A 65-year-old couple retiring in 2013 is estimated to need $220,000 to cover medical expenses throughout retirement, according to a health care cost analysis by Fidelity Investments, a Boston-based financial services company whose investment products include retirement savings plans.
Fidelity’s estimates for such costs had increased an average of 6 percent annually between 2002 and 2012, but the 2013 figure is 8 percent lower than last year’s figure, Fidelity’s Wednesday press release noted.
A change in demographics as well as smaller payment increases to doctors and hospitals were among reasons that Fidelity cited for the decrease.
“While lower, this year’s estimate is still daunting for many retirees, and it will consume a considerable amount of a couple’s retirement savings,” Brad Kimler, executive vice president of Fidelity’s Benefits Consulting business, said in a statement. “It is extremely important that health care costs are factored into retirement savings strategies today so that retirees can be prepared to pay their medical bills throughout retirement.”
In February, a Fidelity study found that many consumers underestimate the amount of savings they may need to cover health care costs in retirement. While Fidelity’s annual retiree health care cost estimate has exceeded $200,000 every year since 2006, that recent poll of “pre-retirees,” (people in the 55-to-64 age group found that 48 percent of respondents believe they would only need $50,000 to cover such costs, Fidelity said.