New Retirees' Estimated Health Costs Up 7.5 Percent from 2006

Fidelity Investments released its latest health care cost estimate March 27: A 65-year-old couple retiring in 2007 will need approximately $215,000 to cover medical costs in retirement, and this is up by 7.5 percent from the 2006 estimate of $200,000.

Fidelity, which manages numerous companies' 401(k) plans, is ending its own defined benefit pension plans and switching entirely to defined contribution 401(k)s, the Boston Globe reported yesterday. Fidelity is based in Framingham, Mass.

The company made its first health care cost estimate in 2002. Since then, the number has risen by 34 percent, with an average annual increase of 6.1 percent.

The 2007 estimate assumes individuals do not have employer-sponsored retiree health care coverage and includes expenses associated with Medicare Part B and D premiums, Fidelity said. The estimate also means that a 65-year-old worker today who is earning $60,000 and retires at the end of this year should expect that 50 percent of his or her pre-tax Social Security benefit will be spent on personal health care expenses in the next 16 to 18 years.

"A significant amount of retirees told us their state of health is not good, they are spending more in retirement than they ever planned, and some were even forced into an early retirement due to health problems," said Brad Kimler, senior vice president of Fidelity Employer Services Company. "But if today's workers act now to take greater advantage of the many retirement savings vehicles available to them, they can create a more secure and enjoyable retirement."

Download Center

HTML - No Current Item Deck
  • Free Safety Management Software Demo

    IndustrySafe Safety Management Software helps organizations to improve safety by providing a comprehensive toolset of software modules to help businesses identify trouble spots; reduce claims, lost days, OSHA fines; and more.

  • Comply with OSHA’s Electronic Recordkeeping Requirements

    Collect relevant incident data and generate accurate OSHA 300, 300A, and 301 regulatory reports, including 300A CSV files for easy electronic submission to OSHA.

  • Complete Online Safety Training Courses

    Deliver state-of-the art, online safety training courses to your organization with IndustrySafe Training Management Software. Generate reports to track training compliance and automatically notify learners of upcoming or overdue classes.

  • Easy to Use Safety Inspection App

    Conduct inspections on the go with IndustrySafe’s mobile app. Complete safety audits at job sites and remote locations—with or without web access.

  • Track Key Safety Performance Indicators

    IndustrySafe’s Dashboard Module allows organizations to easily track safety KPIs and metrics. Gain increased visibility into your business’ operations and safety data.

  • Industry Safe
comments powered by Disqus