The Price to Retire

piggy_bankIf you plan to retire soon, you might want to keep your piggy bank close because you’ll probably need it! A new estimate on the costs of health care in retirement, just calculated and released by Fidelity Investments, shows some eye-popping…..and piggy bank busting numbers. How big are the numbers? $280,000 dollars big.

From USA Today:

Got a spare quarter-million bucks sitting around?

If you’re a 65-year-old couple retiring this year you’ll need even more than that to cover health care and medical expenses throughout retirement, according to Fidelity Investments’ annual cost estimate.

Fidelity estimates it will cost a couple $280,000 to cover their health care costs in retirement, up 2% from last year and 75% since its 2002 estimate of $160,000. The math assumes a couple retires at 65 and is eligible for Medicare. The cost for care for males in retirement is an estimated $133,000, while the tab for women, who tend to live longer than men, is $147,000.

According to, the health care cost estimate “has jumped 75% since the company’s first estimate in 2002 (then $160,000). The figure includes life expectancies for the couple, and also includes Medicare coverage and copays, vision, over-the-counter medications and dentures.”

retirement_graph points out, “The report assumes retirement starts at age 65, when Medicare kicks in, and that men will live to the age of 87 and women will live to 89.”

Fidelity’s estimate applies to those with traditional Medicare insurance coverage and considers premiums, co-payments, deductibles, and out-of-pocket drug costs. It excludes the cost of a nursing home or any long-term care you might need. added that the best thing you can do to protect yourself from being overwhelmed by health care costs in retirement….is to prepare and not ignore this issue.

“These are big numbers, and a concern is that a consumer will take a look at it and do the ostrich thing, and stick your head in the ground,” (Hope) Manion, senior vice president with Fidelity Benefits Consulting said. “We can’t do that.”

Kick the tires on your overall plan for financial security rather than worry about health costs, specifically, said certified financial planner Erika Safran, founder of Safran Wealth Advisors in New York City. Working with a financial professional can help you assess how well you’ve prepared, and if there are other plan elements to put in place.

We’d love to hear your thoughts on these new estimates and what it could mean for Arizonans who are on the verge of retirement. What can we do to help people keep costs down without losing any of the coverage they need. Generating meaningful dialogue around the health stories making headlines is just one of the many ways we are working toward our long-term goal of one day making Arizona the Healthiest State in the Nation!



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