Retirees need at least $185K set aside to cover healthcare, even with Medicare, study finds

July 27, 2026 - 15:47

A new analysis from Fidelity Investments finds that a 65-year-old retiring this year should expect to spend at least $185,000 on healthcare expenses throughout retirement. That figure, which covers premiums, copays, and out-of-pocket costs for prescription drugs, represents a 7.5% increase from the previous year's estimate.

The calculation assumes the retiree is enrolled in traditional Medicare, including Part B and Part D coverage, as well as a supplemental Medigap plan. Even with these protections, the study highlights a growing financial burden for older Americans. The jump is driven largely by rising prescription drug costs and higher premiums for Medicare Part B, which covers doctor visits and outpatient care.

For married couples both turning 65 this year, the projected total climbs to $370,000. Fidelity updates its estimate annually to reflect changes in the healthcare landscape, including inflation and shifts in policy. The 2025 figure marks the highest since the firm began tracking the metric nearly two decades ago.

Financial planners often advise clients to factor these costs into their retirement savings goals, noting that healthcare expenses are one of the few categories that tend to rise faster than general inflation. The study does not account for long-term care, dental, or vision services, which can add thousands more to a retiree's annual budget.