Health Care Costs for Couples in Retirement Rise to an Estimated $245,000

[Corporateburnout]

FIRE'd nine years with the past three on Medicare Parts A, B and D plus a supplement, I find the Fidelity estimate reasonable. If it's high for you, so be it. I'm sure there are many people that are far above and far below their average number.

I'd worry more about an estimate that seemed too low. Getting caught in retirement needing much more for health care costs than planned could be a pita!

What's your estimate? And if your estimate is significantly lower than Fidelity's, how are you doing it?

+1
I'm not sure why people think that FIDO's estimate is high. If a couple have Medicare A, B and D plus a supplement their premiums may be around $600 per months which is $7200 per year. Any co-pays or dental work can easily bring spending to 10K. That's 300K for a 30 year retirement.

We're not on medicare but our insurance premiums through the ACA exchange are similar to medicare and we will spend 14K in healthcare this year due to extensive dental work.

Like you I don't want to underestimate our healthcare cost in retirement and that's why we budgeted 12K/year.

 

[daylatedollarshort]

This AARP article has a detailed break out of likely health care costs in retirement per person:

"Put it all together and you're looking at $3,069.80 a year for basic Medicare coverage, assuming you meet your hospital deductibles. And unless you stay out of a hospital altogether, you will meet the deductible."

Health Care Costs - Budget Your Retirement Savings - AARP

Adding up two people on Medicare, plus dental and other expenses not covered by Medicare, gets you to $5K per person per year. $10K a year for two X 25 years = $250K total retirement health care funding seems pretty reasonable to me.

 

[MichaelB]

That statement confuses me MichaelB. Why couldn't the Fidelity number be an average with lower amounts spent by folks without the resources to spend more averaged with higher amounts spent by those that can afford to spend more?

I wrote average, probably should have said median. The Fidelity number is most likely neither. It's a projection, based on some combination of actual numbers and methodology.

This AARP article has a detailed break out of likely health care costs in retirement per person:

Thanks for that link. Even that number is debatable, $3059 assumes the Med A hospitalization deductible is fully paid each year.

I'm not arguing that the Fidelity estimates should not be used, just that they are unaffordable at the median levels of income and assets. I think healthcare costs will be as high as each of us can afford. That industry has been very successful in grabbing an increasing share of disposable income, this has been happening steadily for about 3 decades, and there is no reason it will stop.