Personal finance numbers are sometimes sobering. The financial services behemoth Fidelity recently came out with its latest estimate on how much 65-year-olds can expect to spend out-of-pocket on their medical care. Their coverage is through Medicare. The average 65-year-old woman should plan on needing $135,000 for health care expenses during her retirement; $125,000 for the comparable figure for a 65-year-old man. (The difference reflecting greater longevity among women.)

In other words, a 65-year-old couple retiring this year should have $260,000 in savings to meet their Medicare premiums and other medical costs. That’s up 18 percent from 2014 and doesn’t include long-term care.

Let me add one more set of figures into the mix. The typical American age 65 to 74 is worth $176,000, comprising $95,000 in financial assets and $81,000 in home equity. Taken altogether, these are sobering figures.

Don’t buy into the despair that often accompanies commentaries on an aging population and retirement. Numbers like these are why this column spends so much time advocating savings even if you’re only starting in your 50s and early 60s, working well into the traditional retirement years (usually part-time jobs and flexible work) and delaying Social Security benefits until age 70.

The financial returns from strategies like these are why most people will end up with a comfortable retirement. The Fidelity medical expense number is a reminder to take these strategies seriously.

Empty nesters have an opportunity to hike savings. Earning an income also lets older workers and senior entrepreneurs set aside even more, or the income can help pay for the medical expenses Medicare doesn’t cover.

Working longer makes it practical to hold off on Social Security. Your checks could be more than 75 percent larger if you wait to start filing at age 70 rather than at the earliest age, 62.

Here’s a simple illustration of the power of waiting on taking Social Security benefits on a portfolio: A two-income couple earning $100,000 a year looking to maintain their standard of living in retirement would need a portfolio of about $900,000 if they file for Social Security at age 62. However, if they wait to file until age 70 a portfolio of around $260,000 is enough.

Another factor is leaving a financial legacy to your children. There’s nothing wrong with reducing or eliminating that sum if you need the money. Your kids will be fine with the decision.


Chris Farrell is senior economics contributor, “Marketplace,” commentator, Minnesota Public Radio.