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Fidelity Investments regularly conducts research to learn how much savings a typical retired couple without any form of employer-sponsored retirement health insurance might need to pay for their out-of-pocket lifetime health care expenses. These expenses included things like Medicare premiums and co-pays, but did not include long-term care. The estimated amount was over $280,000 in today’s dollars.

Match this amount needed just for health care expenses against the average total 401k savings of only $192,800 for those between the ages of 60 and 69.

In order to save the $280,000 Fidelity says will need in a 401(k) growing at an average rate of six percent per year, a person 15 years from retirement would need to contribute more than $11,200 annually.  An amount that is much higher than the 401k contributions the average person is making today.

No doubt these participants are assuming that their 401k contributions will provide them with future retirement income. They will, but instead of using that income to pay for food, shelter, golf and gifts for the grandkids, these people will need it all and more just to pay the estimated cost of their health care.

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