Wednesday, August 17, 2016

Medical Costs for Retirees Keep Rising

A 65-year-old couple retiring this year will need an estimated $260,000 to cover health care costs in retirement, a 6 percent increase over the 2015 calculation, according to Fidelity’s new Retiree Health Care Cost Estimate. Not surprisingly, this is the highest figure since Fidelity started making these estimates in 2002.

Fidelity based its estimate on a hypothetical 65-year-old heterosexual couple retiring in 2016, with life expectancies of 87 for the woman and 85 for the man, and warns that costs could be more or less depending on actual health status, location and longevity. The estimate was net of taxes.

Fidelity also looked at costs associated with long-term care. Given that Medicare covers long-term care costs only in limited circumstances, Fidelity estimated that a 65-year-old couple would need $130,000, in addition to savings for retiree medical expenses, to insure against long-term care expenses.

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