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

  • Safety Metrics Guide

    Is your company leveraging its safety data and analytics to maintain a safe workplace? With so much data available, where do you start? This downloadable guide will give you insight on helpful key performance indicators (KPIs) you should track for your safety program.

  • Job Hazard Analysis Guide

    This guide includes details on how to conduct a thorough Job Hazard Analysis, and it's based directly on an OSHA publication for conducting JHAs. Learn how to identify potential hazards associated with each task of a job and set controls to mitigate hazard risks.

  • A Guide to Practicing “New Safety”

    Learn from safety professionals from around the world as they share their perspectives on various “new views” of safety, including Safety Differently, Safety-II, No Safety, Human and Organizational Performance (HOP), Resilience Engineering, and more in this helpful guide.

  • Lone Worker Safety Guide

    As organizations digitalize and remote operations become more commonplace, the number of lone workers is on the rise. These employees are at increased risk for unaddressed workplace accidents or emergencies. This guide was created to help employers better understand common lone worker risks and solutions for lone worker risk mitigation and incident prevention.

  • EHS Software Buyer's Guide

    Learn the keys to staying organized, staying sharp, and staying one step ahead on all things safety. This buyer’s guide is designed for you to use in your search for the safety management solution that best suits your company’s needs.

  • Vector Solutions

Featured Whitepaper

OH&S Digital Edition

  • OHS Magazine Digital Edition - May 2022

    May 2022

    Featuring:

    • WEARABLE TECHNOLOGY
      How Wearable Technology is Transforming Safety and the Industrial Workplace
    • TRAINING: CONFINED SPACES
      Five Tips to Improve Safety in Confined Spaces
    • INDUSTRIAL HYGIENE
      Monitor for Asbestos to Help Save Lives
    • PPE: FALL PROTECTION
      Fall Protection Can Be Surprising
    View This Issue