$185,500 is the average amount a single 65-year-old retiring in 2026 can expect to pay for healthcare over the remainder of their life, Fidelity Investments projected on July 21, 2026. The figure is 7.5 percent higher than Fidelity's estimate for a 65-year-old retiring in 2025, and it excludes any long-term-care costs. Fidelity said the estimate assumes traditional Medicare enrollment and counts premiums, out-of-pocket prescription costs, copayments, coinsurance and deductibles. Fidelity will publish its next annual update in 2027.

$185,500 is the headline number and it carries a specific shape: it applies to a single 65-year-old, not a couple, and it's built around familiar Medicare coverage patterns, Fidelity said. The firm calculated the total on July 21, 2026 and tied the year-on-year rise largely to higher prices for care, greater use of medical goods and services as people age, and the growing cost of managing chronic conditions.

What the figure covers

Fidelity's model presumes traditional Medicare. That means the $185,500 total layers Medicare Part A hospital coverage, Part B physician and outpatient coverage, and Part D prescription drug benefits together with the premiums and out-of-pocket items retirees actually pay. Fidelity's breakdown assigns roughly 45 percent of lifetime healthcare costs to Part A, 48 percent to Part B and 7 percent to Part D. The firm explicitly excludes long-term-care spending from the headline number, so the figure doesn't include assisted living, custodial care or extended nursing home stays.

The omission matters. Independent industry measures published at the same time show materially larger lifetime bills when long-term-care and alternative coverage mixes are included. Milliman's 2026 Retiree Health Cost Index estimated that a healthy 65-year-old couple retiring this year could face as much as $637,000 in healthcare expenses over their remaining lifetimes, a number that Milliman said was pushed up in part by higher Medigap and Medicare Part B related premiums. Milliman's analysis also displayed wide gaps by gender and by plan type: a single retiree with Medigap had materially higher projected lifetime costs than a retiree in Medicare Advantage, according to Milliman's published figures.

Several moving parts explain Fidelity's 7.5 percent increase from the 2025 estimate. Fidelity pointed to price rises for care, rising utilisation with age and more expensive chronic-disease management. Other recent research picks out related pressures. The Center for Retirement Research at Boston College documented declines in Medicare reimbursements for some hospital and physician services, a trend that could change where providers choose to practise and shift costs back to beneficiaries through access limits or higher out-of-pocket spending.

Mastheads

Long-term healthcare inflation compounds the problem. HealthView Services projected long-term healthcare inflation at 5.8 percent for 2026, while projected Social Security cost-of-living adjustments are about 2.4 percent.

That gap reduces retirees' real buying power for medical care over time and means nominal Social Security increases will buy fewer healthcare services as costs rise faster than benefits.

The practical lesson for households is plain. Most lifetime medical spending for a typical retiree is concentrated in Medicare-covered hospital and physician services and prescription drugs, so choices about supplemental coverage or switching to Medicare Advantage can shift both the timing and size of out-of-pocket bills. But for retirees who need extended custodial or institutional care, the headline $185,500 will understate total financial exposure by a large margin.

Policy watchers should note the direction as much as the number. A long-term pattern of slower Medicare reimbursements, persistent healthcare inflation above Social Security COLAs, and rising premiums for supplemental plans point to growing pressure on retirement budgets. Households will either need larger savings buffers, more generous employer retiree benefits, or different coverage mixes to manage the risk.

Fidelity's estimate is an annual snapshot. The firm released the 2026 Retiree Health Care Cost Estimate on July 21, 2026 and will next update the projection in 2027.

Related Articles

Fidelity will publish its next annual retiree health cost estimate in 2027. Originally reported by PlanAdviser.

This article was created with AI assistance.