According to Fidelity Investments’ 22nd annual Retiree Health Care Cost Estimate, a 65-year-old retiring this year may plan to spend an average of $157,500 on healthcare and medical expenses during the course of retirement.
Health care expenses in retirement may be among the highest, claims Hope Manion, senior vice president and chief actuary at Fidelity Workplace Consulting.
Fidelity’s Methodology And Projection
To assist Americans in preparing, we compute this estimate, says Manion to FOX Business.
While this sum may sound intimidating, with careful planning and continuous saving, you can be far better prepared to retire when and how you choose.
According to the business, Fidelity’s 2023 forecast is unchanged from last year’s as a result of anticipated limits on retiree out-of-pocket expenses for prescription medicines beginning in 2025.
According to Fidelity, this is the first time in nearly ten years that the expected health care costs for retirees have remained constant from year to year.
According to a press release, the projection is based on seniors being registered in traditional Medicare, which between Medicare Part A and Part B includes costs for hospital stays, doctor visits and services, physical therapy, lab testing, and more, as well as in Medicare Part D, which covers prescription medicines.
Manion claims that Fidelity’s projection is mostly driven by three factors: premiums, copayments and deductibles for doctor visits, and out-of-pocket expenses for prescription medicines.
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Enhancing Medical Expense Management
An HSA, or health savings account, is a type of tax-advantaged savings account that can be used to pay for certain medical costs.
It’s vital to keep in mind, though, that you must be enrolled in a high-deductible health plan in order to make contributions to an HSA.
Manion mentions that Fidelity’s study revealed that HSA owners feel better equipped to pay for medical bills.
That’s not surprising given that HSAs are one of the most tax-efficient ways to save.
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