The average couple retiring this year can expect to pay $220,000 in health care costs during the course of their retirements, according to a new estimate from Fidelity Investments.
Among people older than 55 who have not retired, only a small minority was able to correctly estimate health care expenses, Fidelity’s survey found. Just 10 percent of respondents said they expected to spend more than $200,000 on health care for themselves and their spouses during retirement. Nearly 60 percent said they expected to spend less than $50,000.
Fidelity’s estimate includes Medicare premiums, out-of-pocket expenses, and co-pays that the average couple could expect to incur, but not the potential costs of nursing homes.
The estimate is unchanged from last year’s. The projection peaked in 2010 at $250,000, but has since dropped because of increased Medicare coverage of prescription drugs and reduced consumption of health care, Fidelity said.
Fidelity noted that its estimate was made for 65-year-old couples where men were projected to live to 82 and women, 85. The company also noted that retiring before 65 would add another $17,000 a year to a typical couple’s health care costs. On the other hand, working past 65 could save them $10,000 per year.Jack Newsham can be reached at email@example.com. Follow him on Twitter @TheNewsHam.