Health care costs are taking an increasingly larger share of retiree budgets-increasing an average of 7.5% this year, according to a new report.
   A 65-year-old couple retiring in 2007 will need about $215,000 to cover health care costs in retirement, assuming average lifespans where the male lives for 17 more years and the woman 20 years, according to estimates released by Fidelity Investments.
   That is an increase from 2006, when the expected health care costs in retirement were estimated at $200,000.
   Since Fidelity began making the annual estiamtes in 2002, the average health care costs for retirees have increased 34%-equating to an average annual increase of 6.1%.
   The 2007 estimates assumes retirees do not have employer-sponsored retiree health care coverage and includes expenses associated with Medicare Part B and D premiums, Medicare cost-sharing provisions and out-of-pocket costs for prescription drugs. It does not include expenses such as over-the-counter medications, most dental services and long-term care.
   "A significant amount of retirees told us their state of health is not good, they are spending more in retirement than they ever planned, and some were even forced into an early retirement due to health problems," said Brad Kimler, senior vice president of Fidelity Employer Services Company.