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Retirees may need about $185,500 for healthcare savings
Fidelity says a typical 65-year-old’s out-of-pocket healthcare needs would be $185,500, up 7.5% from last year’s estimate.
Healthcare costs are increasingly weighing on retirement planning, with Fidelity estimating that a typical 65-year-old leaving the workforce this year may need about $185,500 in savings to cover out-of-pocket medical expenses throughout retirement. Yahoo Finance reports the figure is up 7.5% from last year’s expectation of about $172,500, citing its annual survey of estimated retirement healthcare costs.
Fidelity and other researchers also highlight that many retirees may be underprepared. Yahoo Finance notes that about 15% of an average retiree’s annual expenses are health-related, and nearly 4 in 10 retirees said healthcare expenses were higher than they expected when they first retired, according to a statement from the Employee Benefit Research Institute.
The article also points to Medicare beneficiaries’ concerns about cost growth. Yahoo Finance says a recent KFF poll found that half of Medicare beneficiaries ages 65 and older expect their healthcare costs to rise in the next year.
Fidelity’s estimate assumes enrollment in traditional Medicare Parts A and B and Medicare Part D, including premiums, copayments, and other out-of-pocket costs. Yahoo Finance adds that this year the monthly Part B premium rate is $202.90, and the annual Part B deductible rose by $26 to $283, while Fidelity’s evaluation does not include long-term care expenses, most dental services, or many over-the-counter costs.