Couples who choose to retire early at 62 rather than waiting until 65 may hope to enjoy a few extra years out of the work force, but the reality is they could also face more than $50,000 in additional medical bills, according to a report by Fidelity Investments.
That’s because they will have to pay health insurance premiums and out-of-pocket costs for the three years before they become eligible for Medicare, which Fidelity estimates would cost about $17,000 a year.
At the same time, for couples who are able and willing to delay retirement until 67, the potential annual cost reduction could be $10,000 a year, Fidelity noted.
“Rising health care expenses are forcing people to make educated decisions now more than ever, ranging from the services they utilize to the age at which they choose to retire,” said Brad Kimler, executive vice president of Fidelity’s Benefits Consulting business. “So it’s critical that people plan well in advance for the considerable cost of health care by adding it into their overall retirement planning discussions.”
A recent Fidelity study of more than 1,000 adults ages 55 to 70 found that pre-retirees planned to retire at an average age of 65.
Fidelity’s 2014 Retiree Health Care Cost Estimate showed that even those who retire at that age can expect to incur $220,000 in medical costs during their retirement years.