If you’ve planned financially for retirement, you probably have considered housing expenses, food and utility costs, transportation expenses, and maybe you’ve even set aside some cash for leisure activities and travel. But, have you thought about the money you’ll spend on health care?

Fidelity Investments estimates that a 65-year-old couple retiring in 2010 will need approximately $240,000 to cover health care expenses in retirement—even with Medicare.

“There is an assumption that when you get on Medicare, everything is going to be covered, but that is not the case,” says Pamela Villarreal, a senior policy analyst at the National Center for Policy Analysis.

Planning for the ‘doughnut hole’

Villarreal says retirees should plan to pay for things like Medicare premiums, hospital stays longer than 60 days, dental visits, home health care, assisted living, and prescription drugs that are not covered because of the so-called Part D “doughnut hole.”

When you combine the estimated annual out-of-pocket expenses with increased life expectancies, the tab can be staggering. In fact, Villarreal says medical expenses are one of the leading causes of debt among older adults.

So, what can you do to make sure you don’t drain your retirement savings paying for medical care?

First, consider your individual health needs and estimate the medical costs you’re likely to incur over the course of your retirement. Ideally, set up a separate account to save for health care expenses.

Villarreal suggests retirees look for ways to reduce their medical expenses. She recommends buying generic drugs when possible, and asking your doctor to write prescriptions for double your dosage so you can cut pills in half because the higher dosage pills are often cheaper.

Do your health care homework

Villarreal also says to do your homework before purchasing a Medicare Part D Prescription Drug Plan. “Many private companies offer Part D [coverage], she says, “so there is a lot of competitive pricing, and seniors can shop around.”

If you’re approaching retirement and haven’t saved enough to cover medical expenses, Art Koff, CEO of RetiredBrains.com, suggests deferring your retirement a few years until you set aside more money. If you have an employer-sponsored health savings account, you may be able to use those funds to pay for some medical expenses when you retire.

If you’re already retired, Koff recommends getting a part-time job. You’ll earn extra money and stimulate your mind. Consider seasonal work, turning a hobby into a business or offering consulting services to your former employer. Sites like www.coolworks.com and www.RetiredBrains.com both house resources for retirees reentering the workforce.

Depending on your age and health, long-term care insurance could drastically reduce your out-of-pocket medical costs, according to Carolyn Rosenblatt, a nurse-attorney and author of The Boomer’s Guide to Aging Parents. Long-term care insurance may pay for things like home health care, assisted living, and nursing home stays.

“Long-term care insurance isn’t perfect, but it sure makes a difference,” Rosenblatt says.

She recommends you buy a policy before you turn 60 and work with a reputable broker who specializes in long-term care insurance. Consider the premium cost, whether the policy has an elimination period and if it covers the types of long-term care you would prefer.

meghan.streit@erickson.com