Fidelity puts health care in retirement at about $172,500 for a 65-year-old retiring in 2025, and roughly $345,000 for a couple. The figure is real, but easy to misread: it is a lifetime total for one person, it excludes some of the largest risks, and the actual bill depends heavily on your income.
This covers what that estimate includes and leaves out, what Medicare costs year to year, how your income can raise your premiums through IRMAA, and the expensive gap facing anyone who retires before 65.
Fidelity's Retiree Health Care Cost Estimate is the most cited figure in this area, and its 2025 number is about $172,500 per individual. That total covers Medicare premiums, cost-sharing like deductibles and coinsurance, and out-of-pocket prescription drugs. What it leaves out matters as much as what it includes.
What the $172,500 excludes: long-term care (nursing homes and in-home aides), most dental, vision, and hearing care, and any over-the-counter costs. Long-term care is the big one, and for many households it dwarfs everything the estimate does count.
A single lifetime number also flattens the shape of the spending. The cost is not level. It is relatively modest in your late sixties and climbs steadily into your eighties as care needs grow, which is the opposite of discretionary spending like travel. Averaged out, $172,500 across a 25-year retirement is roughly $6,900 a year, but that average understates the later years and overstates the early ones. For planning, the useful move is to treat health care as its own budget line with its own growth rate, not to bury it inside general expenses. Our guide to estimating your retirement number uses the same Fidelity figure when it builds the spending side from the bottom up.
Medicare is not a single free benefit. It comes in parts, and most of them carry a premium or cost-sharing. Here is what the standard pieces run in 2026.
| Part | Covers | 2026 cost |
|---|---|---|
| Part A | Hospital stays | Premium-free for most (you paid in through payroll taxes), but a $1,676 per-stay deductible |
| Part B | Doctor visits, outpatient care | $202.90/month standard premium, plus a $283 annual deductible |
| Part D | Prescription drugs | Varies by plan; often $30–$50/month |
| Medigap or Advantage | Fills Original Medicare's gaps | Varies widely; a Medigap plan often runs $150–$300/month |
Add the standard Part B premium, a Part D plan, and a Medigap policy, and a typical retiree is paying somewhere around $400 a month in premiums alone, before a single copay. That is the recurring cost the lifetime estimate is largely built from.
The part that surprises people is that Medicare premiums are not the same for everyone. Higher earners pay an income-related monthly adjustment amount, or IRMAA, on top of the standard Part B and Part D premiums. It is worth understanding because your own withdrawal decisions can trigger it.
In 2026, IRMAA begins once modified adjusted gross income passes $109,000 for a single filer or $218,000 for a couple filing jointly. The surcharge climbs through five tiers. At the first tier the Part B premium rises from $202.90 to $284.10 a month; at the top it reaches $689.90, with an additional Part D surcharge of up to about $91 a month layered on.
Two features that catch people: IRMAA is based on your tax return from two years earlier, so your 2026 premium is set by your 2024 income. And it is a cliff, not a phase-in: one dollar over a threshold moves you into the entire next tier.
The cliff is why health care and withdrawal strategy cannot be planned separately. A large one-time withdrawal, a big capital gain, or a Roth conversion can push your income over a threshold and quietly raise your premiums two years later. Required minimum distributions are a common culprit, since they force taxable income whether you need it or not; our guide to required minimum distributions covers how they raise your IRMAA-relevant income and the ways to soften them before age 73. Qualified Roth withdrawals, by contrast, do not count toward the MAGI that IRMAA uses, which is one more reason a pool of Roth money adds flexibility late in retirement.
Medicare eligibility starts at 65. Retire before that, as early retirees do by definition, and you have to bridge the gap yourself, often the single largest obstacle to leaving work early. There are three usual paths.
The marketplace route has a planning twist that mirrors IRMAA in reverse. ACA subsidies shrink as your income rises, so the same low taxable income that helps a Roth conversion hurt your subsidy, and vice versa. A retiree living on taxable-account savings and a modest amount of income can qualify for substantial subsidies, while one pulling large sums from a traditional IRA may get none. Managing which accounts you draw from in these years does double duty, controlling both your tax bill and your health insurance cost. This is where holding both Roth and traditional money pays off, because it lets you choose how much taxable income to report.
The largest health cost in retirement is the one the Fidelity figure excludes. Long-term care, the help with daily activities that many people need late in life, is not medical care in Medicare's eyes, and Original Medicare does not pay for it beyond a short skilled-nursing stint after a hospital stay. The costs are steep: national median figures run around $115,000 a year for a private nursing home room and roughly $75,000 a year for a home health aide. Someone turning 65 today has close to a 70% chance of needing some form of long-term care, according to the Department of Health and Human Services.
There are three ways to cover it: pay out of pocket, buy long-term care insurance or a hybrid life policy with an LTC rider, or spend down your assets until Medicaid takes over. None is cheap or simple, which is why it belongs in the plan rather than in a footnote. Even a rough placeholder, a couple of years of potential care in your eighties, changes how large a cushion your plan needs.
If you are still working and covered by a high-deductible health plan, a health savings account is the most tax-efficient way to prepay retirement health care. Contributions are deductible, growth is untaxed, and withdrawals for qualified medical expenses come out tax-free, the only account in the code with all three breaks at once. After 65 you can also draw HSA money for non-medical use, paying only ordinary income tax with no penalty, so it doubles as a traditional IRA with a medical escape hatch. For anyone eligible, it is the natural place to earmark money for the costs above.
Budget for health care as its own rising expense, not a footnote. A reasonable planning anchor is Fidelity's roughly $172,500 per person, remembering that it excludes long-term care, that it lands more heavily in your later years, and that your income can lift your Medicare premiums through IRMAA. If you retire before 65, add the cost of bridge coverage and treat those years as their own budgeting problem.
The way to see how this lands on your plan is to model it. Add a health care expense to your budget in the calculator, let it grow faster than general inflation, and watch how it moves your probability of success. The rest of our health care guides cover Medicare and IRMAA in more depth as the picture develops.
Add a rising medical expense to your retirement budget and run a Monte Carlo simulation to see how it changes your odds.
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