Healthcare Costs in Retirement Statistics (2026)

The most-cited figure comes from Fidelity, which estimates a single 65-year-old retiring in 2025 will spend about $172,500 on healthcare over retirement, and an average couple about $345,000 after tax (see the table below). That is up more than 4% from the 2024 estimate of $165,000.

Both numbers assume no employer retiree coverage but enrollment in original Medicare. Crucially, neither includes long-term care, so they are the medical bill, not the total cost of aging.

The Fidelity estimate covers Medicare Part A and Part B premiums and cost-sharing, plus Part D drug premiums and out-of-pocket costs, and some services original Medicare excludes. It is a lifetime figure spread across roughly two decades, not a bill due at 65.

What it leaves out matters as much as what it includes: no long-term care, no most dental, no vision, and no over-the-counter drugs. Add those and a realistic lifetime total can run well above the headline.

Fidelity's inaugural 2002 estimate was $80,000 for a single retiree. It has more than doubled since, reaching $165,000 in 2024 and $172,500 in 2025 (see the chart below), tracking medical inflation that has consistently outpaced general prices.

The trajectory is the real message: healthcare is one of the few retirement costs that reliably rises faster than inflation, so plans built on today's dollars tend to understate the bill a decade or two out.

The Employee Benefit Research Institute frames the problem as savings needed rather than a spending average. For a couple with Medigap Plan G, EBRI's 2025 analysis puts the target at about $267,000 for a 50% chance of covering costs and $405,000 for 90% confidence (see the table and chart below).

Individuals need less: about $212,000 for a man and $252,000 for a woman at the 90% level, the gap reflecting women's longer life expectancy. In an extreme high-drug-cost case, a couple's target reaches $469,000.

The coverage you choose shifts the number sharply. EBRI's 90%-confidence target for a couple drops from about $405,000 with Medigap Plan G to roughly $203,000 with Medicare Advantage (see the table below), because Advantage plans carry much lower premiums.

The tradeoff is real, though: Advantage plans use networks and prior authorization and cap out-of-pocket costs at a plan level, so the lower savings target comes with more usage risk. There is no free lunch, only a different distribution of it.

Even with Medicare, retirees pay meaningful premiums and cost-sharing. In 2026 the standard Part B premium rises to $202.90 a month (from $185.00), the Part B deductible to $283, and the Part A hospital deductible to $1,736 per benefit period (see the table below).

Higher earners pay income-related surcharges (IRMAA) on top of the standard Part B and Part D premiums, which can more than double the monthly cost. Most people, however, pay no Part A premium because they qualify on work history.

Averages sit below the scary lifetime totals. KFF's analysis of Medicare beneficiaries found average out-of-pocket spending of about $5,460 a year, split roughly 42% premiums and 58% services (see the table below). That figure is from 2016 data, the most recent full analysis, and would be higher today.

The distribution is what hurts: a healthy year can be cheap, but a hospital stay, a new prescription, or a move into care can spike costs far above the average in a single year.

Healthcare spending is back-loaded into the oldest years. KFF found beneficiaries aged 65-74 spent about $5,021 out of pocket, while those 85 and older spent $10,307, more than double, as chronic conditions and care needs accumulate (2016 data).

For someone in a long-term-care facility, out-of-pocket spending averaged $19,632, and for facility residents without Medicaid it reached $41,782. The late-retirement years, not the early ones, drive the biggest bills.

The Inflation Reduction Act added a hard ceiling on drug costs. Starting in 2025, Medicare Part D caps out-of-pocket spending at $2,000 a year, rising to $2,100 in 2026, the first such limit in the program's history, and insulin copays are capped at $35 a month.

The relief is concentrated among the sickest: about 11 million enrollees are expected to hit the cap, with average savings around $600, rising to about $1,100 for those without low-income subsidies. For high-drug-cost retirees this is a material change to the math.

Long-term care is the cost the Fidelity and EBRI medical estimates deliberately exclude, and it is the largest. Genworth's 2024 survey put the national median for a private nursing-home room at $127,750 a year, up 9%, and a semi-private room at $111,325 (see the chart and table below).

Home and community care is cheaper but not cheap: a home health aide ran a median $77,792 a year, assisted living $70,800, and adult day care $26,000. Multi-year stays can consume a large share of a nest egg.

The odds are not a coin flip, they are worse. HHS/ASPE research finds about 70% of adults who survive to 65 will develop severe long-term-care needs before they die, and roughly 48% will use some paid care (see the table below).

Duration varies widely: about half of paid-care users need care for two years or less, but roughly 28% need it for more than four years. Women average longer disability spells (2.5 years) than men (1.5 years), reflecting longer lifespans.

A common and costly misconception is that Medicare pays for nursing homes. It does not cover custodial long-term care, only limited skilled-nursing stays after a hospitalization. Most long-term care is paid out of pocket, by long-term-care insurance, or by Medicaid once assets are largely spent down.

That gap is why long-term care sits outside the standard retiree estimates: it is unpredictable, potentially enormous, and not insured by the program most retirees assume will catch them.

The burden is best measured against income. KFF found half of traditional Medicare beneficiaries spent at least 12% of their income on out-of-pocket healthcare, and a quarter spent 23% or more (2016 data). The strain falls hardest on lower-income retirees.

It is also projected to worsen: KFF estimated the median out-of-pocket burden rising from about 14% of income in 2013 to 17% by 2030, as healthcare costs outpace incomes and savings.

Awareness is thin. Fidelity found about 1 in 5 Americans have never considered retirement healthcare costs, rising to 1 in 4 among Gen X, and 17% across generations have taken no action to plan for them.

The most tax-efficient tool is a health savings account, which offers a triple tax advantage, yet only about 23% of Americans contribute for retirement and just 3 in 10 invest the balance. Among HSA holders aged 55-64, 52% did not know an HSA can serve as a retirement vehicle.

Treat healthcare as its own line in the retirement plan, not a rounding error. A reasonable working target is six figures per person for medical costs, plus a separate reserve or insurance decision for long-term care, which is the true tail risk.

Because these bills land largely in later years and rise faster than inflation, the money earmarked for them benefits from staying invested for real growth rather than sitting in cash. Fund an HSA if you can, decide on long-term-care coverage before your 60s, and revisit Medigap versus Advantage as your health and budget change.