You may think you are financially prepared for retirement, but have you considered your health-care costs?
Fidelity estimates a couple, both age 65 and retiring this year, can expect to spend an estimated $245,000 on health-care throughout retirement. That's an 11 percent increase from last year's estimate of $220,000.
Factors boosting this year's projection include longer life expectancies and anticipated annual increases for medical and prescription expenses. The estimate assumes the retirees are enrolled in Medicare but does not include the added expenses of nursing-home or long-term care.
Costs may vary significantly between men and women. Longer life expectancies and a compounding inflation rate will lead to females spending more on health care than males.
A 65-year-old woman who lives to 87, for example, can expect to spend $130,000 on health care, compared with $115,000 for a 65-year-old man who lives to 85, according to Fidelity. (Those are the average life expectancies for those who are 65 years old, according to estimates from the Social Security Administration.) The projected costs include Medicare Parts B and D, which cover routine medical and prescription costs, as well as a supplemental insurance policy.
How can you plan ahead for these costs?