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Retiring couple needs $220K to cover future health care costs: Fidelity


A 65-year-old couple retiring in 2014 without employer-provided retiree health insurance will need about $220,000 to pay future medical-related expenses, Fidelity Investments said in an analysis released Thursday.

That's unchanged from last year, with that stability in costs driven by a decrease in utilization of discretionary health care services, such as elective surgeries, and a provision in the 2010 federal health care reform law that has expanded Medicare coverage of brand-name prescription drugs once retirees' drug costs hit a certain level.

Still, while costs have remained stable, “The only real prescription to prepare financially for health care costs in retirement is to plan well in advance to optimize health and wealth,” Brad Kimler, Fidelity's executive vice president of benefits, said in a statement.

Of the $220,000 needed to cover a retired couple's health care expenses, Fidelity estimates that 32% will go toward paying Medicare Part B and Part D premiums, 45% will be needed for expenses not covered by Medicare and 23% will be spent on out-of-pocket prescription drug expenses, Boston-based Fidelity said.