Study: Healthcare Costs Reduce Social Security Benefits By 25%

Study: Healthcare Costs Reduce Social Security Benefits By 25%

Researchers at the Center for Retirement Research at Boston College concluded that out-of-pocket (OOP) healthcare costs erode roughly 25% of an average retiree’s Social Security spending power.

The findings are detailed in a new study titled, How Much Does Health Spending Eat Away at Retirement Income?

Even with Medicare coverage and ignoring long-term care, retirees face sizable out-of-pocket costs for premiums, copays and uncovered services. “After subtracting these costs, the typical retiree has only 75% of Social Security and 88% of total income available for non-medical spending,” said the study.

The study further noted that the share of income remaining after OOP spending is lower for women and those in low-income households.

“With OOP health expenditures eating away at retirement income, and Part B premiums on the rise, it is understandable why many retirees likely feel that making ends meet is difficult,” researchers added. Read the full report.

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Darryl Hicks

Darryl Hicks is Vice President of Communications for the National Reverse Mortgage Lenders Association. In this capacity, Hicks writes for NRMLA's publications, manages the association's web sites and social media accounts, assists committees and the Board of Directors, and manages the Certified Reverse Mortgage Professional designation. Prior to joining NRMLA in 1999, Hicks spent three years in the Washington, D.C. bureau for National Mortgage News.