Fidelity Investments’ annual survey for Retiree Health Care Costs Estimate’s for 2010 found a 65-year-old couple retiring this year will need a quarter of a million dollars ($250,000) to pay for medical expenses throughout retirement, not including nursing-home care. The Fidelity 2010 retiree health care costs estimate is 4.2 percent higher than last year’s estimate of $240,000 and 56 percent higher than in 2002, when Fidelity first calculated retiree health care costs at $160,000. One of the more surprising numbers was that 35% of the retirees surveyed said that they had no financial worries.
Fidelity also surveyed 376 married individuals, 65 years or older and not working full-time, to better understand their experiences in financing health care needs in retirement. This effort revealed that almost half (47%) are paying more each month for insurance premiums and out-of-pocket health care costs than they had anticipated in retirement. Only three out of 10 of these retirees saved specifically for health care needs in retirement during their working years.
The nationwide study found that health care costs average $535 a month, or about one-fifth of an average couple’s total monthly expenses of $2,842. Among those surveyed, 11 percent said their health care costs are $1,000 a month or higher. Average health care costs ranked second to the largest expense, food, which averaged $659 a month and slightly higher than housing-related costs, which averaged $494.
"It’s crucial that workers begin to incorporate future medical expenses into today’s retirement plans," said Brad Kimler, executive vice president of Fidelity’s Consulting Services business. "In the past, retirees relied on their former employers to provide health care coverage, but this is no longer something to which most of today’s retirees have access."
For more information on the survey, visit Fidelity Investments.