“Too many Americans think that once you are on Medicare everything is free, but that’s not the case.”
Hope Manion, Senior Vice President, Fidelity Workplace Consulting, as interviewed by Andrew Welsch, Barron’s, Here’s How Much You Can Expect to Spend on Healthcare in Retirement, May 17, 2022.
The Takeaway: For over 21 years, Fidelity has researched what a typical couple spends on medical costs throughout retirement. The correct answer is – “more than you may think.”
In fact, this year’s Fidelity survey found that the average couple’s medical costs over retirement total $315,000, up 5% from last year, proof that while Medicare may cover many expenses, it does not cover all. (Single retirees are expected to spend $150,000 for men and $165,000 for women over the course of their retirements).
Fidelity’s estimates do include Medicare premiums and other out-of-pocket costs, but specifically exclude any long-term care expenses, which would be additional.
Manion’s tips for covering medical costs include using a high deductible insurance plan while working, funding Health Savings Accounts (HSAs) each year for triple tax advantages, and making retirement catch-up contributions once you hit age 50.
“The best tool we have is to save early, save often, and save as much we can afford,” Manion told Barron’s.