US retiree health care to cost $200,000: Fidelity
Posted on: Monday, 6 March 2006, 11:25 CST
NEW YORK (Reuters) - Fidelity Investments, the No. 1 mutual fund firm, said on Monday that an American couple that retires at age 65 will, on average, need $200,000 in retirement to cover out-of-pocket medical costs.
That amount, considered the biggest single expense for most people in retirement, increased 5.3 percent from $190,000 last year, said Brad Kimler, a senior vice president of Fidelity Employer Services Co., a company division.
The increase mostly resulted from the rising cost of health care and has gone up an average 5.8 percent a year since Fidelity began releasing the estimate in 2002, the company said.
The number is important as Fidelity has found that most people don't take into account health care when planning for their retirement, and because the number of companies offering health benefits to retirees is declining, Kimler said.
Health-care costs have the potential to significantly erode retirement savings, he said.
"This is the one most frequently overlooked by people when they're doing their retirement planning," he said.
The amount people will need in retirement to cover out-of-pocket health costs will vary because of the medical needs they may encounter, he said. Being healthy before retirement will likely lesson medical costs later, he said.
The estimate for health-care costs assumes that retirees do not have employer-sponsored retiree health care, but includes three typical costs: expenses associated with Medicare part B and D premiums, Medicare cost-sharing provisions -- co-payments, coinsurance, deductibles and excluded benefits -- and prescription drug out-of-pocket costs.
It does not include other health expenses, such as over-the-counter medications, most dental services and long-term care.
Fidelity didn't provide a number for individuals. The cost for males and females varies.
Source: REUTERS
Related Articles
- Pelosi Remarks at Press Conference Today on Health Care Reform and Medical Costs
- Study Shows Consumers With High Deductible Health Plans Are More Savvy About Controlling Costs, Improving Health
- Humana Introduces 2007 Generics Program to Help Members Reduce Out-of-Pocket Medication Costs
- Kryptiq Presents Secure Messaging Successes to AHIC Chronic Care Workgroup; Connectivity Solutions Shown to Improve Patient Care and Reduce Medical Costs
- More Baby Boomers Worried About Gas Prices and Uninsured Medical Costs Than Retirement and Other Long-Term Expenses, AICPA/Harris Poll Suggests
- Cost Care, Inc. Receives URAC Health Utilization Management Accreditation
- Proprietary Data Analysis Tool Helps Manage Soaring WC Medical Costs for Liberty Mutual Policyholders; Boston-Based Insurer is the First to Apply Group Health Data Analysis to WC
- Experts Available to Discuss People With Health Insurance Struggle With Medical Costs
- Medical Costs Spike at County Prison
- Determinants of Diabetes-Attributable Non-Blood Glucose-Lowering Medication Costs in Type 2 Diabetes: The Fremantle Diabetes Study
 |
 |
User Comments (0)
RSS Feeds