Save a large amount. A 65-year-old couple retiring in 2013 is estimated to need $220,000 to pay for health care expenses throughout retirement, including typical out-of-pockets costs associated with Medicare Parts A, B and D, according to a Fidelity Investments estimate. "You need $220,000, after tax, in a bank account or some sort of savings vehicle," says Sunit Patel, a senior vice president at Fidelity. The Employee Benefit Research Institute calculated that a 65-year-old couple with median prescription drug expenses would need $227,000 to have a 75 percent chance of being able to pay all their retirement medical bills, and $283,000 to have a 90 percent chance.
People who don't have a large enough nest egg to set aside a quarter of a million dollars specifically for retirement health care expenses are likely to spend a growing portion of their Social Security checks on medical bills. "The Medicare premium portions are deducted from your Social Security check," says Dallas Salisbury, president of the Employee Benefit Research Institute. "For the low- and moderate-income person, that can now be a very significant portion of your Social Security check."