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.