The cost of health care in retirement in the U.S. is high and seems set to go higher, in part because of rising drug prices.
"The trend, and it's been pretty consistent, is that the consumer of health care, whether a pre-retiree or someone in retirement, is taking on more and more of the [financial] responsibility," said Ron Mastrogiovanni, chief executive officer of HealthView Services, which creates health-care cost-projection software. He cited the move to high-deductible health-care plans, the high cost of supplemental, or Medigap, insurance to help cover what Medicare doesn't, and the plan to reduce coverage under the most popular supplemental plan, called Plan F, in 2020 as some of elements of higher costs.
One area in which the U.S. had an abysmal ranking was in its high level of income inequality, which helped drive it down to No. 37 of the 43 countries. The U.S. and Singapore share the dubious distinction of being the only countries in the top five for income per capita and in the bottom 10 for their large gaps in income equality. Those data points fall into the "material wellbeing" portion of the index, where the U.S. scores 59 percent to sit at No. 25, below Estonia. That's its lowest score among the report's four sub-indexes, below its No. 16 rank for quality of life.It's worth watching interest rates, which could cause rankings to shift in future years. Low rates are great if you're buying a house or a car, but they stink if you're trying to live on a fixed income in retirement. While Norway, which has started to cut interest rates, is ranked No. 1 overall, No. 1 in material well-being, and No. 3 in the quality of life and health categories, it is No. 9 in the retirement finance measure. If Norway continues to cut rates, "I'll be curious to see what long-term impact that has on its ranking," said Goodsell.
Right now, though, only Denmark, Switzerland, and Iceland top Norway in the report's measure of contentment. When it comes to retirement, the Norwegians are looking pretty fat and happy.