Retiring This Year? Couples Will Pay $240,000 In Medical Expenses
A recent report by Fidelity investments has found that a couple retiring in 2012 will need $240,000 to cover their medical expenses over the rest of their lives. The annual projection reported a 4 percent increase over last years $230,000 cost structure, a rather modest increase by recent industry standards over the last decade.
Citing President Barack Obama’s health care overhaul the company notes that Medicare changes from that plan will gradually reduce the out-of-pocket expenses for many seniors, specifically in the area of prescription drugs.
Sunit Patel, a senior vice president for benefits consulting at Fidelity tells BusinessWeek:
“As long as health care cost trends exceed personal income growth and economic growth, health care will still be a growing burden for the country as a whole and for individuals.”
The study notes that a 4 percent increase is actually much smaller than the 6 percent average since Fidelity because making its calculations in 2002.
Fidelity specifically calculated the cost of retired medical payments based on a 65-year-0ld couple retiring in 2012 with Medicare coverage. Fidelity in its assessment included premiums, co-payments, deductibles and out-of-pocket prescription costs. The study also included a life expectancy of 85 for women and 82 for men.
Throw in dental care, long-term care services, vision plans and other expenses and that number can quickly skyrocket out of control as it often does for many retired people who need further assistance as they grow older.
The company’s goal is to show clients why they need to take in extra factors when planning for their retirement, factors outside of food, shelter and basic living expenses.