As much as people try to understand their financial needs in retirement, one unknown cost is health care. Despite the existence of Medicare insurance for seniors, it does not cover all costs and health care can be extremely expensive, particularly as one ages.

For instance, according to the analysis “Healthcare Costs & Spend: Rising by Age, Gender, and Race” by registerednursing.org, by the time one reaches age 65, average health care costs are $11,300 per person, per year—nearly triple the annual average cost of those in their 20s and 30s. The average health care expenses for women is nearly twice as high as for men. And minority groups such as Black and Hispanic Americans costs are nearly 30% less than on White Americans.

Registerednursing.org analyzed several reports to create this analysis.

According to the Department of Health and Human Services MEPS survey data of medical costs by age and demographics dating from 1999 through 2016, health costs are lowest from age five to 17 at just $2,000 per year on average. From then on, it’s a steady increase with costs rising to over $11,00 per year.

In addition, according to the data, women will need to budget more than men for health care expenses each year. Not only that, but women tend to live two more years than men in the United States,  which requires additional savings.

There is an average of $3,500 annual health care spending by white adult Americans, approximately 70% higher than for Asian, Black, and Hispanic Americans. The root cause and implications of this unequal spending should be studied further to see if their remedy can improve health care outcomes for all, according to the registerednursing.org analysis.

If one adds annual spending figures, in today’s dollars, if you’re “average,” one can expect costs to be $414,000 over a lifetime. However, according to visualcapitalist.com, there is reason to believe this estimate is conservative. Their data suggests that health care costs in the United States have been increasing faster than inflation. 

Even with the best health insurance, senior citizens are often charged expensive co-pays or need drugs that their plans won’t cover. These expenses can impact ones retirement savings and even result in bankruptcy. As one saves for retirement, it’s important to understand the value of having savings for your future medical expenses, which will likely be higher than they are today.

Medical surveys were analyzed by the staff at registerednursing.org. See their report here.