Posted on 07/30/2026 9:50:20 PM PDT by SeekAndFind
Millions of Americans spend decades preparing for retirement, only to discover one of the biggest expenses isn’t housing, travel, or taxes. It’s healthcare.
A new estimate from Fidelity suggests that a 65-year-old retiring today should expect to spend $185,500 on healthcare throughout retirement. That’s a 7.5% increase from last year and the steepest annual jump in more than a decade.
Even more concerning, more than half of Americans approaching retirement don’t realize Medicare leaves them responsible for thousands of dollars in costs.
According to Fidelity’s 25th Annual Retiree Health Care Cost Estimate, a typical 65-year-old retiring in 2026 will need approximately $185,500 to cover medical expenses during retirement.
That’s up from $172,500 just one year ago.
The 7.5% increase marks the largest annual jump since 2015 and reflects several powerful trends working against retirees:
For many retirees, these expenses become one of the largest line items in their retirement budget.
One of the report’s most striking findings wasn’t the dollar figure.
It was that 54% of pre-retirees incorrectly believe Medicare will pay all of their healthcare costs.
The reality is far different.
While Medicare provides valuable coverage, retirees are still responsible for numerous expenses including:
Many retirees don’t realize these expenses continue year after year.
Fidelity broke down the projected lifetime healthcare costs into several major categories.
Approximately 45% comes from Medicare Part B and Part D premiums.
Another 48% comes from deductibles, copays, coinsurance, and other out-of-pocket medical expenses.
The remaining 7% represents prescription drug costs paid directly by retirees.
For 2026, the standard Medicare Part B premium alone is $202.90 per month, before considering drug coverage or supplemental insurance.
The report also highlights important differences between Medicare’s two primary coverage options.
Traditional Medicare offers broad access to healthcare providers but has no annual limit on out-of-pocket spending unless retirees purchase supplemental Medigap coverage.
Medicare Advantage plans often include prescription drug coverage and cap annual out-of-pocket costs. However, they generally require beneficiaries to stay within provider networks or pay significantly more.
For 2026, Medicare Advantage plans may cap annual out-of-pocket costs at:
Many plans choose lower limits, but costs can still be substantial depending on medical needs.
Perhaps the most important detail in Fidelity’s estimate is what it doesn’t include.
The $185,500 projection excludes long-term care.
Medicare generally does not pay for ongoing assistance with activities such as:
Those expenses can easily reach hundreds of thousands of dollars over a retirement, depending on health needs and where someone lives.
For workers who haven’t yet enrolled in Medicare, a Health Savings Account (HSA) remains one of the most powerful retirement planning tools available.
HSAs offer three significant tax advantages:
Unlike Flexible Spending Accounts, HSA balances never expire and can continue growing for decades if invested.
Once someone enrolls in Medicare, they can no longer make new HSA contributions, but existing balances can still be used to pay many qualified medical expenses, including Medicare Part B and Part D premiums.
Healthcare inflation has historically risen faster than overall inflation, making cash savings alone increasingly difficult to keep pace.
While many HSA holders leave their balances sitting in cash, long-term investors often choose to invest at least part of their accounts in diversified portfolios that have greater potential to outpace rising medical costs.
New investment products are even beginning to target healthcare inflation specifically, reflecting growing concern that medical expenses could become one of retirement’s largest financial risks.
Healthcare has become one of the most overlooked expenses in retirement planning.
Fidelity’s latest estimate suggests today’s retirees should prepare for $185,500 in lifetime healthcare costs—even before factoring in the potentially enormous expense of long-term care.
For Americans who assume Medicare will cover everything, that misunderstanding could become one of the costliest retirement surprises they’ll ever face.
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Of course it is - ever since the Unaffordable Care Act was pushed through this path was inevitable. I don’t understand why the Republicans have refused to repeal it.
“...Medicare Advantage...”
Medicare Advantage is NOT real Medicare — it’s a HMO and is not regulated by US Government rules.
If you are on Medicare part C (Medicare Advantage) ask if you cn move to medicare part G. (hint - you MAY be able to change plans but you also may be required to undergo medical tests/exams to QUALIFY).
What is best for someone entering Medicare coverage to get as a supplement besides Advantage? I have read Medicare Advantage is horrible. What’s the best supplement then? Truly asking for a friend.
They must have cleaned up the VA.
Reports for years that the VA was not good. But I think I read during Trump’s first term, one of the first priorities was cleaning up the VA.
Must have been successful considering all the good reports about it from this thread.
During the first 25 years of retirement, medical expense was not a problem. However right around 80 or just before, the medical costs began to become for us major new expense.
The article uses the word retirees but the operative word is aging or old people.
where’s_the_Outrage? wrote: “Best decision I ever made was to join the reserves after I got out of the Army, now retired I get Tricare coverage for myself, wife and daughter.”
Same here. Nice retirement check too.
This war in Iran will really help...NOT!
Thanks Donald.
My parents were healthy and independent through age 80.
Late last year they both had events which changed everything.
Assisted Living - far from the most expensive care - ranges from between $6-12,000 PER MONTH, depending on level of care (we are currently at the high side).
Do the math: The figure in the article is grossly inadequate.
And that figure does NOT include what Medicare pays re their health expenses (i.e., the costs levied to the rest of us).
Since I am paying my parents’ medical bills, I know what those ambulance rides really cost (the ‘insurance covered’ line).
Average $4000 per trip.
Shocking.
Kudos, troop. Wise choice and good luck.
Curious what rate of inflation Fidelity assumed.
I’d agree but I only Signed up with V.A. 2 yrs ago for some very expensive Treatments. Other than perhaps $20 a month
averaged Copay it’s All been Covered.
.
Medicare has always beenys been a bigger issue than SS. With SS you know approximately how many people are on it and use g actuarial tables have a sense of how long they’ll stick around. When it comes to Medicare it’s impossible to know how much medical care an individual will need in their lifetime. I’m a perfect example. I’ve always been healthy. Never had any big issues, seldom went to the doctor, was never on any prescription drugs. But after I went on Medicare, I was diagnosed with permanent AFib and just finished treatment for Stage 2 prostate cancer. Neither of those are cheap fixes, but if you had asked me when I was 64 if I was worried about any of that I would have told you based on my life up until then I was good.
Look at the Birds,
They neither sow nor reap...
Ditto for hobos.
Thanks
following...
Those charges are shocking. I wonder if the fact that I didn’t need any extra treatment since I only fractured my hip, was the reason that the cost was so low for me. Having a stroke is a completely different situation, and would require more medical treatment on the way to the hospital.
I have Part G and I like it very much.
I went to an Insurance Agent and she informed me about the problem with the Advantage plan and showed me the various offerings available with Medicare.
I also did a search on FR and there were several threads on Medicare that I learned a lot from.
Overall several FReepers mentioned that if your agent recommends an Advantage plan (they make a lot more $ from selling them) you need a new agent!
Best to you, FRiend
Okay...
I see that trying to help you Look Up to try and Cheer you On ain’t gonna Work...
How About some Knok-Knok Jokes,,,,
I’ll Start;
“Who’s There?”
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