For the first time , the institute also looked at how Medicare Advantage plans , which many retirees are choosing to control costs , compare with the traditional Medicare route plus Medigap Part G insurance .

While there can be significant variations in Medicare Advantage plans , 73 % of enrollees chose a zero-premium plan in 2023 , which meant paying more out of pocket as care was needed .

Under the Advantage plan , that same 65-year-old man wanting a 50 % chance of meeting healthcare expenses in retirement would need to have saved $ 57,000 — just over half of what a traditional Medicare enrollee would need . And a woman with the Advantage plan would need $ 69,000 . For those wanting a 90 % chance , they would need $ 99,000 and $ 116,000 , respectively , or $ 189,000 as a couple .

typical U . S . couple will need as much as $ 413,000 to cover their healthcare expenses in retirement , an 8 % increase from a year ago , according to the Employee Benefit Research Institute ( EBRI ).

To have a 50 % chance of meeting healthcare expenses , a 65-year-old man enrolled in a Medigap Part G plan with average premiums would need to have $ 106,000 saved for healthcare and a woman would need $ 128,000 , a recent EBRI study says .

If they ’ d like a more certain 90 % chance of covering these expenses , the same man and woman would need $ 184,000 and $ 217,000 , respectively , or $ 351,000 if they were a couple .

If the couple has particularly high pre- scription drug expenses , they would need $ 413,000 , the institute said .

“ The fact of the matter is , most people aren ’ t going to be hitting their max out-ofpocket costs year after year ,” says Jake Spiegel , who co-authored the report . “ So they would end up with the lower savings target .”

The EBRI assumed there would be a $ 2,000 cap on prescription drug costs beginning in 2025 , thanks to the Inflation Reduction Act of 2022 . And it assumed there would be a 3 % return on the bond portion of a 60 / 40 portfolio and a fluctuating return on the equity portion , he says .

“ Our model doesn ’ t take into account expenses that people might face that Medicare doesn ’ t cover , such as dental or vision . And

The EBRI assumed there would be a $ 2,000 cap on prescription drug costs beginning in 2025 , thanks to the Inflation Reduction Act of 2022 .

“ There certainly are trade-offs ,” Spiegel says . “ If you ’ re the person who wants the safety of knowing you can go with any provider , then Medigap Plan G could be the way to go . But if you ’ re willing to put in the legwork and spend some time figuring out how best to manage your care within the parameters of a Medicare Advantage plan , you could really drive some savings .”

— Jennifer Lea Reed all assets and liabilities , and provide proof of monthly income and expenses ,” Mays says . “ There ’ s usually a fee for setting up a payment plan .”

OICs are also only available in limited circumstances . “ An OIC may be available when it can be established that the full debt can ’ t be paid off in a ‘ reasonable amount of time ,’” Mays says . “ The IRS will ask for detailed financial information [ and ] may still file a federal tax lien . And the collection statute of limitations may be extended .”

Wealthy clients tend to be unaware of these potential answers to tax debt “ unless they have been through some challenges with the IRS ,” Mays adds . “ And if they had an issue with the IRS , our recent experience is that the agency is less likely to provide leniency on payment terms . They ’ re more favorable to first-time offenders .”

— Jeff Stimpson

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