Health care costs for couples in retirement rise to $260,000

A 65-year-old couple retiring in 2016 will need an estimated $260,000 to cover health care costs in retirement, according to recent research from Fidelity. The Retiree Health Care Cost Estimate noted that this is a 6 percent increase over last year’s estimate of $245,000.

The 6 percent increase in this year’s estimate is attributed to several factors, according to Fidelity, including an uptick in the utilization of medical services and rapidly rising drug costs. The estimate applies to retirees with traditional Medicare insurance coverage and provides a general idea of the monthly expenses associated with Medicare premiums, Medicare co-payments and deductibles, and prescription drug out-of-pocket expenses.

“In recent years, the health care industry has experienced a period of historically low spending levels, due to a range of factors including a period of slow economic growth,” said Adam Stavisky, senior vice president, Fidelity Benefits Consulting. “Looking forward, we expect health care spending to pick up from where it’s been in recent years, though less than what we’ve seen over the last few decades.”

SOURCE: www.fidelity.com

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