Retirement & Financial Planning Report

Image: Shawn Hempel/

Sometimes numbers are not what they seem to be. A recent example is the annual report from Fidelity Investments that tells us how much a 65 year old couple will have to pay for health related services over the next 30 years. That amount is $315,000.

Now, $315,000 seems like a lot of money when you look at it all at once. That’s why Fidelity’s report is picked up by a lot of the financial (and other) press. I bet $315,000 is way more than you earn in a year; probably more than what you and your spouse earn together. Holy Cow! $315,000 for health care – what’s this world coming to?


But it’s really not so frightening. The $315,000 is spread out over 30 years, so that’s $10,500 per year. And that number covers two people, so the annual per person cost for health care is $5,250. In a perfect world, would it be a lesser amount? Probably, but that’s not nearly as scary as $315,000. Think about it; which headline would want to make you read it the story? Retirees Health Care Costs Reach $315,000 or Retirees Pay $5,250 Per Year for Health Care.

Another example of things not being as bad as others would have you believe is Long-Term Care insurance. The federal LTC program, the Department of Health and Human Services (HHS), and the National Association of Insurance Commissioners (NAIC) tell us that 70% of those who turn 65 today will need some type of long-term care in their lifetime. Technically, the survey they are referencing says it’s 69%, but why quibble over one percent?

Here’s where we want to look at a quote attributed to Mark Twain. He said, “Facts are stubborn things, but statistics are pliable.” In a recent article on, several studies of LTC utilization (real and projected) are compared. Would you believe that the highest estimate of LTC utilization is the one that is used by both NAIC, HHS and FLTCIP? Of course it is, they want you to buy the insurance they are offering! All of the more recent (i.e., within the last 5 years) studies show a lower projected utilization rate. The phrase “some long-term care” is also not defined by a duration or time during which the care is being received. The very same survey that HHS, NAIC and FLTCIP cite shows likelihoods of 20% or less for any LTC needs that have a specified duration, even those of less than one year.

Don’t Panic. Don’t be scared by big numbers. It’s not as bad as it seems.

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