The Increasing Cost of Healthcare Upon Retirement

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The Increasing Cost of Health Care upon Retirement

(printable pdf)

A 65-year-old couple retiring this year is estimated to need $240,000 to cover medical expenses throughout retirement, according to the 2012 Fidelity retiree health care cost estimate.1 This represents a 4% increase from last year, when the estimate was $230,000. The estimate does not include any costs associated with nursing home care and applies to retirees with traditional Medicare insurance coverage.

The following three infographics detail:

  1. Fidelity's retiree health care cost estimate since 2002
  2. Estimates on how retirees will spend health care dollars
  3. Percentage of annual Social Security benefits estimated to be spent on health care

Fidelity Health Care 

1 The estimate assumes no employer-provided retiree health care coverage and life expectancies of 17 years for men and 20 years for women.


As in years past, the Fidelity retiree health care cost estimate assumes that individuals do not have employer-provided retiree health care coverage, but do qualify for the federal government's insurance program Medicare. The calculation takes into account cost-sharing provisions (such as deductibles and coinsurance) associated with Medicare Part A and Part B (inpatient and outpatient medical insurance). It also considers Medicare Part D (prescription drug coverage) premiums and out-of-pocket costs, as well as certain services excluded by Medicare. The estimate does not include other health-related expenses, such as over-the-counter medications, most dental services, and long-term care.

For plan sponsor and institutional use only.

Fidelity Brokerage Services LLC, Member NYSE, SIPC 900 Salem Street, Smithfield, RI 02917