Jan 12th, 2013 | By | Category: Senior Finances

Baby Boomers Plan for Health Care Costs in Retirement

Various investment and financial institutions provide assistance to Baby Boomers planning for retirement and the attendant costs. Health care is one of the biggies.  So the question is: How much do I need to plan to spend on health care in retirement?

Fidelity (Boston) offers an annual update on such information, and this year they say the cost for health care in retirement is $230k.  This is out-of-pocket cost, on top of what Medicare pays.  And it does not include long term care costs.  It does include deductibles, copays, premiums for optional coverage (doctor visits and medications), out-of-pocket expenses for medications, hearing aids, eyeglasses, etc.

Help Estimating Health Care Costs

Baby Boomers concerned about health care costs need first to look at their retirement income and expense projections over all.  There are a gazillion tools on the Internet to help this process.  Probably the most helpful information coming from Fidelity about this issue is their Fidelity Income Strategy EvaluatorSM.  This tool offers Baby Boomers help with

  • An estimation of monthly income based on the tool’s assumptions
  • A suggested Target Income Mix — a hypothetical combination of income sources that is intended to help investors meet income needs in retirement
  • An idea of how your portfolio may perform during market ups and downs
  • A printable report with clear investing next steps that you can use as a starting point when speaking with a representative about turning your retirement savings into retirement income (

Once this information is available, pre-seniors can then sit down and calculate projections for their expenses in retirement, including health care costs.  Financial advisers are always a good bet for assistance with such projections.

Financial planning for retirement cannot be ignored.  Such planning needs to include health care costs, and making use of Internet resources makes the task easier.  Share this information with your Baby Boomer loved ones.  They will thank you.


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