The new estimate covers Medicare premiums and out-of-pocket spending in retirement, while excluding long-term care, as advisers urge workers to use HSAs and plan earlier.
A 65-year-old retiring this year may need $185,500 in savings to cover healthcare expenses during retirement, up 7.5% from last year’s $172,500, according to Fidelity’s annual survey published on Tuesday. Fidelity said healthcare accounts for roughly 15% of the average retiree’s annual expenses, underscoring a planning gap that retirement researchers say many households underestimate. The estimate assumes traditional Medicare (Parts A and B) and Medicare Part D, including premiums, copayments and other out-of-pocket costs for medical care and prescription drugs, but excludes long-term care, over-the-counter medications and most dental services. This year’s Medicare costs include a monthly Part B premium of $202.90, up $17.90 from last year, and an annual Part B deductible of $283, up $26. Advisers cited in the report said retirees should become more engaged healthcare consumers and, for younger workers, consider an HSA (tax-advantaged medical savings account) if they qualify through a high-deductible health plan. The 2026 HSA contribution limit is $4,400 for individuals and $8,750 for families, with an additional $1,000 allowed for individuals age 55 or older.