There is a persistent myth that healthcare is magically free after you’ve retired, partly thanks to Medicare. Ask any retiree with a health condition, and I assure you their medical care is not free. The estimated healthcare expenses in retirement may cause you to worry about running out of money. Hopefully, those high costs will encourage you to make healthier choices now.
The higher your income, the higher your premiums will be for Medicare. How much your household spends on medical expenses will ultimately depend on your health.
A new study from Fidelity revealed the average 65-year-old couple retiring this year will need about $315,000 to cover healthcare costs. According to the report, “The estimate assumes retirees are enrolled in traditional Medicare, which between Medicare Part A and Part B covers expenses such as hospital stays, doctor visits and services, physical therapy, lab tests and more, and in Medicare Part D, which covers prescription drugs.”
I must point out that $315,000 is more than many households have saved for retirement. For singles, the retirement healthcare expenses are half that figure at $157,500. Remember, long-term care expenses are not included in that total. Ouch.