Retirement Woes May Be Exaggerated

...and that is the absence of planning for health care in retirement. Many advisors / planners do not plan for this and if they do, it is not accurate.

For example, Fidelity combined with EBRI to say a couple retiring today needs about $230,000 to invest. That number can be correct if you are entirely healthy throughout your entire life, don't want full coverage, live in a state that has below average health care costs, and have a solid r.o.r. before and during retirement.

That's a lot of factors. But let's look at something much more accurate provided by HealthView Services ( www.hvsfinancial.com ):

Married couple. Both age 60. Retire at 65. Live to 90. Healthy. Collectively earn less $170k . Live in Ohio (national average costs). Want full coverage.

This couple can expect to pay roughly $704,000 out of their own pocket, which is an average of roughly $2,350 per month.

If this couple gets 6% before retirement and 3% in retirement, then they have to contribute $333,100!

That is $100,000 more than Fidelity's number!

Think the woes are exaggerated?

Mike of MA 2:36PM July 20, 2011