One of the biggest threats to your retirement solvency may be the cost of health care and prescription drugs.
A study by West Health and Gallup shows that in the past 12 months, seniors have withdrawn an estimated $22 billion from their long-term savings for health-care-related expenses. The average amount people pulled out was $3,789.
The report, titled “The U.S. Healthcare Cost Crisis,” included a nationally representative survey of more than 3,500 adults.
“Americans in large numbers are borrowing money, skipping treatments and cutting back on household expenses because of high costs, and a large percentage fear a major health event could bankrupt them,” the report said.
“Americans in large numbers are borrowing money, skipping treatments and cutting back on household expenses because of high costs, and a large percentage fear a major health event could bankrupt them,” the report said.”
Here are some key findings from the report.
- 10 percent of Americans 65 and older did not seek needed treatment in the past 12 months because of the cost of care.
- About 7 million seniors couldn’t afford to pay for their prescribed medication in the past 12 months.
- Eighty percent of the prescriptions senior can’t afford are used to treat somewhat serious or very serious health conditions.
- Ninety-two percent of seniors believe the cost of health care will not improve or will get worse.
But it’s not just seniors who worry about the cost of their health care.
The report found that 45 percent of Americans are afraid they will have to file for bankruptcy protection if faced with a major health crisis. In the past year, Americans reported borrowing an estimated $88 billion to cover health-care costs, according to the West Health and Gallup report.
In a recent blog post, Fidelity Investments encourages people to consider how their budgets will be affected by rising medical and prescription expenses.