Retiree Couples Need $225,000 for Health Costs

Business Week article:

U.S. Retiree Couples Need $225,000 for Health Costs

"Another report suggesting that Americans need to set aside a large chunk of cash to cover health costs during retirement was released by Boston-based Fidelity Investments.

It concluded that a couple (both partners age 65) retiring this year will need about $225,000 in savings to cover medical costs for the remainder of their lives, the Associated Press reported. That's an increase of 4.7 percent from Fidelity's $215,000 estimate for a couple retiring in 2007.

The Fidelity figure is based on the assumption that workers don't have employer-sponsored retiree health coverage. The figure includes Medicare premium payments, co-payments, and deductibles, as well as out-of-pocket prescription drug expenses.

"With health care costs continuing to outpace wage increases and companies trimming retiree health benefits, financing health care has to be central to retirement planning," Brad Kimler, executive vice president of Fidelity's benefits consulting group, said in a prepared statement, the AP reported.

Last month, the Center for Retirement Research at Boston College released a report that estimated a couple retiring this year would need about $206,000 for health care coverage."

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Musings:

How many retiring couples have this kind of money set aside for health care? Certainly not the 47 million Americans who have no health insurance. Not to mention the millions more who are underinsured.

I recently saw a segment on the TV show 60 Minutes about an American relief organization that airdrops doctors and medicine into the jungles of the Amazon. It's called Remote Area Medical or "RAM" for short. However this time, RAM set up a treatment facility not in a faraway jungle but in Knoxville, Tennessee. Over the course of one day RAM saw 920 patients, made 500 pairs of glasses, did 94 mammograms, extracted 1,066 teeth and did 567 fillings. 400 people were turned away.

I think this statement by Martin Luther King, Jr. says it well:

"A nation that continues year after year to spend more money on military defense than on programs of social uplift is approaching spiritual doom."