The cost of retirement health care: Expectations and concerns of older workers

Insights Report

The expected cost of health care in retirement is a major concern of older workers.


To gauge the amount of money they will need for a comfortable retirement, individuals must account for expected health care expenditures. However, general estimates of such costs can vary widely, and attempts to evaluate individual needs may prove daunting to many near retirees. This paper describes the perceptions and concerns of older higher education faculty and staff regarding health care costs in retirement, including how much money people expect to spend on health care after they stop working, whether they are saving for such costs, and how they plan to finance their health care needs.

Key Insights

  • Across wealth levels, many workers are concerned about their ability to pay for health expenses in retirement.
  • Yet most individuals have not saved specifically for such costs, nor have they reviewed their employer-provided retiree health care benefits.
  • Those who are unfamiliar with their benefits exhibit higher levels of concern about retiree health care costs.
  • Most people expect to rely primarily on Social Security and/or their retirement plan assets to fund health care costs in retirement.

Enhancing workers’ understanding of their retiree health benefits could help households develop better strategies for ensuring financial well-being in retirement.


The authors in 2016 surveyed 2,532 full-time workers aged 50 and older employed at one of 14 higher education systems across the U.S. The participating institutions offer a wide variety of retiree health care benefits, ranging from no such benefit at all, to a defined contribution benefit, to several types of traditional defined benefit retiree health plans.


Robert Clark

North Carolina State University

David P. Richardson
Brent Davis

TIAA Institute

Sign up for the TIAA Institute newsletter

Get the latest research and insights straight in your inbox

We are sorry.

The service that receives your request is unavailable at the moment. Please try again.

Related Publications