Retired couples may need $240,000 for health care

Steve williams

Site Founder, Site Owner, Administrator
This is a sobering piece of news.......


MARK JEWELL, AP



BOSTON — Couples retiring this year can expect their medical bills throughout retirement to cost 4 percent more than those who retired a year ago, according to an annual projection released Wednesday by Fidelity Investments.

The estimated $240,000 that a newly retired couple will need to cover health care expenses reflects the typical pattern of projected annual increases. The Boston-based company cut the estimate for the first time last year, citing President Barack Obama's health care overhaul. Medicare changes resulting from that plan are expected to gradually reduce many seniors' out-of-pocket expenses for prescription drugs.

But Fidelity says overall health care cost trends are on the rise again, so it's raising its cost estimate from last year's $230,000 figure.

"As long as health care cost trends exceed personal income growth and economic growth, health care will still be a growing burden for the country as a whole and for individuals," says Sunit Patel, a senior vice president for benefits consulting at Fidelity, and an actuary who helped calculate the estimate.

However, this year's 4 percent rise is relatively modest. Annual increases have averaged 6 percent since Fidelity made its initial $160,000 calculation in 2002.

The projections are part of Fidelity's benefits consulting business. The study is based on projections for a 65-year-old couple retiring this year with Medicare coverage. The estimate factors in the federal program's premiums, co-payments and deductibles, as well as out-of-pocket prescription costs. The study assumes the couple does not have insurance from their former employers, and a life expectancy of 85 for women and 82 for men. The estimate doesn't factor in most dental services, or long-term care, such as the cost of living in a nursing home.

This year's estimate could change significantly. Next month, the U.S. Supreme Court will decide whether to strike down part or all of the 2010 health care law, including its centerpiece requirement that nearly all Americans carry insurance or pay a penalty.

If the ruling requires significant changes, Fidelity may update its estimate, Patel said.

Although its focus is expanding health care access to people under age 65, the law also is intended to benefit many retirees by gradually closing what's known as the `doughnut hole' coverage gap in the Medicare drug benefit.

But longer-term, retirees' cost savings aren't expected to offset other factors driving expenses up, such as new medical technologies, greater use of health care services, and more diagnostic tests.

Fidelity's findings illustrate the importance of factoring in health care alongside housing, food and other expenses in retirement planning. If medical costs continue to rise faster than personal incomes, many retirees will have to adjust their household budgets so they can cover medical costs, Patel says.

"It's a fixed liability for the majority of folks, and it doesn't vary up or down like food or clothing costs can," he says.
 
I read the other day that Medicare does not cover preventive colonoscopies? How incredibly sad.
 
That sucks. Except, ours sucks even more.
 
I'm thankful I live where I do.
 
I read the other day that Medicare does not cover preventive colonoscopies? How incredibly sad.

Anecdotally medicare has been gutted. Tax cuts have been mostly a shell game. When the music stops someone will be left without chair.
 
The entire cost structure "fee for service" model is broken and abused to the detriment of the paying patients either out of pocket or via higher insurance premiums. Hospital expenses seem to eclipse those of the physician/surgeon fee who is doing the actual operation on the patient...and let's not forget the outrageous pharmaceutical costs....patents that run too long and continue to get more expensive every year long after R&D costs have been recovered and reasonable (monopolistic) profits have been made. Something has got to give.
 
Here in Canada we don't have any plans for the mentally unstable! ...Very sad. :(

* And I just looked at the news from Los Angeles yesterday,
where six (6) police officers beat to death a mentally disabled person! :eek:
{It's all over the news with the video showing; totally devastating!}
 
Here in Canada we don't have any plans for the mentally unstable! ...Very sad. :(

Canada's healthcare system is pretty inclusive, so I'd love to know what you mean by this.
 
Over the averaged 20 years, that is 500 dollars per person per month. Most people have greatest medical expense in the last year or two of their life. Most people still do not go into nursing homes. If they do, it is usually a short time before hospice.

One thing is that the figure includes "future dollars" which are less valuable in the future due to inflation. The "present dollar" figure in an earning account is probably less. Present retirement assets, if they exist, can continue to earn until the "future" less valuable dollars are due. If you live longer than the speculative 85, then you will need more.

On the other hand, it is also a median figure. Half the population will need more, some much, much more.

I figure for a couple, 300K in an invested medical account used for only medical purpose, to pay premiums and out of pocket medical as time rolled on, would do the trick, but who knows.
 
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Canada's healthcare system is pretty inclusive, so I'd love to know what you mean by this.

John, it was recently in the news.
...Canada is trying to put a plan in place to help the people dealing with suicide and depression.

As of right now we don't have anything in place for support (financial and planified help from professionals).
No budget, no money! ...No real care for these people, unlike in Australia and some European countries.

* And it takes at least ten years for a good plan to start being effective.
 
John, it was recently in the news.
...Canada is trying to put a plan in place to help the people dealing with suicide and depression.

As of right now we don't have anything in place for support (financial and planified help from professionals).
No budget, no money! ...No real care for these people, unlike in Australia and some European countries.

* And it takes at least ten years for a good plan to start being effective.

Thanks for the clarification Bob! And I did read that...we need to do more for sure.

However, we aren't talking about exceptions here. In that regard I think Canada can hold it's head high in terms of what the system provides.
 
...And just look too at the Canadian army people dealing with post dramatic stress syndrome!
...Trauma from the war!

They talked about it every single day, in particular this last week!

People who are depressed, or want to kill themselves; have nowhere to go! ...But die!

I ain't inventing this, it's right in front of our faces! Do you keep track with the news John?
 
...And just look too at the Canadian army people dealing with post dramatic stress syndrome!
...Trauma from the war!

They talked about it every single day, in particular this last week!

People who are depressed, or want to kill themselves; have nowhere to go! ...But die!

I ain't inventing this, it's right in front of our faces! Do you keep track with the news John?

Yes I keep track of the news Bob! These are serious issues and need to be addressed, but quite frankly you're veering this thread off course with your observations. Do you not see that?
 
Do you remember that young soldier who commited suicide about two years ago (less)?
It took eighteen months for the army to send the suicide letter to his family!!!

And that young soldier who is speaking up, and the army with a ban (warning) for speaking up!
...It takes six months or more for a Canadian soldier sufferring of 'war trauma' before he can even see a doctor!!!

EDIT: Yeah, it's not the $240,000 that we don't have for the USA health care system,
but I am human, and I am greatly sensitive, and also extremely influenced by it!
...So I just had to share it too. ...Some' wrong with that?
 

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