BOSTON Couples retiring this year can expect their medical bills throughout retirement to cost 4 percent more than those who retired a year ago, according to an annual projection released this month by Fidelity Investments. <\/p>\n
The estimated $240,000 that a newly retired couple will need to cover health-care expenses reflects the typical pattern of projected annual increases. The Boston-based company cut the estimate for the first time last year, citing President Obamas health-care overhaul. Medicare changes resulting from that plan are expected to gradually reduce many seniors out-of-pocket expenses for prescription drugs. <\/p>\n
But Fidelity says overall health-care cost trends are on the rise again, so its raising its cost estimate from last years $230,000 figure. <\/p>\n
As long as health-care cost trends exceed personal income growth and economic growth, health care will still be a growing burden for the country as a whole and for individuals, says Sunit Patel, a senior vice president for benefits consulting at Fidelity, and an actuary who helped calculate the estimate. <\/p>\n
However, this years 4 percent rise is relatively modest. Annual increases have averaged 6 percent since Fidelity made its initial $160,000 calculation in 2002. <\/p>\n
The projections are part of Fidelitys benefits consulting business. The study is based on projections for a 65-year-old couple retiring this year with Medicare coverage. The estimate factors in the federal programs premiums, co-payments and deductibles, as well as out-of-pocket prescription costs. The study assumes that the couple does not have insurance from their former employers, and a life expectancy of 85 for women and 82 for men. The estimate doesnt factor in most dental services, or long-term care, such as the cost of living in a nursing home. <\/p>\n
This years estimate could change significantly. Next month, the U.S. Supreme Court will decide whether to strike down part or all of the 2010 health-care law, including its centerpiece requirement that nearly all Americans carry insurance or pay a penalty. <\/p>\n
Fidelitys finding of a 4 percent increase in long-term medical costs for retirees is in line with recent data from the Employee Benefit Research Institute, said Paul Fronstin, director of health research and education for the private nonprofit organization. <\/p>\n
In its latest annual estimate, released last August, EBRI projected that a couple with median drug expenses meaning half of the population would have higher, and half lower would need $166,000 for a 50 percent chance of having saved enough to cover health care expenses in retirement. Theyd need $287,000 for a 90 percent chance. <\/p>\n
The findings illustrate the importance of factoring in health care alongside housing, food and other expenses in retirement planning. Its a fixed liability for the majority of folks, Patel says. <\/p>\n<\/p>\n
Originally posted here: <\/p>\n
Retired couples may need $240,000 for health care<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" BOSTON Couples retiring this year can expect their medical bills throughout retirement to cost 4 percent more than those who retired a year ago, according to an annual projection released this month by Fidelity Investments. The estimated $240,000 that a newly retired couple will need to cover health-care expenses reflects the typical pattern of projected annual increases. The Boston-based company cut the estimate for the first time last year, citing President Obamas health-care overhaul Continue reading