Fidelity says 2026 retirees may spend $185,500 on healthcare. One category may push those costs higher

A person retiring at 65 in 2026 can expect to pay an average of $185,500 for medical costs throughout their retirement. This new figure from Fidelity Investments represents a 7.5% jump from last year. Rising chronic health conditions and higher service usage drive these costs, leaving many retirees unprepared for the reality of their expenses.

Most individuals rely on a misconception that Medicare covers every medical bill. Data shows that 54% of pre-retirees incorrectly believe their health needs are fully handled by the government. In reality, Medicare beneficiaries must account for premiums for Part B and Part D, alongside co-payments and deductibles. Fidelity notes that these Medicare cost-sharing requirements represent nearly half of the total estimated expenditure.

Financial planning for these years requires looking beyond the basic Medicare estimate. This figure ignores long-term care entirely, such as assisted living or nursing home stays. Those costs often exceed annual household income levels for seniors. With 70% of people turning 65 expected to need some form of long-term care, current savings plans often fall short of the mark.

To manage these burdens, experts suggest using health savings accounts to capture tax advantages. Because contributions to these accounts stay with the individual year-over-year, they serve as a specific fund for future medical needs. High-deductible health plans are the current entry point for these accounts, allowing workers to build a reserve before they stop earning a regular income.

Individuals should also practice caution with unnecessary medical tests and prescriptions. Healthcare providers operate under a system that often favors increased service volume. Asking doctors about the necessity of specific tests can reduce out-of-pocket spending. Planning for retirement involves honest math regarding your health trajectory, not just a hope for standard coverage.