(Bloomberg) -- In a perfect world, thelargest expenses in retirement would be for funthings like travel and entertainment. In the real world, retiree health care costs can take anunconscionably big bite out of savings. A 65-year-oldcouple retiring this year will need $275,000 to cover healthcare costs throughout retirement, Fidelity Investments said in itsannual cost estimate, out this morning. That stunning number isabout 6 percent higher than it was last year. Costs would beabout half that amount for a single person, though women would paya bit more than men since they live longer.You might think thatnumber looks high. At 65, you’re eligible for Medicare, after all.But monthly Medicare premiums for Part B (which coversdoctor’s visits, surgeries, and more) and Part D (drugcoverage) make up 35 percent of Fidelity’s estimate. The other 65percent is the cost-sharing, in and out of Medicare, in co-paymentsand deductibles, as well as out-of-pocket payments forprescription drugs.

And that doesn’t include dental care — or nursing-home andlong-term care costs.

Retirees can buy supplemental, or Medigap, insurance to coversome of the things Medicare doesn’t, but those premiums wouldlead back to the same basic estimate, said Adam Stavisky, seniorvice president for Fidelity Benefits Consulting.The 6 percent jumpin Fidelity’s estimate mirrors the average annual 5.5 percentinflation rate for medical care that HealthView Services,which makes health care cost projection software, estimates for thenext decade. A recent report from the company drilled intowhich health care costs will grow the fastest.

It estimates a long-term inflation rate of 7.2 percent forMedigap premiums and 8 percent for Medicare Part D. Forout-of-pocket costs, the company estimates inflation rates of3.7 percent for prescription drugs, 5 percent in dental,hearing, and vision services, 3 percent forhospitals, and 3.4 percent for doctor’s visits andtests.

Cost-of-living-adjustments on Social Security payments,meanwhile, are expected to grow by 2.6 percent, according to theHealthView Services report.

What’s really sobering is the impact of inflation on Fidelity’sretiree health care cost estimates over the years. From 2002, whenFidelity first did an estimate, to its latest projection, thenumber is up 70 percent.

“It’s the power of compounding,” Stavisky said. “It’s great forinvesting and brutal for health care costs.”

In its 2017 statement, Fidelity brings up a fairly hottopic in health care circles—health savings accounts, or HSAs—as a wayemployers are helping workers manage costs. (Others might describethe plans as shifting more of the rapidly rising costs of healthcare onto employees.) HSAs are tax-advantaged accounts to whichemployees can contribute a certain amount of pre-taxdollars each year to use for medical costs. Employers usuallykick in some money, too. The 2017 contribution limit for singles is$3,400, and $6,750 for a person with a family. HSAs usually accompany high-deductible healthplans, which are becoming far more common. (For a good comparisonof health care savings account providers, see Morningstar’s 2017Health Savings Account Landscape.) In return for low premiums,employees have high deductibles to cover before insurance kicksin. In 2017, annual deductibles are at least $1,300 for asingle person, with a maximum out-of-pocket expense of $6,550. Fora family, the minimum deductible is $2,600, with an out-of-pocketcap of $13,100.

Part of the logic behind HSAs is that employees will be betterhealth care consumers under such plans. And they might, ifbeing an informed, effective consumer weren’t extremelydifficult and time-consuming in the murky world of American healthcare pricing.

On the bright side, financial planners love that HSAsare “triple tax-advantaged.” Money goes in pre-tax,earnings on that money aren’t taxed, and the money can beused, without being taxed, for qualified medical expenses. Ifpeople have the means to pay for health care costs out ofpocket and leave the HSA money growing tax-free, it can be anothertax-advantaged way to save for retirement. Health care costs willlikely keep climbing, so one of the best investments anyonecan make is to work at staying healthy, if possible. For asense of how much health care could cost you in retirement, and howstaying healthy can lower those costs, try AARP’s health carecosts calculator. It provides a rough cost estimatebased on your height, weight, gender, and state. Users can add invarious health conditions to see how much they might add toprojected health care costs in retirement, or subtract fromthem if, for instance, an overweight person slimmeddown.

Whether you're 60 or 25 or somewhere in between, the prospect ofretirement should be more inspiring—cities to visit, languages tolearn, books to read, or to write —than the anxious business ofwar-gaming what your health will be like 10 or 20 or 30 years out.But if paying closer attention to your body and mind now means moremoney for travel and growth and relaxation after a long hardworking life, it’s not a bad trade-off.

And it's not available to everyone. In the real world, highcosts and steep deductibles discourage many people from using thehealth care they've bought, starting a cascade of ills. Stayinghealthy can be expensive.

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