Why Delaying Retirement Might Be Your Best Strategy

It may seem like an impossible destination, but the day will probably come when you reach retirement. Many Americans look forward to retiring as soon as possible after working and saving for decades. However, staying in the workforce just a few extra years may help couples save tens of thousands of dollars in medical costs.

Couples retiring at age 65 are expected to incur $220,000 in healthcare expenses on average during their golden years, according to a new analysis by Fidelity Investments. That estimate includes Medicare Part D premiums and out-of-pocket costs, as well as certain services excluded by Medicare, but it does not include expenses like long-term care or dental services. While that is a large estimate facing retirees, the news is worse for those retiring before receiving Medicare coverage.

On average, respondents in the Fidelity survey said they retired at 62, often by choice and before Medicare coverage at 65. These couples can anticipate an additional cost of $51,000, or roughly $17,000 per year in the three years leading up to 65. This is due to expensive health insurance premiums and out-of-pocket costs. In contrast, waiting until 67 to retire could save couples $10,000 per year.