5 ways to prepare now for health care costs in retirement

How much will health care cost in retirement? The answer is different for everyone. But a 2016 study by Fidelity Investments shows that a couple retiring today will need $260,000 to cover health care costs throughout retirement.*

Prepare early to afford health care when you retire

Use these tips to plan and save for your retirement goals:

• Learn about Medicare. It isn’t free and doesn’t cover everything. Plus, Medicare doesn’t limit how much you pay out of your own pocket each year. You can buy a plan to help cover the gaps in Medicare, but you’ll have to pay monthly premiums. Considering the average time spent in retirement is 18-20 years, these costs can add up.


• Know how much you'll get from Social Security. Only 61% of retired workers get about half their income from Social Security. It won't replace your pre-retirement income but can supplement your savings.


• Save more in your 401(k) each year. You can contribute up to $18,000 per year to your 401K. Also, make sure you are getting the full contribution match from your employer. By the time you reach age 60, you should have 8X your annual salary in savings for retirement.


• Open a Health Savings Account (HSA). The money you save now in your HSA can cover health care costs and premiums when you retire. With an HSA, you don't pay taxes on money you put in, your money earns tax-free interest and you can use the money to pay for qualifying medical expenses tax-free.


• Live healthy. Taking care of your health today by walking 30 minutes a day, 5 times a week, to help prevent serious, and costly, problems later on like heart disease, stroke and Type 2 diabetes.