Milliman 2025 Retiree Health Cost Index: Average Couple Needs $388K for Retirement Healthcare
Milliman, Inc., a global actuarial and consulting firm, has released its 2025 Retiree Health Cost Index projecting healthcare costs for a healthy 65-year-old couple during retirement. The index estimates that an average couple will need approximately $388,000 in savings to cover healthcare expenses, including premiums and out-of-pocket costs, during their retirement years. Costs vary based on factors such as location, retirement timing, health status, and type of coverage selected.
The index highlights recent trends, noting that healthcare savings requirements have increased by $17,000 for couples with Medigap coverage between 2022 and 2025. Conversely, the savings estimate for couples with Medicare Advantage Prescription Drug (MAPD) plans decreased by $12,000 in the same period. These shifts are attributed to changes in price and utilization, expected inflation, and regulatory influences including provisions from the Inflation Reduction Act.
This comprehensive cost projection provides valuable insight for retirement planning, emphasizing the importance of understanding how healthcare expenses can fluctuate due to various market and policy dynamics. Employers and consumers alike benefit from awareness of these evolving costs when preparing for retirement healthcare funding.
Milliman leverages actuarial expertise and data analytics to inform solutions addressing financial insecurity and rising health costs affecting retirees and other public and private sector clients. Their Retiree Health Cost Index serves as a benchmark tool to guide strategic planning for healthcare financing in retirement.
The full report and detailed data can be accessed through Milliman’s official website, enabling industry stakeholders and financial planners to incorporate these projections into retirement readiness assessments. The findings underscore the continuing complexity and significance of healthcare cost management amid an aging population and changing regulatory environment.