Retiring at 55? You'll need $372,000 just for medical expensesMay 16, 2013: 11:05 AM ET
Thinking of retiring early? Hope you have a lot socked away for medical expenses.
That's because health care costs can add up quickly when you aren't yet eligible for Medicare, which kicks in at age 65.
Someone who retires today at age 55 will spend an average of $119,600 over the next 10 years on insurance premiums and out-of-pocket expenses, said Dale Yamamoto, who authored a report on medical spending on behalf of the Society of Actuaries and the Health Care Costs Institute. By contrast, a 65-year-old leaving the workforce today will spend only $50,900 over the next 10 years thanks mainly to Medicare, which provides less expensive coverage.
One of the study's goals is to help people understand how much money they'll need to retire.
"My neighbors had no idea how much health care costs," he said. "They were floored by how much it costs for just one year before Medicare kicks in."
By the time today's 55-year-old retiree hits age 85, he will have spent $372,400, on average. The 65-year-old retiree will spend only $146,600.