For my European readers: If you think the US health care reform creates a system approaching anything in Europe, this Associated Press article might change your mind.
Relief to seniors facing high prescription drug costs is one of the first changes to come under the new health care overhaul. But ultimately that won’t offset the relentless increase in retirees’ medical expenses.
A couple retiring this year will need a quarter of a million dollars, on average, to cover medical expenses in retirement, according to a study to be released Thursday by Fidelity Investments.
The study is based on projections for a retiring couple of 65 years of age, covered by Medicare, but without subsidiary insurance from former employers. It assumes a life expectancy of 82 years for men and 85 for women.
I’m guessing that a significant percentage of the $250K comes from end-of-life care, which is where the valve opens and money pours out like water through a fire hose. However, further down the article I learned that the estimate does not include one of the biggest potential end-of-life expenses: long term care, such as living in a nursing home. For that, you need to tack on an additional $85,000.
Now you know why retirement frightens so many Americans.