Fidelity says retirees now face $185,500 in healthcare costs — up 7.5% from last year, and long-term care isn't included

Chase Kell

Mon, July 27, 2026 at 5:30 AM PDT 4 min read

As America's cost-of-living crisis continues, healthcare is among the many things that have dramatically increased in cost, especially for retirees.

Using data from Fidelity Investments, Marketwatch reports that the average 65-year-old American who retires this year will spend $185,000 on medical expenses and healthcare during their retirement, a 7.5% increase from just one year ago. This comes after a 4% increase from in 2025.

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Fidelity's annual retiree healthcare calculation is meant to raise awareness around what could be one of the largest expenses that retirees may face, helping them with making informed decisions about their financial planning.

"Financial planning for retirement is about more than reaching a savings target, especially as retirement itself continues to evolve," Shams Talib, head of Fidelity Workplace Consulting, told MarketWatch. "Whether Americans fully stop working, phase into their retirement or pursue new ways to stay engaged, healthcare consistently remains one of the largest expenses they will face."

Many retirees misunderstand Medicare's coverage

Fidelity's annual retiree healthcare calculation assumes the average American retiree is enrolled in Medicare Part D, which covers prescription drugs, as well as Part A and Part B, which cover doctor visits and most inpatient hospital stays.

This means retirees with Medicare coverage can still expect to pay nearly $200,000 on healthcare throughout their retirement. Fidelity's data, however, reveals that 54% of preretirees believe all of their healthcare expenses in retirement will be covered by Medicare.

"Medicare is a critical part of retirement health coverage, but it does not eliminate every healthcare expense," Steve Betts, head of Fidelity Health, told MarketWatch. "This estimate helps illustrate why both preretirees and retirees alike will benefit from carefully considering out-of-pocket expenses and how they will pay for them as they build out their retirement income strategy."

While Fidelity's estimation takes Medicare into account, it doesn't factor long-term care such as assisted living, nursing-home costs or home healthcare support into its calculation. And long-term healthcare, as MarketWatch notes, can be costly.