Fidelity: Retirees in 2026 May Face Healthcare Costs of $185,500 Over Retirement

Fidelity Investments estimates that a 65-year-old retiring in 2026 will need approximately $185,500 to cover healthcare expenses throughout retirement. The figure is based on projected Medicare premiums, out-of-pocket costs, and prescription drug spending for a single retiree.

The estimate does not include long-term care costs, which can add tens of thousands of dollars or more depending on the level of care needed. Fidelity said couples should plan for roughly double the individual estimate, though actual costs vary widely based on health status and location.

Medicare covers a significant portion of healthcare costs for retirees, but it does not cover everything. Premiums for Medicare Part B, which covers outpatient care, are expected to rise again in 2027. Prescription drug costs, even with the Medicare Part D cap introduced in recent years, can still be substantial for retirees managing chronic conditions.

Health savings accounts, or HSAs, remain one of the most tax-efficient tools for covering healthcare costs in retirement. Contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses are not taxed. However, HSAs are only available to people enrolled in high-deductible health plans, which limits access for some workers.

Financial planners said the Fidelity estimate is a useful benchmark but should not be treated as a precise prediction. Individual healthcare needs vary significantly, and some retirees will spend far less while others will spend considerably more.

Long-term care insurance is another option for managing healthcare risk in retirement, though premiums have risen sharply in recent years. Some financial advisors recommend hybrid life insurance policies that include long-term care riders as an alternative.