Without post-employment benefits helping to cover the cost during retirement, a 65-year-old American couple will need about $240,000 to pay their medical expenses.
This estimate from Fidelity Investments is 4 percent higher than last year's, does not include any nursing-home care costs and was made assuming traditional Medicare insurance benefits. The estimate has grown by an average of 6 percent per year since 2002, so this increase is somewhat slower than typical.
One Fidelity executive noted that medical inflation is outpacing salary increases and cost-of-living adjustments for many workers, and is expected to continue rising in the future. In light of that, teachers must be certain that they account for the likelihood that costs will grow as they plan for retirement.
Account-based health plans, which are growing more popular with some school districts and employees, may be useful tools in helping to save, along with 401ks, IRAs and other tools. These can supplement a pension and any other post-employment benefits a worker may have, or substitute for them, depending on the circumstances.
