American retirement planners don’t have to look far to find something that beat inflation and left the S&P 500 in the dust over the last year.

Health-care costs have increased by 7.3 percent from 2015 to 2016 according to HealthView Services’ “2016 Retirement Health Care Costs Data Report,” far exceeding the annual U.S. inflation rate of 0.7 percent and the nominal 1.2 percent return registered by the S&P 500.

According to HealthView’s analysis, a person retiring today faces over $33,000 more in total retirement costs than a person who retired a year ago because of health-care cost inflation.

Total projected health-care premiums for a healthy 65-year-old couple retiring this year are projected to be $288,400 in today’s dollars. When out-of-pocket expenses like deductibles, copays, hearing, vision and dental are included, expenses swell to $377,412 in today’s dollars, according to HealthView.

For someone retiring in May 2016, HealthView projects health-care inflation to average over 5 percent annually for the next 20 years. Future retirees could face an additional annual 4.5 percent increase or more for supplemental plan coverage, since supplemental premiums are age-based.

HealthView says that increases in health-care costs will combine with the elimination of some Social Security filing strategies, increased Medicare Part B premiums, adjustments in supplemental insurance coverage and the 2016 zero cost-of-living adjustment to Social Security to put financial strain on retirees.

HealthView’s Retirement Health Care Cost Index, which measures the percentage of Social Security required to cover retirement health-care costs, declined from 67 percent in 2015 to 57 percent this year for a 66-year-old couple retiring in the second half of 2016, a decline due to an increase in COLA projections.

Social Security COLAs are projected to rise by 3.1 percent in 2017 and then 2.7 percent annually after 2017.

Under HealthView’s current projections, future retirees will have to use most or all of their Social Security benefits to cover health-care expenses. For a 55-year-old couple planning to retire in 2027 at the age of 66, the Retirement Health Care Cost Index decreased from 90 percent in 2015 to 88 percent today.

HealthView writes that advisors and savers can address health-care cost inflation through better investment allocations, more saving and increased saving time horizons.

First « 1 2 » Next