The real cost of health in retirement: Calculating the unknowable

In contrast, research by Prudential Financial and the Center for Retirement Research at Boston College showed the projected health costs of an uninsured married couple age 65 to be approximately $197,000. This figure includes insurance premiums, out-of-pocket expenses and home health care costs. With nursing-home care costs, the figure rises to $260,000.

Skeptic Michael Zwecher, author of “Retirement Portfolios: Theory, Construction, and Management,” claims that Fidelity’s $250,000 figure, as a statistical average, does not accurately represent the medical costs of the vast majority of retirees. As Zwecher sees it, one’s options are either to save enough money to pay for a worst-case scenario ($807,000 according to one research firm) or to purchase long term care insurance. Because retirees face such uncertainty with regard to the future costs of medical care, insurance may be the best bet.