Lifetime Medical Spending of Retirees

Abstract: Retirees face considerable medical expenses during their remaining lives. Model simulations suggest that although a large amount of that spending can be predicted ? based on attributes such as income, health, and marital status ? there remains significant dispersion. Households with heads who turned seventy in 1992 will incur $122,000 in medical spending on average, including out-of-pocket expenditures and Medicaid payments. But the top 5 percent of households will incur more than $300,000 in such spending. The level and dispersion of this spending diminish only slowly with age.

Keywords: retirees; medical spending; elderly;

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Bibliographic Information

Provider: Federal Reserve Bank of Richmond

Part of Series: Richmond Fed Economic Brief

Publication Date: 2019

Issue: May