You can’t make sound financial plans for your retirement unless you have a realistic understanding of the costs.
How much do you think a 65-year-old couple retiring this year, both enrolled in Medicare, will spend for healthcare throughout their retirement?
Most people said it’s about $41,000, according to a new survey by Fidelity Investments. The real number, the company said, is about seven times more – or $315,000.
Hope Manion, a senior vice president at Fidelity Investments, calls that quite a disconnect.
“People wait to retire until they’re eligible for Medicare and then they think that Medicare is going to cover everything,” Manion said. “But the reality is you still have to pay premiums to even participate in Medicare. And then when you are participating, there are still co-insurances and copayments, as well as things that Medicare just doesn’t cover like hearing aids. And finally, prescription drug out-of-pocket costs [are] also something that are included in our estimate.”
The takeaway here: by planning early and saving consistently, you can put yourself in a much better position to afford your retirement years.
