U.S. Retirees Face $185,500 Average Lifetime Healthcare Cost, Fidelity Finds

Fidelity’s 25th Annual Retiree Health‑Care Cost Estimate projects that a typical 65‑year‑old retiring in 2026 will need about **$185,500** for medical expenses through retirement, a 7.5 % rise from the previous year and the steepest increase since 2015. The estimate attributes the jump to higher health‑care prices, greater use of services, chronic‑condition costs and medical inflation outpacing overall inflation.

More than half of pre‑retirees mistakenly believe Medicare will cover all health costs; in reality retirees remain responsible for Part B and Part D premiums, deductibles, copayments, coinsurance and prescription‑drug expenses. These out‑of‑pocket costs now represent the largest line item in most retirement budgets, overtaking housing, travel and taxes. Financial planners advise setting aside a dedicated health‑care fund to avoid unexpected shortfalls.

The broader retirement‑budget picture also includes often‑overlooked expenses such as home‑maintenance, inflation‑driven price rises and occasional family‑support costs, which can further erode purchasing power over a 20‑year retirement span.