Tim Robberts/Getty Images
By Philip Moeller
January 29, 2015

For older Americans, figuring out how much you’ll need to save for future health care costs is the toughest part of retirement planning. The bills are not only daunting, but hard to predict. Now two recent studies from the Kaiser Family Foundation provide useful data that can serve as real-world benchmarks for your future health care expenses.

You already know Americans are living longer, and that health care spending is rising along with our life spans. To see how that increase varies over time, one Kaiser study, The Rising Cost of Living Longer, breaks down Medicare spending into its main components—such as hospitals, doctors and drugs—and measures how much Americans spend on these services at different ages.

Those between the ages of 65 and 69, who represent 26% of traditional Medicare beneficiaries, account for only 15% of program expenses in 2011, the most recent year for which data are available. (The study does not include Medicare Advantage plans). People between the ages of 70 and 79 comprise 32% of Medicare beneficiaries and 30% of spending.

Among the oldest Americans—those age 80 and above—the health care taxi meter runs up its largest charges, Kaiser found. These seniors represented 24% of Medicare beneficiaries but generated 33% of program expenses.

Below you can see the breakdown in spending by category for three different ages—70, 80 and 90. As Americans age, the demand for hospital, nursing, in-home care and hospice services climbs.

  • Age 70: Overall Medicare spending of $7,566, including $2,450 in Part A inpatient expenses, $2,054 in Part B doctors and services, $1,159 for hospital outpatient services, $1,191 for drugs (in both Part B and Part D drug plans) $349 for skilled nursing facilities, $279 for in-home care, and $84 for hospice.
  • Age 80: Overall Medicare spending of $11,618, including $3,962 in Part A inpatient expenses, $2,763 in Part B doctors and services, $1,440 for hospital outpatient services, $1,394 for drugs (in both Part B and Part D drug plans) $1,073 for skilled nursing facilities, $664 for in-home care, and $322 for hospice.
  • Age 90: Overall Medicare spending of $14,745, including $4,573 in Part A inpatient expenses, $2,640 in Part B doctors and services, $1,242 for hospital outpatient services, $1,344 for drugs (in both Part B and Part D drug plans) $2,583 for skilled nursing facilities, $1,233 for in-home care, and $1,132 for hospice.

Those are scary numbers, but the real issue for retirement planning is how much of that spending will be coming out of your own pocket. Another Kaiser study, How Much Is Enough, details the amounts older Americans spend on bills for health insurance premiums and uncovered health care expenses at different ages.

People between the ages of 65 and 74 spent $4,020 out of pocket on average in 2010 (he year analyzed by the study). Those between 75 and 84 spent $5,245, while those 85 and older spent $8,191—more than twice as much as younger seniors. On average, 42% of all out-of-pocket spending was for insurance premiums and 58% for uncovered health care expenses, including long-term term care (the biggest chunk, at 18%), medical providers, drugs and dental costs, which Medicare does not cover.

Will your retirement health care spending match these averages? Probably not. Medicare insurance plans differ, and no one can precisely forecast your future health or longevity. That said, even a rough guide can be a useful planning tool. So take a look at your own health care plan and see what coverage it provides for these common medical charges. Consider the likelihood for each type of expense, as well as the average Medicare costs by age, to come up with an estimate of the savings you might need to fund these costs.

To prepare for that spending now, take a look at the sources of your retirement income. If you have a health savings account, do everything you can not to touch it now but let its tax-advantaged balances accrue. It is an excellent vehicle for funding future medical expenses with no adverse tax consequences. Ditto for a Roth IRA, which lets your money grow tax free. For more tips on planning for retirement health care costs, check out MONEY’s stories here, here, and here.

Philip Moeller is an expert on retirement, aging, and health. His book, “Get What’s Yours: The Secrets to Maxing Out Your Social Security,” will be published in February by Simon & Schuster. Reach him at moeller.philip@gmail.com or @PhilMoeller on Twitter.

Read next: Why Women Are Less Prepared Than Men for Retirement

You May Like

EDIT POST