Retirees will need $200,000 in savings just for health care

Following up on yesterday’s bad news about boomers’ lack of retirement savings is this, reported in the Boston Herald:

Retiringelderly couples will need $200,000 in savings just to pay for the mostbasic medical coverage during their golden years, according to newestimates by Boston’s Fidelity Investments.

    Thelatest figure is up 5.3 percent from last year’s $190,000 estimate.Cost estimates have been rising at an average 5.8 percent clip a yearsince 2002, Fidelity said.

    “Health-carecosts have the potential to significantly erode an individual’sretirement savings,” said Brad Kilmer, a vice president who oversaw thestudy at Fidelity.

    Thesurvey notes that fewer companies are offering health-care benefits forretirees – increasing the financial burden on the elderly after theystop working.

    The survey is based on the assumption that a couple 65 years old or older relies heavily on Medicare.

    Takinginto account premium costs, deductibles, pay-per-visits andsupplemental insurance, a couple’s health-care bills can run into bigbucks, Kilmer said.

    “This is the part of retirement people frequently forget,” he said.

    Mostof those retiring analyze their mortgage, food, car and other householdexpenses – and don’t realize how huge of a chunk their nest eggs willgo toward medical expenses, despite Medicare and other insuranceproducts, he said.

    Fidelity’sestimate for health-care costs for retired couples has jumped by$40,000 since it began tracking the expenses in 2002.