Healthcare costs are frequently the largest expenses facing seniors, but new research shows they're on their way down. A Fidelity Investments report released earlier this week found that a 65-year-old couple retiring this year will need about $220,000 to cover healthcare expenditures, which is a modest decline from last year's figure of $240,000. The figures certainly represent a hefty sum, but analysts are encouraged by the downward trend.
Experts point to a number of reasons for the declining healthcare costs. For one, many brand-name medications have been released under more affordable generic brands. They also say that the number of younger retirees - mainly baby boomers who have just begun to turn 65 - tend to have lower medical costs that bring the average down. These results highlight the fact that healthcare expenses are some of the of the biggest retirement costs questions seniors may have.
"While lower, this year's estimate is still daunting for many retirees, and it will consume a considerable amount of a couple's retirement savings," said Brad Kimler, executive vice president of Fidelity's Benefits Consulting business. "It is extremely important that health care costs are factored into retirement savings strategies today so that retirees can be prepared to pay their medical bills throughout retirement."
The findings come as results of a separate study suggest that many older adults encounter a speed bump during retirement. Researchers from Ameriprise Financial found that 90 percent of retirees have experienced an unexpected life event that impacted their retirement savings.