Being Healthy Could Cost You More in Retirement

A new Issue Brief released by the Center for Retirement Research at Boston College finds that a typical healthy couple at age 65 can expect to spend $260,000 with a 5% risk of exceeding $570,000, while a typical unhealthy couple can expect to spend $220,000 with a 5% risk of exceeding $465,000. The researchers found this is because those in good health live longer, eventually become less healthy, and often need nursing home care.  

The researchers used data from the Health and Retirement Study (HRS) (a nationally representative sample of older Americans) to create a large number of simulated lifetime health and health care cost histories for each HRS household observed at age 65. In each simulation, the members of the house­hold experience the onset of various chronic diseases (diabetes, cancer, lung disease, heart disease, and stroke), enter nursing homes, and eventually die.  

The brief notes that people in good health can expect to live significantly lon­ger – at age 80, people in healthy households have a remaining life expectancy that is 29% longer than people in unhealthy households – and, therefore, are at risk of incurring health care costs over more years. According to the researchers’ simulation, individuals who are free of any chronic diseases at age 80 can expect to spend one-third of their remaining life suffering from one or more such diseases. They face an even higher lifetime risk of requiring nursing home care than those who are not healthy.