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Health Care Costs Concern For Retirees

The burden on health care costs in retirement could be a significant hurdle for retirees without a sizable nest egg or effective strategy to cover such expenses. According to the Fidelity Retiree Health Care Cost Estimate, an average retired couple aged 65 in 2022 needed around $315,000 after taxes to cover their health care expenses in retirement. Though traditional retirement goals like financing travel or relocating to a warmer climate are worthy pursuits, it’s vital that individuals of all ages, including those on the cusp of retirement, recognize the importance of saving for health care expenses as well. Such expenses, which include medication costs, are easy to take for granted when individuals are still working. However, Fidelity notes that generics, branded drugs and specialty drugs account for roughly 17 percent of retirement health care expenses. That equates to around $53,500 that might be needed to pay for medication alone.