Now that we expect health care will consume 20% of the GDP by 2017, here’s another big number you need to know: $225,000.

That’s the amount of money you personally will need banked, in cash, if you planned to retire today…to cover your health costs for the rest of the your life. Note that this number does not include long-term care.
You’ve been good: you’ve saved for your kids’ college educations, you’ve been paying off your home mortgage, and you’ve maxed out your 401(k). Oops! You forgot something that you weren’t aware you’d need 20-40 years ago when you started working: to save for health care in retirement.
Fidelity Investments has published its latest research into the sober subject of financing health in retirement. Since the estimate was first calculated in 2002, the number has risen a total of 41%, with an average annual increase of 5.8%. Here’s another segment of health care that’s rising faster than the general rate of inflation.
Health Populi’s Hot Points: This isn’t new-news, as the EBRI told us this back in 2005. However, it’s important to reinforce this message. Americans have to get real about what health care costs. More will come from out-of-pocket, especially if we don’t warm up to the idea of liquidating our worldly goods and enrolling in Medicaid. EBRI reports that the majority of workers who have not put money aside for retirement have little in savings at all: 7 in 10 of these workers say their assets total less than $10,000. Mind the gap!

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