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Section 3
Medical Costs in Retirement
Many people planning for retirement realize that they will have
medical expenses, but few of them realize just how much it will
be and the effect it will have on retirement income. For many
retirees, medical costs will end up being one of the largest
expenses in retirement, rivaling housing and food. These rising
medical expenses can quickly cannibalize a typical retiree’s
fixed sources of income, leaving them more vulnerable to large,
unexpected expenses. This, of course, reduces the amount they
are able to spend on all other goods and services.
Retirees Underestimate Medical Expenses
46% of respondents estimated they would need
less than $100,000 for health care costs in retirement
33% of respondents admitted to not having any idea of
what their expenses could be in retirement
46% 46% 46%
Less than $10,000 $10,000 to <$50,000 $50,000 to <$100,000
Source: Fidelity Investments “Bridging The Gap To Medicare” research, 2018.
Chapter 2: You’ll Need More Money Than You Think
