Despite the uncertain financial and economic environment last year, Americans continue to contribute to their IRAs, and those Americans who work with advisors are more likely to open, contribute, or consider an IRA, according to a new survey by Fidelity Investments and National Financial, Fidelity's clearing arm. The survey found that six out of 10 IRA owners (60%) either have already made a contribution to their IRA for 2007, or are planning to do so before the April 15 deadline. One-third (32%) of the respondents who are saving for retirement also increased the amount they're putting into their IRAs over the last 12 months, the survey found. The survey also found that 71% of Americans who work with an advisor own at least one IRA, compared to 41% of all Americans. Also, 74% of IRA owners who work with an advisor indicated they had taken some action over the last year to better prepare for retirement as compared to 62% of all IRA owners.
Meanwhile, Fidelity Investments' latest healthcare cost estimate, released in early March, has found that retiree healthcare costs continue to rise. A 65-year-old couple retiring in 2008 will need approximately $225,000 to cover medical costs in retirement, according to Fidelity. That is a 4.7% increase over the 2007 estimate of $215,000. Since the healthcare estimate was first calculated in 2002, the number has risen a total of 41%, with an average annual increase of 5.8%, Fidelity says. As in past years, the 2008 estimate assumes individuals do not have employer-sponsored retiree healthcare coverage and includes expenses associated with Medicare Part B and D premiums (30%), Medicare cost-sharing provisions–co-payments, co-insurance, deductibles, and excluded benefits (39%)–and prescription drug out-of-pocket costs (31%). It does not include other health-related expenses, such as over-the-counter medications, most dental services, and long-term care, Fidelity says.
