Retiree Health Care Costs Are Rising
Factors driving the increase include longer life spans, health care inflation and health bills for those who retire before they’re eligible for Medicare.
A 65-year-old couple retiring this year can expect to spend $295,000 on health care expenses throughout retirement, according to Fidelity Investments’ latest Retiree Health Care Cost Estimate. That’s an increase of 18% since 2010, when the amount was $250,000, but up just 3.5% from last year, reports Fidelity. (For single retirees, the 2020 estimate is $155,000 for women and $140,000 for men.)
Factors driving the increase in costs, says Fidelity, include longer life spans, health care inflation that continues to outpace the rate of general inflation, and high health costs for early retirees. Many Americans retire at 62, leaving a three-year gap before they are eligible to enroll in Medicare.
The estimates assume that retirees are enrolled in traditional Medicare. The largest portion of the $295,000 cost is from Medicare co-payments, deductibles and excluded benefits, as well as Medicare Part B and Part D premiums and out-of-pocket costs for prescription drugs. However, the estimates do not include the potential cost of long-term care.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
To continue reading this article
please register for free
This is different from signing in to your print subscription
Why am I seeing this? Find out more here
-
What To Look for in Great Dividend Stocks
Dividend-paying stocks have lagged lately but are due for a comeback. Here's what to look for in great dividend stocks.
By Kim Clark Published
-
How to Retire Early by 40: Build the FIRE Now
It's not easy, but you may be able to retire by 40 or 45 if you take these FIRE (Financial Independence, Retire Early) steps now.
By Jacob Schroeder Published
-
403(b) Contribution Limits for 2024
retirement plans Teachers and nonprofit workers can contribute more to a 403(b) retirement plan in 2024 than they could in 2023.
By Jackie Stewart Published
-
SEP IRA Contribution Limits for 2024
SEP IRA A good option for small business owners, SEP IRAs allow individual annual contributions of as much as $69,000 a year.
By Jackie Stewart Published
-
Roth IRA Contribution Limits for 2024
Roth IRAs Roth IRA contribution limits have gone up for 2024. Here's what you need to know.
By Jackie Stewart Published
-
SIMPLE IRA Contribution Limits for 2024
simple IRA The maximum amount workers at small businesses can contribute to a SIMPLE IRA increased by $500 for 2024.
By Jackie Stewart Published
-
457 Contribution Limits for 2024
retirement plans State and local government workers can contribute more to their 457 plans in 2024 than in 2023.
By Jackie Stewart Published
-
Roth 401(k) Contribution Limits for 2024
retirement plans The Roth 401(k) contribution limit for 2024 is increasing, and workers who are 50 and older can save even more.
By Jackie Stewart Published
-
7 Things Medicare Doesn’t Cover
Healthy Living on a Budget Medicare Part A and Part B leave some pretty significant gaps in your health-care coverage. But Medicare Advantage has problems, too.
By Donna LeValley Last updated
-
Four Tips for Renting Out Your Home on Airbnb
real estate Here's what you should know before listing your home on Airbnb.
By Miriam Cross Published