Plan for rising health care costs. ...............
With longer life spans, medical costs that are rising faster than general inflation, declining retiree medical coverage by private employers, and possible funding shortfalls ahead for Medicare and Medicaid, managing health care costs can be a critical challenge for retirees.
According to Fidelity’s annual Retiree Health Care Costs Estimate, a 65-year-old couple retiring in 2010 will need more than $250,000 to cover health care costs during their retirement—or roughly $6,250 per person per year.1 And that is just using life expectancy data—many people will live longer and have higher costs. Since Fidelity started the annual estimate in 2002, estimated costs have risen by 56%.
That cost doesn’t include possible long term care (LTC) expenses. About 70% of those over age 65 will require some type of LTC services—either at home, or else, in adult day care, an assisted living facility, or a traditional nursing home.2 The average private-pay cost of a nursing home is about $70,000 per year and exceeds $100,000 in some states. Assisted living facilities average $34,000 per year. Hourly home care agency rates average $46 for a Medicare-certified home health aide and $19 for a licensed non-Medicare-certified home health aide.3
Consider earmarking a portion of savings for health care and purchasing long term care insurance. The cost is based on age, so the earlier you purchase a policy, the lower the annual premiums. |
