Retirees may need $185K for healthcare, Fidelity estimates

Healthcare Retirees may need $185K for healthcare, Fidelity estimates Comments: by Andrew Dorn - 07/24/26 10:15 AM ET Comments: Link copied by Andrew Dorn - 07/24/26 10:15 AM ET Comments: Link copied

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(NewsNation) — A 65-year-old retiring this year can expect to spend $185,500 on healthcare and medical expenses throughout their golden years.

That’s up 7.5 percent from Fidelity Investments’ estimate of $172,500 a year ago and more than double its inaugural estimate from 2002.

This year’s increase is nearly twice as large as the jump from 2024 to 2025 and reflects rising prices for care, increased utilization and growing costs tied to chronic conditions, according to Fidelity.

The latest estimate comes amid a major demographic transition, with roughly 4 million Americans turning 65 each year through 2027.

Fidelity’s $185,500 projection assumes retirees are enrolled in Medicare Parts A, B and D and includes premiums, copayments and other out-of-pocket costs for medical care and prescription drugs throughout retirement.

More than half of preretirees (54 percent) incorrectly believe Medicare will cover all of their health expenses, the financial institution found.

“Medicare is a critical part of retirement health coverage, but it does not eliminate every health care expense,” Steve Betts, head of Fidelity Health, said in a release.

Importantly, Fidelity’s estimate does not include long-term care costs, which can add up quickly for retirees who eventually need that care.

A recent analysis for the Health and Human Services Department estimated that 56 percent of people turning 65 between 2021 and 2025 will need some form of long-term care during their lifetime.

Consulting firm Milliman estimated earlier this year that 65-year-olds should set aside $135,000 to cover future paid long-term care costs.

Taken together, the estimates serve as a reminder that planning for retirement means preparing not only for everyday living expenses but also for significant medical and long-term care costs.

That financial pressure could also be keeping some Americans in the workforce longer than they intended.

Nearly 1 in 4 U.S. workers, about 23 million adults, say they’re staying in their current job even though they want to leave because they’re afraid of losing their health insurance, according to a new study from the West Health-Gallup Center on Healthcare in America.