Retirement Healthcare Costs
On March 5th, Fidelity Investments [fidelity.com] released the results of the company’s study on the costs of retirement. The conclusion was that a 65-year-old couple retiring this year would need $225,000 to cover healthcare costs.
What makes this number even worse (it’s up 4.7% from last year) is that retirement savings have to go to more than just healthcare. Rising life expectancy also means that other costs, like food and housing, will require more savings in retirement as well. The study included costs for Medicare premiums, co-payments, deductibles, and prescription costs not covered by Medicare.
The good news is that not everyone will face such high costs. The study assumed that the couple did not have retiree health insurance from a former employer. Some people, particularly those who worked in the public sector, do have such benefits. The only other good piece of news is that this year’s increase (4.7%) is less than the average increase (5.8%) since the study began in 2002.
As part of the release, Executive Vice President of Fidelity Investments Brad Kimler said, “With health care costs continuing to outpace wage increases and companies trimming retiree health benefits, financing health care has to be central to retirement planning. Given current economic conditions, this is especially true for those planning to retire in the next few years or before they qualify for full Social Security or Medicare benefits.”
These latest results stress the importance of proper retirement planning. Gone are the days when fat pension checks and benefits for life were the norm. Taking personal responsibility for your retirement isn’t just a smart option; in many cases it’s the only option. If credit card debt is getting in the way of fully funding your retirement accounts, get rid of it quickly by consolidating with a person-to-person loan from Lending Club. Your ailing future self will certainly appreciate it.
Thursday, March 27th, 2008 at 6:13 am