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As medical advances extend the average lifespan, projected health care saving requirements likely will have to rise accordingly.

Planning for retirement usually means budgeting for food, travel and other expenses. Don’t forget to include $220,000 for health care costs. 

That’s how much the average 65-year-old couple will spend on medical expenses through their retirement, according to the latest estimates from Fidelity Investments.

If you’ve set your sights on retiring earlier, plan on squirreling away an even bigger savings pile. The average couple hoping to retire at 55 will spend $744,800 on out-of-pocket health costs if they both live to age 85, according to a separate study released Wednesday by the Society of Actuaries.

That’s if you’re relatively healthy later in life. Those averages don’t include the cost of treating chronic diseases like cancer or heart disease.

“People with those conditions spend about twice what the aver age population does,” said Dale Yamamoto, the author to the Society of Actuaries study. “So you need to take these numbers and double them.”

Those numbers also don’t include the cost of long-term care like a stay in a nursing home, which isn’t typically covered by Medicare.

The latest estimates for the average health care tab is likely to come as something of a sobering surprise to most people planning for – or in - retirement. In a separate survey, Fidelity found that nearly half of people aged 55 to 64 planning for retirement figured they would need just $50,000 to pay for health care costs.

Estimating those costs is the thorniest wild card in any retirement plan, largely because longevity and illnesses are so difficult to predict. Those variables are further complicated for Americans by the ongoing reform of medical insurance coverage in the U.S., both through the Affordable Care Act and proposed changed to Medicare.

“It’s more difficult today to try and give people meaningful guidance because the individual insurance market is going to change dramatically,” said Sunit Patel, senior vice president of Fidelity's benefits consulting group. “But we still expect the (retirement health cost) number to be significant.”

Uncertainty over the cost of insurance coverage is further complicated by the potential rise in the cost of health care itself. Fidelity’s projection for how much would-be retirees need to save has fallen 12 percent from its high of $250,000 in 2010.

That drop largely reflects a sharp drop last year in Medicare spending, which rose just 0.4 percent per enrollee last year, and just 1.9 percent between 2010 and 2012. That’s well below the seven percent average annual increases between 1985 and 2009.

Overall, U.S. healthcare spending has been rising just 3.9 a year since 2009. That year, healthcare spending jumped 6.6 percent.

Part of the slowdown is the result of a weaker economy, according to economists. Spending increases have also slowed as many of the most common brand name drugs are now available in cheaper generic versions. The Affordable Care Act is slowing the rate of payment increases to hospitals, physicians and health plans. It remains to be seen whether those trends will continue.

Regardless of the changes in coverage and costs, the ultimate unknown is how long you’re going to live. As medical advances extend the average lifespan, projected health care saving requirements likely will have to rise accordingly.

The Society of Actuaries study, for example, found that a couple that expects to live until age 90 would need an average of $441,200 to meet out-of-pocket healthcare costs –  more than double the cost of living to age 80.

Reuters contributed to this report.

Maybe Yahoo should have done its homework before banning work-at-home.

For millions of American companies large and small, telecommuting has become a critical force in boosting worker productivity and growing profits in the information age.

Take the case of Dallas-based Ryan, LLC, the seventh largest corporate tax services firm in the U.S., with more than 900 employees in 45 locations in the U.S., Canada and the U.K. In August 2008, the company realized it had a problem. Voluntary turnover was roughly 20 percent. Some employees who quit said the long hours at the office left them little time for a personal life.

“We had a policy that required people to be physically present,” said Delta Emerson, the company’s chief of staff. “If you were not seen, you were questioned as to whether or not you were working.”

The solution: a flexible work schedule that allowed employees to work remotely and set their own hours. Though the transition had its bumps, the results were surprising.

Not only did the work all get done, the company became even more productive. Revenues went up. Client satisfaction went up. And turnover went down.

Emerson said the lesson was that there’s more to productivity than just showing up at the office. Ryan workers know that their job performance is now being measured on how much work they get done, not how reliably they show up at the office, she said.

“Everyone knows what they have to do to cut it,” said Emerson. “But people treasure this flexibility to the point that they will give their all to continue to work in an environment that allows that.”

By focusing more on measuring how well employees are doing their job, and worrying less about where the work gets done, companies with flexible work policies are seeing productivity go up, according to human resources experts.

That may be one more reason American companies are adopting flexible work policies. As of last year, nearly two-thirds of employers offered flexible work rules to at least some of their employees – up from about a third in 2005, according to a national study by the Society for Human Resource Management.

“We don’t see this trend going away,” said Michael Aitken, SHRM’s vice president of government affairs. "This is the way that work will get done in the future. I spend a great deal of time and energy in educating our members about the value that it offers.”

But old perceptions about the distractions of the home office persist. In her now widely-read memo explaining why Yahoo now forbids its employees to work from home, CEO Marissa Mayer explained that “speed and quality are often sacrificed when we work from home.”

The vast majority of companies who support flexible work practices, however, disagree. Employees who take advantage of telecommuting and other flexible policies often are more productive than if they worked only at the office, according to SHRM research. Some 97 percent of human resources managers at companies with those policies said that productivity is “the same or better” than with office-only work rules.

By skipping the travel time required to get to the office, telecommuting boosts the number of productive hours each employee can devote to work. In a 2010 study, American Consumer Institute economists Joseph Fuhr and Stephen Pociask calculated that roughly 1.7 trillion minutes are spent commuting every year – at a cost in lost work time and transportation expenses of roughly 7.2 percent of U.S. gross domestic product.

The economic benefits of expanding telecommuting could be huge. The authors estimate that, over 10 years, a 10 percent increase in telecommuting hours would save nearly $100 billion in lost time and expense.

We would all also breathe a little easier. Fuhr and Pociask calculated that by saving 4.4 billion gallons of gasoline, along with the energy savings from reduced office space, a 10 percent increase in hours worked form home over the next decade would reduce greenhouse gas emission by more than half a billion tons of carbon dioxide.

To be sure, not all occupations are well-suited to telecommuting. Waiters and barge pilots aren’t ever going to be very productive working from a home office. But as more occupations become tied to a computer screen for much of the day, it matters less where that screen is situated.

As many home office workers can attest, some work is better performed in a group setting – especially dull, menial tasks where the urge to goof-off and ready distractions are ever present.

That was also the conclusion of a 2012 study by economist Glenn Dutcher at the University of Innsbruck, who found that while telecommuting “has a positive impact on productivity of creative tasks” it has a “negative impact on productivity of dull tasks.” So if your job involves a lot of copying and collating, you’ll probably get more done chatting with co-workers while visiting the water cooler in the copy room.

Mayer also cited those kind of chance encounters in defense of her “everyone back to the office” mandate.

“Some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people, and impromptu team meetings,” she wrote.

From TODAY: KLG sticks up for Yahoo CEO Marissa Mayer

But for every serendipitous encounter that sparks the creation of a winning new product, there are many hours wasted sitting in someone else’s unproductive meeting or listening to a cube neighbor justify their picks in the Oscars pool, said Aitken.

“(Telecommuting) allows for less interruption at the office,” he said. “No people swinging by and wanting to talk about what happened over the weekend.”

And while detractors argue that a home office present too many productivity-killing distractions, workers who telecommute are better able to juggle their work and home lives. That helps reduce absenteeism.

“I may want to go to a doctor’s appointment or pick up the dry cleaning or go to my son or daughter’s school play,” said Aitken. “Telecommuting allows that worker the peace of mind to be able to do the things they may need to do for their life side and still meet their work obligations.”

Supporters of flexible work policies say the key to making the transition work is the development of better ways to measure how well their employees are doing. Being the first in the parking lot in the morning and the last to leave at night usually has little to do with how much actual work gets done in between.

“We used to measure people based on hours worked, and the person who worked the most hours was like a hero,” said Emerson. “There was frequently no tie-in related to what else they had done. So people who put in the hours could get away with a lot. Now, we don’t even pay attention to hours anymore. We’re looking at results.”

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Hey Marissa! Working from home is alive and well