Fidelity: Retired Couples Need $240,000 for Medical Expenses

Baby boomers who have lost their health insurance coverage often speak of trying to find a way to make it to Medicare. But even after you reach age 65 and finally qualify for the government health insurance program, you’re still likely to face significant costs.

A 65-year-old couple retiring in 2009 will need approximately $240,000 to cover medical expenses throughout their retirement, even with Medicare insurance coverage, according to a Fidelity Investments estimate released this week. This figure is up 6.5 percent from last year’s estimate of $225,000. Over the past 7 years the amount has jumped $80,000 from Fidelity’s $160,000 estimate in 2002, a 50 percent increase.

Fidelity’s estimate assumes that retirees have no employer-provided retiree health insurance and a life expectancy of 17 years for men and 20 years for women. The $240,000 figure includes deductibles and coinsurance costs retirees are likely to pay for Medicare Part A and B, premiums and out-of-pocket costs for Medicare Part D prescription drug coverage, and some services excluded by Medicare. But the estimate does not take into account over-the-counter medications, most dental services, and long-term care expenses, the last of which could easily cause this number to further skyrocket.

Fidelity attributes the spike in expected health care expenditures to higher costs for doctor’s visits and diagnostic tests, expenses associated with new technology, and general price inflation. But there are a few things you can do to help your cause. Check out these 8 tips for paying for health care in retirement.

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4 Responses to Fidelity: Retired Couples Need $240,000 for Medical Expenses

  1. matt says:

    This blog’s great!! Thanks :).

  2. RaiulBaztepo says:

    Very Interesting post! Thank you for such interesting resource!
    PS: Sorry for my bad english, I’v just started to learn this language 😉
    See you!
    Your, Raiul Baztepo

  3. PiterKokoniz says:

    Hello ! 🙂
    My name is Piter Kokoniz. oOnly want to tell, that I’v found your blog very interesting
    And want to ask you: what was the reasson for you to start this blog?
    Sorry for my bad english:)
    Thank you!
    Your Piter Kokoniz, from Latvia

    • Mike Braun says:

      I created this blog so my clients can have access to relevant resources regarding plan designs for healthcare. In the US, we have a private insurance market where employers can purchase plans for the employees. I give them access to some of these resources through the blog. It is mostly dedicated to Consumer Directed Health Plans (CDHP).
      Other topics I have included are items like Single Payer Systems and nationalized Healthcare. I want to make people aware of the dangers of single payer systems. People in the US do not have any idea the true cos of healthcare. They do not understand all the components and why it costs so much. Some Americans think that if the government takes control of the delivery system costs are going to go down. The only way to reduce cost is to ration care.
      In the USA, there are not enough providers to even treat citizens. We have a problem with the uninsured and illegal immigrants using our resources for healthcare on healthcare with no tax base to support them. The system is not perfect but is very good. We generally do not wait for tests or appointments. We can get most drugs we want and need. If you have insurance and can pay for it, you can get what you need.

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