For many people thinking about retirement, a big worry is how to budget for medical expenses. While an employer may have picked up a big percentage of medical costs in the past, that's not often the case for many retirees.

So how much should you set aside for Medicare and supplemental insurance premiums? 

A recent study by Fidelity suggests that a 65-year-old couple should plan on spending $260,000 over their remaining years—a 6 percent increase from its estimate one year ago. 

HealthView Services, a data firm that specializes in healthcare cost projections has an even more daunting estimate of $288,400.

For a 55-year-old couple, HealthView says a couple should save $368,474.   

Both estimates from Fidelity and HealthView factor in typical premium costs for Medicare Part B and Part D and premium payments for supplemental insurance.

The numbers go up even more when you account for out-of-pocket medical expenses—not to mention long-term health insurance.

While Fidelity's analysis assumes an average life span of 85 for men and 87 for women, HealthView's analysis assumes an average life expectancy of 87 for men and 89 for women.

While life expectancy is one factor, the main driver of those estimates is the expected trajectory of health care expenses. While overall annual inflation remains below 2 percent, HealthView estimates overall retiree health care cost inflation will rise by an annualized rate of 5.1 percent over the next 20 years.

Scott Thoma, investment strategist at Edward Jones, who specializes in retirement planning guidance, recommends taking a deep breath.

“Last I checked, no one I know had to write a $260,000 check the day they retired to cover all their medical expenses,” he says.

Thoma estimates that a 65-year-old today will need between $4,500 and $6,500 a year to cover health care insurance premiums and out-of-pocket costs in retirement.

“Health care is one of the biggest retirement expenses, but once you break it down it’s easier to see how planning and budgeting today will make it possible to cover the costs later,” he says.

Healthy Retirement Savings Strategies

Here are two strategies that can be especially helpful when you factor in health-care costs with your retirement savings.

Break Away From the Traditional IRA and 401(k). “Building up assets in Roth accounts is going to give you important flexibility in retirement,” says Peter Stahl, a certified financial planner and founder of Bedrock Business Results, which educates financial pros on strategies to help their clients plan for retirement health care costs.

The advantage of a Roth IRA and Roth 401(k) is that retirement withdrawals will be tax-free. That will not only help keep your overall tax bill down, it in turn can help you steer clear of higher Medicare Part B and Part D premiums that kick in as income rises.

For example, the standard monthly premium for Medicare Part B coverage (outpatient medical costs) is $121.80 this year for individuals with income below $85,000 ($170,000 for couples). If your income is above that level the additional monthly charge this year ranges from $48.70 to $268.

The additional premium charge for Medicare Part D coverage (prescription drug) for higher income households ranges from $12.70 to $72.90.

“Managing your tax bracket in retirement will have a direct impact on your expenses,” says Stahl.

Many employers now offer a Roth 401(k) option. If yours doesn’t and your modified adjusted gross income is below $117,000 this year ($184,00 for married couples filing a joint return) you can tuck $5,500 into a Roth IRA if you are younger than 50. Over 50 each individual is allowed to save $6,500 this year.

If that’s not doable, you may want to consider converting some Traditional IRA assets into a Roth IRA. However, you should know that the amount converted is treated as ordinary taxable income in the year you make the move. A trusted financial advisor or tax pro with conversion experience is going to be well worth the fee.

Give the High Deductible Health Plan (HDHP) Serious Consideration. With open enrollment season fast approaching, switching to the high deductible health plan could be one of your savviest retirement planning moves.

While you will likely be on the hook for a higher deductible than with a PPO plan—the 2017 high deductible health plan minimum deductible will be $1,300 for individuals and $2,600 for family coverage—you’ll be eligible to contribute to a Health Savings Account, (HSA) which is a valuable stealth retirement savings vehicle.

Like a Flexible Spending Account, money in an HSA can be used at any time to pay current medical expenses, such as deductibles and co-pays. But unlike the FSA, you can roll over any unspent money from year to year.

“Your goal should be to not take a nickel out of your HSA until you retire,” says Stahl.

HSA’s offer a rare triple tax break: Money you contribute is made from pre-tax income, which reduces your taxable income. There is no use-it-or-lose rule; any money you don’t tap stays in the account and grows tax deferred. And the biggest payoff comes in retirement: any money you withdraw to pay for a covered medical expense is considered tax-free income.