Retirees need $250,000 for healthcare: Fidelity

BOSTON (Reuters) - A U.S. couple retiring this year will need about a quarter of a million dollars in savings to cover medical costs in retirement, Fidelity Investments said on Thursday.

The figure has been climbing steadily for years but might be pared modestly by the healthcare legislation signed into law by President Barack Obama this week, the financial services company said.

Fidelity's estimate is closely watched because it helps large companies design employee benefits programs. Each year Fidelity tries to predict how much a typical couple would need to set aside to pay for healthcare expenses after they retire, assuming they do not have employer-provided coverage in retirement but qualify for Medicare. Fidelity found that a couple retiring this year at age 65 would need $250,000 to pay for medical costs throughout their retirement, not including nursing-home care, up from $240,000 estimated in 2009.

Sunit Patel, a Fidelity senior vice president, said the total could be pared by just under 5 percent assuming the U.S. Senate passes plans by Democrats to close the so-called "doughnut hole" in current Medicare drug coverage. The annual estimate has been climbing since Fidelity first published it in 2002 -- a year when it estimated that the average couple would need $160,000 to pay for retiree health costs over their lifetime.

Increases since than reflect higher bills for visits to doctors and for testing, costs related to new medical technology, and general price inflation.

Separately, Fidelity said it found in a survey of married retirees that 47 percent said they are paying more each month for insurance and out-of-pocket healthcare costs than they had expected.

"In the past retirees relied on their former employers to provide healthcare coverage, but this is no longer something most of today's retirees have access to," Brad Kimler, another Fidelity executive, said in a statement.