Vanguard health care cost study

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corn18
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Joined: Fri May 22, 2015 6:24 am

Vanguard health care cost study

Post by corn18 » Sun Jun 24, 2018 7:37 pm

I did a search and did not see this posted. In depth look at health care costs for retirees done by Vanguard. Very detailed and interesting.

https://personal.vanguard.com/pdf/ISGPLHC.pdf

AlohaJoe
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Re: Vanguard health care cost study

Post by AlohaJoe » Sun Jun 24, 2018 8:52 pm

This chart from the paper is a good example of why Americans are so stressed about healthcare expenses in retirement.

If you're low-risk then your expenses will be between $3,200 and $3,800 a year per person (between the 25th and 75th percentile, so ignoring the extreme edge cases). But if you're high-risk then your expenses will be between $4,600 and $13,300. The first one is something you can plan & budget for relatively easily. "Let's call it $3,500 a year." But the second one is such a huge range, what do you do? Sure, if you have enough money you can spend nearly $10,000 a year extra without sweating it. But I don't think many people have an extra $10,000 in their retirement budgets.

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CULater
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Re: Vanguard health care cost study

Post by CULater » Mon Jun 25, 2018 1:17 pm

Here's the elephant:
Long-term care costs represent a separate planning challenge given the wide distribution of potential outcomes. Half of individuals will incur no long-term care costs—but there is a small but meaningful risk that costly care will be required for multiple years.
Ahhhh. If I only knew whether I would need nursing home or Alzheimer's care in my latter years. If the answer is YES, then I'm cooked. The stats say that half of the people age 85 or older have Alzheimer's so if you are planning on living that long, start saving...
May you have the hindsight to know where you've been, The foresight to know where you're going, And the insight to know when you've gone too far. ~ Irish Blessing

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