Better take a seat first.
Retirement health costs are so high you might feel faint when you hear what you’re likely to pay.
Almost half of retirees estimate they’ll need only $50,000 for health care expenses in retirement.
However, according to annual research by Fidelity Investments, a 65-year-old couple retiring this year will need an average of $220,000 to cover medical expenses throughout their retirement.
How do they come up with that number? The $220,000 estimate includes over-the-counter drugs, dental, medical premiums, and out-of-pocket costs, but excludes any potential long-term or nursing home care.
It all adds up to a big bill. “For many Americans,” says Fidelity, “health care is likely to be one of their largest expenses in retirement.”
There are ways to control these costs. One of the best ways is to delay retirement. Retiring at age 65, instead of 62, can cut over $50,000 from your medical bill. Delaying retirement to 67 could save you an additional $20,000.
The secret? Be a smart consumer. Take advantage of health savings accounts, and understand your options for health insurance, including Medicare and supplemental plans, in retirement.