The Grisly Truth About Diabetics and Retirement Savings
Life + Money

The Grisly Truth About Diabetics and Retirement Savings


The better your health, the more money you’re going to need to set aside for health care, according to a new report from the Empower Institute, which offers retirement insights.

“Excellent health, ironically, can actually raise an individual’s lifetime health spending needs because of the likelihood that healthy 65-year-olds will live much longer,” the report reads.

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According to Empower estimates, a 65-year-old man with Type 2 diabetes should put away about $88,300 for medical costs, a tobacco user needs to accumulate about $114,900 for medical costs, while a healthy 65-year-old man needs to set aside $143,800. That’s over $55,000 more than the retiree with diabetes.

The reasoning behind these calculations is that a diabetic man’s life expectancy is 78, versus 81 for a smoker and 87 for a healthy man. Although individuals with these conditions have higher annual healthcare costs, they don’t have to pay them as long. These figures are estimates of the amount needed for a 90 percent probability of covering lifetime medical expenses. 

In its expense projections, Empower included premiums for Medicare parts B and D and supplemental insurance, as well as out-of-pocket expenses for expenses that aren’t covered by Medicare, including dental, vision and medical care. The six health conditions that were measured were diabetes, cancer, high blood pressure, high cholesterol, cardiovascular disease and tobacco use. The projections factored in inflation rates that vary by medical condition.

Related: Gen X-ers Are Behind in Retirement Savings

But not all of the health conditions studied significantly reduces life expectancy. For example, individuals with cardiovascular disease and blood pressure will need to save more than the required savings for healthy individuals. That’s because those conditions come with higher annual costs but don’t have as big an impact on mortality. 

Savings for Man

Gender also plays a role in health savings. A healthy 65-year-old man needs to put away about $144,000 to have a 90 percent chance of saving enough, while a healthy 65-year-old woman needs to save around $156,000. The suggested savings for women is higher because women tend to live longer than men. 

Savings for Women

Not surprisingly, the study also found that as Americans age, the unhealthier they become. Only one fifth of households are healthy in the 60-65 age range, while more than half of households in the 20-30 age group are healthy. 

Incidence Rates by Age