Fidelity Warns Retirees of Rising Health Care Costs: $185,500 Estimate for 2026
Event summary
- Fidelity's 25th annual Retiree Health Care Cost Estimate pegs the average expense for a 65-year-old retiring in 2026 at $185,500, up 7.5% from 2025.
- The estimate assumes enrollment in Original Medicare (Parts A and B) and Part D, excluding Long-Term Care expenses.
- Fidelity notes that 54% of pre-retirees incorrectly believe Medicare will cover all health expenses.
- Despite rising costs, Fidelity's research shows retirement confidence is up, with 72% of Americans saying they will retire on their own terms.
The big picture
Fidelity's estimate underscores the growing financial burden of healthcare in retirement, a trend driven by rising prices and increased utilization. As Medicare remains incomplete coverage for many retirees, the firm's emphasis on early planning and HSA utilization reflects broader industry shifts toward holistic retirement strategies. With $17.9 trillion in assets under administration as of March 2026, Fidelity's insights carry significant weight for both individual savers and institutional clients.
What we're watching
- Cost Inflation
- Whether the 7.5% year-over-year increase in healthcare costs will accelerate further due to chronic condition trends and rising care prices.
- Retirement Preparedness
- How pre-retirees' misconceptions about Medicare coverage may impact their long-term financial planning.
- HSA Utilization
- The pace at which Americans with HSAs will begin investing their balances, given that 40% currently leave potential growth untapped.
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