A 65-year-old couple retiring today will need $200,000 to cover medical costs in retirement - a 5.3% increase from the estimate last year of $190,000 - according to a survey released Monday by Fidelity Investments.
Since Fidelity's initial estimate of $160,000 in 2002, growth in projected retirement medical costs has averaged 5.8% per year, according to the Boston mutual fund company. The increases can be attributed to a double-digit decline in the number of companies offering retiree health benefits to their employees, according to Fidelity.
In addition, health insurance premiums are growing at a rate more than three times the pace of growth in workers' earnings, Fidelity said.
The 2006 estimate, which assumes people who lack employer-sponsored retiree health care, includes expenses associated with Medicare Parts B and D premiums (32%); Medicare cost-sharing provisions (36%); and prescription drug out-of-pocket costs (32%). It excludes costs such as over-the-counter medications, most dental services, or long-term care.
