5 questions with Fidelity: Paying for health care in retirement

Key Takeaways

  • An average 65-year-old retiring this year can expect to spend $157,500 to cover medical and health care expenses throughout retirement.
  • Start planning for long-term care coverage now. For someone turning 65 today, there’s an almost 70% chance they'll require long-term care*.
  • Medicare is unlikely to cover all the benefits you'll need. So, it's important to review the options available to help cover these costs.
  • Health savings accounts can be used to pay for current health care costs. They can also be saved or invested for future health expenses.
  • Consider working with a financial professional to help determine your potential health care costs and ways you can efficiently save for them.

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*US Department of Health and Human Services, Office of Disability, Aging and Long-Term Care Policy (DALTCP) and the Urban Institute, April 2019.

Investing involves risk, including risk of loss.

This information is intended to be educational and is not tailored to the investment needs of any specific investor.

Estimate based on individuals retiring in 2023, 65-years-old, with life expectancies that align with Society of Actuaries' RP-2014 Healthy Annuitant rates projected with Mortality Improvements Scale MP-2020 as of 2022. Actual assets needed may be more or less depending on actual health status, area of residence, and longevity. Estimate is net of taxes. The Fidelity Retiree Health Care Cost Estimate assumes individuals do not have employer-provided retiree health care coverage, but do qualify for the federal government’s insurance program, original Medicare. The calculation takes into account Medicare Part B base premiums and cost-sharing provisions (such as deductibles and coinsurance) associated with Medicare Part A and Part B (inpatient and outpatient medical insurance). It also considers Medicare Part D (prescription drug coverage) premiums and out-of-pocket costs, as well as certain services excluded by original Medicare. The estimate does not include other health-related expenses, such as over-the-counter medications, most dental services and long-term care.

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