Fidelity: A couple retiring today needs $285K for medical expenses

PROVIDENCE – A 65-year-old couple retiring today can expect to spend $285,000 out of pocket for health care and medical expenses through their retirement, according to the annual “Retiree Health Care Cost Estimate” from Fidelity Investments.

For single retirees, this year’s out-of-pocket health care cost estimate throughout retirement is $150,000 for women and $135,000 for men.

The annual estimates assume both members of a couple are eligible for Medicare, which between Medicare Part A and Part B covers expenses such as hospital stays, care at a skilled nursing facility, doctor visits and services, physical therapy, lab tests and more.

This year’s retirement estimate for couples was up slightly from last year’s estimate of $280,000. The past two years combined have seen a slower increase in estimated health care costs for retirees (3.6%) than the two previous years (12.2%), according to Fidelity.

- Advertisement -

The promising news for this year’s retirees is that out-of-pocket Medicare costs have leveled in the past year, compared with increases in prior years. However, Fidelity said, many Americans are still unclear about what Medicare does and does not cover, likely a reason many still underestimate the cost of health care in retirement.

A 35-year-old couple today can potentially save $285,000 over the next 30 years if they save $2,830 a year, according to Fidelity. The company said this year’s estimates should serve as a “call to action” for younger generations, reminding them to take advantage of time and investing opportunities.

“Paying for health care – before and in retirement – continues to be top-of-mind for Americans, and understandably so as it’s a cost that can vary significantly by individual and is difficult to predict,” said Hope Manion, senior vice president, Fidelity Workplace Consulting.

“Know this,” Manion added, “Fidelity wants to help by offering a guideline for today’s retirees, and to broaden awareness among people of all ages so they can set more realistic expectations and become better prepared for potential health care costs when planning for retirement.”

Scott Blake is a PBN staff writer. Email him at Blake@PBN.com.