PROVIDENCE – Health care in retirement is more expensive than ever, according to Fidelity Investments Inc.’s annual Retiree Health Care Cost Estimate published on May 7.
The latest study suggests a couple retiring this year should expect to spend $300,000 in health care and medical costs throughout their retirement – the highest in the history of the 20-year survey. Single female retirees would need $157,000 and single male retirees would need $143,000, according to the latest data. This represents a 1.7% increase over 2020, and a 30% rise over 2011, according to a news release.
Seifert Systems Invests in Energy Efficiency to Strengthen Operations
For manufacturers, energy is more than just another operating expense. It plays a critical role…
Learn More
Despite the higher costs associated with health care in retirement, a majority of Fidelity customers – 58% – say they spend “little to no time” planning or thinking about these expenses. Among those who are planning ahead, half think they need $50,000 or less to cover health care costs in retirement.
While more education and awareness is needed, Fidelity customer data shows more people are saving for retirement generally, with record savings rates and balances across 401(k), 403(b) and IRA accounts at the end of 2020. The investment company also saw a 19% increase in health savings accounts opened in 2020, with total assets surpassing $10 billion.
Saving for retirement has become especially important as the COVID-19 pandemic has changed or accelerated retirement plans for 82% of Americans, according to a prior Fidelity study. About 1 in 5 people within 10 years of retirement age say they plan to cut their working years short sooner because of COVID-19, most of whom are under 65 years old and will need to pay for their own health insurance before they are eligible for Medicare, according to Fidelity.
The study estimates for retirement health care costs reflect expenses for people enrolled in Medicare. The study reflects survey data from more than 13,000 Fidelity plan participants collected in January and February of 2021.
Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.
