Fidelity reports rising retiree healthcare costs now at $185,500 annually
According to Fidelity Investments, the average American retiring at age 65 will face approximately $185,500 in medical expenses during retirement. This represents a 7.5% increase from last year and follows another 4% rise in 2025. The estimate includes Medicare Part A, B, and D but excludes long-term care costs such as nursing homes or home healthcare. Fidelity's calculation aims to highlight the growing financial burden of healthcare on retirees amid a broader cost-of-living crisis. Many Americans mistakenly believe that Medicare will cover all their retirement medical expenses; however, Fidelity notes that 54% of preretirees hold this misconception. Experts emphasize the importance of planning for out-of-pocket costs and considering tools like health savings accounts (HSAs) to manage these rising expenses. Long-term care is not included in Fidelity's estimate but can be substantial—home healthcare, assisted living, or nursing home stays may cost tens of thousands annually. With 70% of Americans reaching age 65 expected to need long-term care at some point, financial planning for retirement must account for these additional costs.
Topics: cost of living Fidelity Investments healthcare costs retirees