Two Better Off Than One With Retirement Health Care Costs

Health care expenses are a big part of retirement expenses — although older singles and couples tend to face sharply different out-of-pocket expenses, according to new research.

Differences in Out-of-Pocket Health Care Expenses of Older Single and Couple Households,” a study by the nonpartisan Employee Benefit Research Institute (EBRI) of out-of-pocket health care spending for households age 65 and older, found a major difference in trends between recurring health care services (such as doctor and dentist visits and prescription drugs) and non-recurring expenses.

Specifically, out-of-pocket spending for recurring health care expenses for those older households over a two-year period averaged about $2,500 per person for both single and couple households, and generally did not change with age. But for non-recurring health spending by those ages 85 and older, singles spent on average about $13,355, compared with $8,530 for couples over the same period, EBRI found.

Those differences are perhaps explained by the fact that older singles do not have a spouse to help as caregivers, according to the EBRI analysis.

Prior research by EBRI has shown that health care expenses represent the second-largest share of household expenses after home-related expenses for older Americans. Additionally, health care is the only component of household expenditures that increases with age, both in terms of absolute dollars and as a share of total household expenses. EBRI notes that n 2011, average annual out-of-pocket health care expenses for a household between ages 65 and 74 was $4,383, capturing on average 11% of total household expenses, while for households ages 85 and above, average out-of-pocket health care expenses increased to $6,603, capturing 19% of household expenses.

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