Fidelity Projects 2026 Retiree Healthcare Costs at $185,500

Fidelity Investments projected in its 25th annual Retiree Health Care Cost Estimate that a 65-year-old retiring in 2026 will spend an average of $185,500 on medical expenses. For couples, the estimated cost is $371,000. This represents a 7.5% increase over the previous year's estimate of $172,500, following growth of 5% in 2025 and 4% in 2024.

The rise is attributed to increasing care prices, higher utilization of medical services, and growing costs associated with chronic conditions. The estimates assume enrollment in traditional Medicare Parts A, B, and D, but specifically exclude dental services, over-the-counter medications, and long-term care. The United States Department of Health and Human Services notes that nearly 70% of Americans turning 65 will eventually require long-term care.

Fidelity research indicates that 54% of pre-retirees incorrectly believe Medicare covers all retirement healthcare expenses. Consequently, the firm is urging employers to prioritize employee education and the use of health savings accounts. These findings align with broader industry data: Milliman estimates lifetime costs for a healthy 65-year-old couple at $637,000, while HealthView Services projects $661,812. Additionally, the Centers for Medicare and Medicaid Services projects total U.S. health spending will reach nearly $9 trillion, or 20.6% of GDP, by 2034.