Retired couples’ care rises to $260,000

BOSTON — A new analysis from investment firm Fidelity, the Fidelity Retiree Health Care Cost Estimate, said a 65-year-old couple retiring in 2016 will need $260,000 to cover health care costs in retirement. That’s up 6 percent from last year and the highest estimate since the company began calculations in 2002, Fidelity said.

The amount was $220,000 in 2014 and $245,000 last year. It’s based on a life expectancy of 85 for men and 87 for women. Of the costs:

36 percent will go to monthly expenses associated with Medicare Part B and D premiums.

40 percent will go to Medicare cost-sharing provisions, including copayments, coinsurance and deductibles.

24 percent of the costs are associated with prescription drug out-of-pocket expenses, including copays and amounts not covered by Medicare Part D.

Also, Fidelity for the first time examined the costs associated with long-term care, which it says could affect seven in 10 Americans who reach 65 in the next five years. Fidelity estimates that a 65-year-old would need an additional $130,000 to insure against long-term care expenses. That assumes that the couple is in good health and buys a policy with an $8,000 maximum monthly benefit.

Adam Stavisky, senior vice president of Fidelity Benefits Consulting, said the increases can be attributed to increased use and rapidly increasing drug costs. Those costs are going up partly because the introduction of generic drugs has slowed, he said.