A 65-year-old retiring in 2026 can expect to spend $185,500 on healthcare for the rest of retirement. That’s the latest figure from Fidelity Investments’ 25th annual Retiree Health Care Cost Estimate. It’s up 7.5% from last year’s $172,500, the biggest single-year jump the projection has seen in years.
Married couples retiring at the same age face a combined $371,000. That total breaks down into three distinct pieces, and knowing what’s in each one changes how you plan for it.
The timing matters too. A record number of baby boomers are now hitting the traditional retirement age, a wave often called “peak 65.” That means a growing share of new retirees is running into this number firsthand, many for the first time.
What Counts Toward $185,500 in Retirement Healthcare Costs
Three cost categories make up Fidelity’s estimate, and all three assume you already have Medicare.
Monthly premiums for Medicare Part B and Part D take the biggest single bite: 45% of the total. Cost sharing accounts for 48% of the total. That covers copayments, coinsurance, and deductibles for hospital stays and outpatient visits, plus care Medicare doesn’t cover, like vision and hearing exams. Out-of-pocket prescription costs make up the last 7%.
Less than half of the $185,500 is the premium you pay each month. The rest shows up when you use care.
Spread across a 20-year retirement, that works out to roughly $9,275 a year. Retiree healthcare spending doesn’t arrive in equal installments, though. Costs tend to run lower in your 60s and climb as you age into more frequent visits and higher drug use.
Most Pre-Retirees Get Medicare Coverage Wrong
Fidelity found that 54% of pre-retirees think Medicare will cover all their health costs. But it won’t.
Original Medicare covers part of your hospital and outpatient bills, after you clear a deductible and handle your coinsurance. Part D picks up a portion of drug costs under its own cost-sharing rules. Long-term care isn’t part of the deal at all.
Neglecting this reality turns a manageable expense into a shock. If you plan around “Medicare handles it,” $185,500 arrives as a surprise instead of a line item you saw coming.
The Retirement Healthcare Costs Trend Matters More Than the New Projection
In 2002, Fidelity’s inaugural estimate was $80,000 per individual. At $185,500 per person today, it’s more than doubled. The pace is quickening too. The benchmark climbed about 4% in 2024, 5% in 2025, and 7.5% this year.
Fidelity points to three forces behind the recent jump: rising prices for care itself, more frequent use of medical services, and the added cost of managing chronic conditions. None of those three are temporary blips. Healthcare inflation has outpaced general inflation for years, and an aging population uses more care with every passing year.
A 2026 report from retirement healthcare analytics firm HealthView Services projected long-term healthcare inflation running near 5.8% a year, against a projected Social Security cost-of-living adjustment averaging just 2.4%. The same report estimated that a healthy 65-year-old couple could need 84% of their lifetime Social Security benefits just to cover healthcare.
If your retirement income plan assumes Social Security keeps pace with medical costs, this is worth a second look.
Why Your Actual Healthcare Costs Won’t Match the Average
The $185,500 in modeled costs assumes a single 65-year-old enrolled in original Medicare Parts A and B, plus Part D, with no employer retiree coverage.
Retire at 62 instead of 65, and you’ll cover several years of costs this estimate doesn’t touch at all. Pick Medicare Advantage over original Medicare plus a Medigap policy, and your premium and out-of-pocket structure look nothing alike. Your own health history matters too, since it decides how much of that 48% cost-sharing bucket you end up using.
Location swings the number more than most people expect. The 2026 Milliman Retiree Health Cost Index found that a 65-year-old retiring with a Medigap plan could spend as much as $375,000 on lifetime healthcare in Florida, against $225,000 to $250,000 in Hawaii. That difference between two states is wider than this year’s entire jump in the Fidelity projection.
Take the Medicare Advantage decision on its own. Many Medicare Advantage plans charge nothing beyond the standard Part B premium, and the average enrollee pays around $15 a month in extra premium, according to KFF. That low sticker price comes with a real ceiling: in-network out-of-pocket costs can still run close to $9,250 a year before the plan covers the rest, per the National Council on Aging.
Pair original Medicare with a Medigap Plan G instead, and you’ll pay more upfront: premiums run $120 to $180 a month at 65. In exchange, your out-of-pocket exposure drops close to zero, since Plan G covers nearly everything Medicare doesn’t. A healthy year tips the math toward Medicare Advantage. A year with a major surgery or hospital stay can turn that around fast, and averages can’t tell you in advance which year you’re going to have.
None of that shows up in one averaged number. A plan built around your own retirement age, coverage choice, and location tells you more than a national average ever could.
How to Turn $185,500 Into Your Own Number
The averaged figure is a starting point. What you do with it determines where you actually land.
Start with your Medicare path. Decide between original Medicare plus Medigap and a Medicare Advantage plan, then pull real premium quotes for your own ZIP code. National averages flatten out swings that can run into hundreds of dollars a month, and the Florida-versus-Hawaii comparison above shows just how far apart those swings can land.
Next, look past the 48% cost-sharing average and think about your own health history. Someone managing a chronic condition or with a family history of major surgery should expect to land above the average.
Add your pre-Medicare years and long-term care as their own line items if either applies to you, rather than folding them into a single “healthcare” number. Both behave nothing like the Medicare-era costs Fidelity’s estimate is built around.
Finally, run the whole picture through the Boldin Planner year by year instead of as one lump sum up front. Healthcare costs shift as you age, and a year-by-year view catches that in a way a single six-figure number never will.
What This Healthcare Costs Modeling Leaves Out
The $185,500 skips over-the-counter medications, most dental care, and long-term care.
IRMAA, the surcharge Medicare adds to Part B and Part D premiums for higher earners, isn’t part of this total either. If your retirement income runs high, IRMAA can add real weight to the premium side of this number.
Long-term care is the biggest exclusion by dollar value, and it isn’t small. A single year in an assisted living facility now costs a median of $74,400, more than eight times the $9,275-a-year pace the Fidelity estimate works out to. It plays a different role in a plan too, which is why it deserves its own budget line instead of getting folded into a general healthcare estimate.
Retiring Before 65 Changes the Healthcare Math
Fidelity’s estimate of healthcare costs in retirement is based on being enrolled in Medicare, which starts at 65.
If you’re retiring before 65, expect a different set of costs during the years before Medicare starts: ACA marketplace premiums, COBRA, or coverage through a spouse’s plan. Nothing about those costs appears in Fidelity’s $185,500 figure. Budget the pre-Medicare bridge years and the Medicare-era years as two separate line items.
An HSA Is One Way to Get Ahead of Healthcare Costs
Fidelity’s research also found that 40% of HSA owners haven’t invested any of their balance, leaving years of potential growth unused well before that money is ever needed for care.
If you still have access to a high-deductible health plan, a Health Savings Account is the most direct way to get ahead of this number. Contributions go in pre-tax, growth compounds tax-free, and withdrawals for qualified medical expenses come out the same way. Balances that go unused carry over instead of resetting each year.
For 2026, the IRS caps contributions at $4,400 for self-only coverage and $8,750 for family coverage, with an extra $1,000 catch-up if you’re 55 or older. Every dollar built up in an HSA before retirement is a dollar of this future cost already covered.
Fidelity’s $185,500 healthcare costs estimate is meant to grab attention, and it works. What matters is what you do next. Run your own numbers through the Boldin Planner, adjust for your retirement age and coverage choice, and a six-figure number turns into a plan you can act on.
Frequently Asked Questions About Healthcare Costs in Retirement
Fidelity’s 2026 Retiree Health Care Cost Estimate puts the number at $185,500 for a single 65-year-old retiree and $371,000 for a married couple retiring at the same age. Both figures are meant to cover Medicare premiums, cost sharing, and prescription drug costs for the rest of retirement. Your own number will differ based on your retirement age, coverage choice, location, and health, so treat $185,500 as a starting benchmark rather than a fixed target.
Medicare doesn’t cover all healthcare costs in retirement. Original Medicare handles part of your hospital and outpatient bills after you clear deductibles and coinsurance, and Part D pays toward drug costs under its own rules. Fidelity found that 54% of pre-retirees think Medicare covers everything, a gap that leads many people to underbudget for retirement healthcare.
Fidelity’s retiree healthcare cost estimate has been published every year since 2002, based on a single 65-year-old with no employer retiree coverage, enrolled in original Medicare (Parts A and B) and a Part D drug plan. The 2026 figure of $185,500 splits into Medicare Part B and D premiums at 45%, Medicare cost sharing and services like vision and hearing at 48%, and out-of-pocket prescription costs at 7%.
Fidelity’s 2026 Retiree Health Care Cost Estimate of $185,500 excludes long-term care, most dental work, and over-the-counter medications. Long-term care carries a wide cost range on its own, which is why it works better as a separate budget line than folded into a general retiree healthcare number.