Associated Press Posted Monday, March 10, 2008
A couple retiring this year will need about $225,000 in savings to cover medical costs in retirement, according to a study released Wednesday by Fidelity Investments.
The figure, calculated for a couple age 65, is up 4.7 percent from the $215,000 estimate for 2007, the Boston-based financial services company said.
And it is similar to other projections for health care costs in retirement — daunting figures given that longer life spans also are requiring workers to increase retirement nest eggs.
A separate study released last month by the Center for Retirement Research at Boston College estimated that an individual needs to go into retirement with some $102,000 earmarked just for health care coverage, while a couple needs about $206,000.
Given current levels of retirement savings, the center said, six in 10 older workers are “at risk” to maintain their standard of living in retirement.
The Fidelity study, which has been conducted annually since 2002, assumes workers do not have employer-sponsored retiree health care coverage. It includes expenses associated with Medicare premium payments as well as co-payments and deductibles, plus out-of-pocket prescription drug costs.
The study blamed the rising health care costs this year on higher unit costs, for example the cost of a doctor’s visit; higher utilization rates for health care services; rising costs associated with new technologies; and increased incidence of some chronic conditions, like diabetes.