Retirees know they are facing rising health care costs. Exactly how much they will have to spend is a question, but a recent Fidelity Investments study hones in on an average figure: $240,000.

For the average 65-year-old married couple retiring in 2012, the health care costs they will face are expected to be at least that much, not counting long-term care, over the counter medications and most dental costs. 

The cost is up 4% over last year and has increased an average of 6% annually since Fidelity’s initial calculation in 2002. In 2011, however, the estimate declined $20,000 due to a one-time adjustment driven by Medicare changes that reduced out-of-pocket expenses for seniors. 

“Today’s workers must understand that the cost of health care is expected to continue rising significantly in future years,” said Brad Kimler, executive vice president of Fidelity’s Benefits Consulting business. “Medical inflation is outpacing salary increases and cost of living adjustments for many people. Until that situation changes, it is critical that individuals include health care costs in their retirement savings strategies today so they can be prepared to pay their medical bills throughout retirement,” he said.

Those relying on Social Security should manage their expectations, Fidelity advises, as the allocation of Social Security benefits going to medical expenses is likely to nearly double over the next 15 years to more than 60% of the average annual Social Security payment. 

“Retirees relying entirely on Social Security to fund their health care costs will be faced with difficult challenges in the future,” said Kimler. “Today’s workers should plan to supplement their retirement income to cover their medical expenses. It is never too late to begin utilizing all retirement savings vehicles available, including any 401(k) accounts, IRAs and Health Savings Accounts, to help build a more secure retirement.”

Written by Elizabeth Ecker