Out-of-Pocket Medical Expenses Could Reach Average of $200,000 for Retirees, Report Says

Out-of-pocket medical expenses in particular could become very costly for retirees, according to a new report from the Vanguard Group. 

The Vanguard Group, with assistance from Mercer Health & Benefits, found that the expected average cost of out-of-pocket medical expenses for a female retiree beginning at age 65, and accounting for the estimated remaining life span which would tack on 24 years, could go to as high as $200,000, WFMY News2 has reported.

The report also revealed that the average cost of out-of-pocket medical expenses for a male retiree is lower by 2 percent due in part to men having shorter lifespans than women on average.

If the prospect of trying to set aside $200,000 for retirement is intimidating and even seemingly unrealistic, the authors of the report encourage people to look at the challenge of saving up for possible expenses in a different way.

Instead of trying to figure out how to save $200,000, the report urges people to break down that amount into more manageable yearly goals.

Doing that reveals that the average retiree might end up needing to spend around $5,200 per year, but that will already cover out-of-pocket medical expenses, Medicare premiums and drug purchases. The number could still rise, but that would likely be due to inflation.

Notably, the estimates for out-of-pocket medical expenses do vary among different studies.

For instance, the Center for Retirement Research at Boston College suggests that the average amount a 65-year-old couple would need to set aside is around…