1. © Employee Benefit Research Institute 2010 1 Issues Related to Saving for Health Care in Retirement Paul Fronstin, Ph.D. Director, Health Research and Education Program Employee Benefit Research Institute Washington, DC Copyright© - Employee Benefit Research Institute Education and Research Fund, 1978-2010. All rights reserved. The information contained herein is not to be construed as an attempt to provide legal, accounting, actuarial, or other such professional advice. Permission to copy or print a personal use copy of this material is hereby granted and brief quotations for the purposes of news reporting and education are permitted. Otherwise, no part of this material may be used or reproduced without permission in writing from EBRI-ERF.

2. © Employee Benefit Research Institute 2010 Confidence in Ability to Afford Health Care Without Financial Hardship Source: 2010 EBRI/MGA Health Confidence Survey.

3. © Employee Benefit Research Institute 2010 Reaction to Increased Health Care Costs 3 Source: 2010 EBRI/MGA Health Confidence Survey.

4. © Employee Benefit Research Institute 2010 Disconnect Between Child’s Knowledge of Parents Financial Security and Parents Perception 4 Knowledge of parents Medicare supplemental insurance Discussions regarding income & expenses Knowledge of parents income Source: 2010 EBRI/MGA Health Confidence Survey.

5. © Employee Benefit Research Institute 2010 Average Individual Retirement Income Deficit, by Gender, Martial Status and Age Cohort (in 2010 $s): With and Without Stochastic Health 5 Source: VanDerhei, October 2010, EBRI Notes.

6. © Employee Benefit Research Institute 2010 Savings Needed for Medigap Premiums, Medicare Part B Premiums, Medicare Part D Premiums and Out-of-Pocket Drug Expenses for Retirement at Age 65 in 2010 Median Prescription Drug Expenses Throughout Retirement 75th Percentile of Prescription Drug Expenses Throughout Retirement 90th Percentile of Prescription Drug Expenses Throughout Retirement Men Median $ 70,000 $ 79,000 $ 100,000 75th Percentile 104,000 118,000 147,000 90th Percentile 133,000 151,000 187,000 Women Median 93,000 105,000 131,000 75th Percentile 121,000 137,000 170,000 90th Percentile 152,000 173,000 213,000 6 Source: EBRI.

7. © Employee Benefit Research Institute 2010 Savings Needed for Medigap Premiums, Medicare Part B Premiums, Medicare Part D Premiums and Out-of-Pocket Drug Expenses for Retirement at Age 65 in 2020 Median Prescription Drug Expenses Throughout Retirement 75th Percentile of Prescription Drug Expenses Throughout Retirement 90th Percentile of Prescription Drug Expenses Throughout Retirement Men Median $ 117,000 $ 132,000 $ 166,000 75th Percentile 174,000 198,000 246,000 90th Percentile 223,000 253,000 313,000 Women Median 156,000 176,000 220,000 75th Percentile 203,000 230,000 285,000 90th Percentile 255,000 290,000 357,000 7 Source: EBRI.

8. © Employee Benefit Research Institute 2010 PPACA & Re-Baseline Impact on Savings Needed for Retirement at Age 65 in 2020 Median Prescription Drug Expenses Throughout Retirement 75th Percentile of Prescription Drug Expenses Throughout Retirement 90th Percentile of Prescription Drug Expenses Throughout Retirement Men Median-19%-22%-42% 75th Percentile-22%-26%-47% 90th Percentile-25%-29%-51% Women Median-26%-25%-46% 75th Percentile-28% -49% 90th Percentile-31% -53% 8 Source: EBRI.