A 65-year-old retiring in 2026 can expect to spend an average of $185,500 on healthcare during retirement, according to Fidelity Investments’ 25th annual estimate. That’s up 7.5% from last year, and it doesn’t even include long-term care.
Published July 25, 2026 · 5 min read · Wall Street Sights Personal Finance Desk
Key Facts
- The $185,500 estimate assumes enrollment in Original Medicare (Parts A and B) plus Medicare Part D prescription drug coverage.
- It does not include potential long-term care costs, which can add significantly more.
- Fidelity has published this estimate every year since 2002, making it one of the longest-running benchmarks of its kind.
- About 54% of pre-retirees incorrectly believe Medicare will cover all of their healthcare costs, according to Fidelity’s research.
Where the $185,500 Goes
Fidelity breaks the estimate into three parts. Understanding the split helps explain why Medicare coverage alone isn’t enough to plan around.
| Category | Share of Total | What It Covers |
|---|---|---|
| Medicare Part B & D premiums | 45% | Monthly premiums for medical insurance and prescription drug coverage |
| Other medical expenses | 48% | Copayments, coinsurance, deductibles, and services Medicare doesn’t fully cover, like vision and hearing |
| Out-of-pocket prescriptions | 7% | Drug costs not covered by Medicare Part D |
Why the Number Keeps Rising
Fidelity points to three main drivers behind this year’s 7.5% jump: higher prices across the healthcare system, more frequent use of medical services, and rising costs tied to chronic conditions. Helen Lloyd-Williams, a vice president at Fidelity, called this year’s increase notably larger than in recent years.
The Medicare Gap Most People Don’t Expect
Medicare is often described as a safety net for retirees, but it was never designed to cover every cost. It doesn’t pay for most dental, vision, or hearing care, and it comes with its own premiums, deductibles, and coinsurance. That’s the gap this $185,500 figure is meant to capture: the real cost of healthcare on top of what Medicare already provides.
How to Plan for This Cost
A Health Savings Account, or HSA, is one of the few accounts that lets you save specifically for medical costs with a triple tax advantage: contributions, growth, and withdrawals for qualified medical expenses are all tax-free. You can only contribute to an HSA if you have a high-deductible health plan, so this works best when set up years before retirement. If you’re closer to retirement, building a specific healthcare line item into your retirement budget, separate from everyday living expenses, makes the true cost harder to underestimate.
This article is for general information and is not financial or medical advice. Talk to a licensed financial advisor about how to plan for healthcare costs in your own retirement.
Sources
- CNBC — Fidelity says 2026 retirees may spend $185,500 on healthcare
- Benzinga — Retiring in 2026? You’ll need $185,500 just for healthcare
Reviewed by the Wall Street Sights Personal Finance Desk.
Related reading: see our guide to how much you should have saved by age to see how healthcare costs fit into your overall retirement number.
Senior Markets Correspondent
Sarah specializes in U.S. and global stock markets, corporate earnings, and macroeconomic trends. With over a decade of experience covering Wall Street and international exchanges, she breaks down complex financial news into actionable insights for everyday readers.
