with AARP's free Health Care Costs Calculator."

The Health Care Costs Calculator estimates health costs in retirement by utilizing a database that includes$136 billionin costs from actual health care claims. Users can select from 82 medical conditions to estimate how much they may need to spend on out-of-pocket health care costs. The calculator also assumes that individuals will be eligible for and select Medicare Parts A, B and D.

After estimating costs with the calculator, users can create a plan to help save for health care in retirement and make lifestyle changes that could help reduce their out of pocket costs. For example, if a person chooses "get to a healthier weight" as a goal, the tool will show how that action can lower their predicted costs, as well as offer possible next steps for pursuing that goal. 

"When faced with future health costs, many people are either overwhelmed or overconfident," said Banda. "Thinking that your health care will be paid for by Medicare alone or avoiding health care planning altogether are not the right solutions. The more you know and plan for you and your family's health care, the better off you will be in the long run."

The Health Care Costs Calculator requires no registration and collects no personal data on any user.

To learn more about the tool

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