How Much Will Health Care Cost in Retirement?

Retired Couple at Health Care Visit Looking at Prescription

The average 65-year-old couple retiring this year will need an estimated $260,000 to cover health care costs in retirement.

On top of that, it will cost $130,000 to insure against long-term care expenses.

That’s upwards of $400,000 for health care in retirement, according to the latest estimate from Fidelity Benefits Consulting1.

And that doesn’t include the cost of nursing home care, if you should need it.

How are health care costs potentially going to affect your retirement?

If you haven’t planned for these costs ahead of time, you or your financial advisor may need to look to other sources of income to support the rising costs of health care during retirement. This may mean you continue to work, tap into investments, or other strategies.

According to the Washington Post2, 75 percent of Americans say they plan to work “as long as possible” in retirement. Thirty-five percent of those respondents plan to work because they need the money.

To accommodate the rise of health care costs in retirement, you may also need to create a brand new budget. If you do not plan on working once you retire, you may be able to cut some of your current expenses to pay for your medical care.

Whatever your plans for retirement, you’ll want to discuss the costs of health care with your financial advisor. This way, you can plan around the inevitable and try to live the lifestyle you desire.  

Looking for more answers?

Retirees or soon-to-be retirees can find more information on our retirement planning section.

The information in this material is for general information only and is not intended to provide specific investment advice for any individual.

1 https://institutional.fidelity.com/app/item/RD_13569_29195/retiree-health-costs-rise.html

2 https://www.washingtonpost.com/news/get-there/wp/2016/09/10/7-of-10-americans-plan-to-work-in-retirement/

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