Everything: Here’s How Much Retirees Are Paying for Health Care - By Aimee Picchi

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It may come as a surprise to some younger Americans that health care isn’t exactly free for retirees on Medicare, but the sticker shock may be downright alarming.

An average 65-year-old couple who retires this year will face out-of-pocket health-care costs of $245,000 in their golden years, a jump of 29 percent since 2005, according to a new study from Fidelity Investments. The surge in expected expenditures is due to longer life spans and the rising costs of prescriptions and medical care.
The bottom line, Fidelity says, is that younger Americans need to be saving now to cover their health-care costs when they turn 65, in addition to paying for the basics such as food and housing. Given that three-quarters of pre-retirement Baby Boomers aren’t aware that Americans covered by Medicare pay a monthly premium and have deductibles and co-pays, it’s no wonder that a majority isn’t considering health-care costs into their retirement planning.
Only one out of five couples polled by Fidelity said they are factoring health-care costs into what they need to save for their retirement.

Fidelity’s estimate may actually be on the conservative side, given a forecast earlier this year from retirement-services company Healthview Services that a couple retiring this year will encounter health-care costs of almost $267,000.
Adding to retirees’ pain is the fact that health-care costs are rising at a much faster rate than Social Security’s cost-of-living adjustments, which means older Americans will likely need to devote larger portions of their Social Security payments to cover their health-care costs, according to Healthview. That will place “incredible stress” on retirees’ budgets, the group said.
So how can Americans prepare? Fidelity, which is in the business of managing money, naturally has a few suggestions relating to opening new accounts, such as a health savings account, which can be rolled over into subsequent calendar years to cover medical expenses.

Culled from Fiscal Times