26 Percent of Americans Misunderstand Medicare -- and It Could Ruin Their Retirement

Bank of America's 2020 Workplace Benefits Report estimated that only about half of polled U.S. employees are saving money for healthcare expenses in retirement, with those not saving having made a major misunderstanding about Medicare, reports the Grand Island Independent . Twenty-six percent of respondents believed Medicare, Medicaid, or Social Security would cover their healthcare costs in their later years, leading them to mistakenly think that they do not need to set aside money for care. While Social Security provides monthly income, the average monthly benefit of just $1,519 among retirees will make little headway in healthcare expenses for those who have chronic conditions or serious ailments. Although Medicaid provides coverage to a limited number of seniors, they must spend down most of their assets, with very little household income to qualify for coverage. Because Medicare coverage is not that comprehensive, most seniors wind up spending thousands out of pocket even with coverage. According to the Employee Benefit Research Institute, out-of-pocket medical expenses for a senior couple covered by Medicare in 2020 comes to $325,000 throughout retirement. Moreover, many Americans end up retiring before the age of 65, before they become Medicare eligible.