Retiree health-care costs may be more than you think

Senior couple looking concerned with paperwork and computer
Image Source | Getty Images

Even with Medicare coverage, health-care costs are a major expense in retirement that can derail any financial plan if they're not factored in.

These costs are also hard to estimate because they depend on a person's health and longevity. Who wants to calculate when they are going to die?

Fortunately, or unfortunately depending on your retirement savings and fear of mortality, HealthView Services has crunched the numbers for a fit 65-year-old couple retiring this year and come up with an estimate of projected health-care expenses. The company, which helps financial advisors forecast health-care costs for their clients, used data from more than 50 million actual health cases to formulate its estimates. And the figure it came up with is more than most people have saved for retirement.

The average lifetime retirement health-care premium costs for the hypothetical couple is $266,589, which included Medicare parts B and D coverage as well as supplemental insurance, according to HealthView's latest report. (The estimate assumes a life expectancy of 87 years for men, and 89 for women.)

The costs are 6.5 percent more than HealthView's estimate last year and over $40,000 more than the retiree health-care cost estimate of $220,000 produced by Fidelity, which is widely used by financial advisors as a benchmark for such expenses.

Read MoreDo you REALLY need $2.5M for retirement?

What's more daunting is a quarter of a million dollars only pays for basic coverage for this hypothetical, healthy 65-year-old couple. If you include dental, vision, co-pays and other out-of-pocket costs, the average cost estimate rises to $394,954. And for a healthy couple of 55-year-olds who plan to retire a decade from the now, retiree health-care costs beyond basic coverage are projected to be a whopping $463,849.

The sticker shock really sets in when you realize that these estimates don't include the cost of long-term care insurance.

"Most people don't plan for the cost of routine medical costs in retirement," said Katy Votava, president of Goodcare.com, a consulting firm that advises business and consumers about health-care financing. She recommends investors take advantage of Roth IRAs and health savings accounts to prepare for hefty health-care bills in retirement.

Medicare surcharges will increase retiree health-care costs for more people in the future, said Ron Mastrogiovanni, president and CEO of HealthView Services.

The surcharge is a means test for Medicare parts B and D. An individual with an adjusted gross income plus tax-exempt interest of more than $85,000 (or $170,000 if married and filing jointly) qualifies for the surcharge. "You are paying more for the same service," Mastrogiovanni said.

Read MoreCould these fixes close retirement savings gap?

Since the surcharge triggers are not indexed to inflation, the income-based Medicare surcharges are expected to spread to 25 percent of all Medicare subscribers by 2036, according to the Kaiser Family Foundation.

Given those trends, advisors say it's wise to start planning for your retiree health-care costs now—regardless of your age.