Fidelity Investments has released a report estimating that a 65-year-old couple retiring in 2008 would need approximately $225,000 to cover their medical costs in retirement, a 4.7 percent increase over the 2007 estimate of $215,000.

Fidelity has been calculating retiree health care cost estimates annually since 2002. The number has risen a total of 41 percent since that time, with an average annual increase of 5.8 percent.

The 2008 estimate assumes that individuals do not have employer-sponsored retiree health care coverage. The estimate includes expenses associated with Medicare Part B and D premiums, Medicare cost-sharing provisions such as co-payments and deductibles, and out-of-pocket costs for prescription drugs. It does not include other health-related expenses, such as over-the-counter medications, most dental services and long-term care.

Fidelity recommends that working Americans create individual retirement plans, maximize opportunities to save early through vehicles such as health savings accounts, assess their own current health situation to plan for future medical expenses, determine the details of their employer-sponsored health coverage, and understand the financial impact of health care costs on Social Security income.

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