Health Care Costs are Cutting into Retirement Preparations

This is happening in subtle and not-so-subtle ways

YOU MAY HAVE SEEN THIS STATISTIC BEFORE, OR ONE RESEMBLING IT: The average 65-year-old retiring couple can now expect to pay more than $250,000 in health care costs throughout the rest of their lives.

In fact, Fidelity Investments now projects this cost to be $285,000. The effort to prepare for potential health care expenses is changing the big picture of retirement planning.¹

INDIVIDUAL RETIREMENT SAVINGS STRATEGIES HAVE BEEN ALTERED. How many people retire with a dedicated account or lump sum meant to address future health costs? Very few. Most retirees end up winging it, paying their out-of-pocket costs via income, Social Security benefits, and savings.

While couples can save together, it’s important to note that individuals have considerable health care costs. Fidelity estimates these costs at $150,000 for women and $135,000 for men. Health care expenses can take up a considerable amount of a retiree’s income – 9% to 14%, according to Fidelity. Annual out-of-pocket costs, including dental and vision, could run $3,000 to $8,000 in an average year.²

Households have begun adjusting their retirement expectations to factor in projected health care expenses, and businesses also have quietly made some changes. If you can take advantage of employer matching contributions or a Health Reimbursement Account (HRA), take advantage of these benefits.



If you have any questions or comments about this health care costs article or the Retirement Plan Advisors, please contact Matthew Martin, CFP, Certified Financial Planner:


  • 1 – [12/7/2019]
  • 2 – [4/2/2019]

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

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