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KEY TAKEAWAYS
- A 65-year-old retiring in 2026 will face an average of $185,500 in healthcare costs during retirement.
- Healthcare costs for retirees are rising more than three times faster than the average American’s medical expenses.
- Despite rising healthcare costs, Americans’ confidence in their retirement plans has grown.
The majority of workers say they will find alternative ways to afford rising healthcare and retirement costs.
A 65-year-old retiring in 2026 can expect to pay an average of $185,500 in healthcare costs in retirement, according to the most recent estimate from Fidelity. This includes Medicare premiums and out-of-pocket costs for prescription drugs and medical services. That is a 7.5% increase from last year’s estimate, according to Fidelity.
Healthcare costs have been steadily rising for all Americans. The popularity of high-priced drugs, such as weight-loss drugs, and high-cost therapies, such as cell therapy and cancer therapies, is primarily attributed to this rise in costs. In addition, overall Medicare premium costs increased in 2026, raising retirees’ monthly costs.
Workers Look At Alternative Retirement Plans
Despite rising healthcare costs, more Americans are confident about their retirement plans than the previous year, according to a December 2025 survey from Fidelity.
Most Americans, 72%, say they are confident they will be able to retire when and how they want, a five percentage-point increase from last year. The majority of workers are aware of high healthcare costs in retirement and are taking steps to prepare, such as contributing more to retirement savings and Health Savings Accounts, Fidelity found.
However, the majority of Americans say they don’t plan to take a traditional route into retirement. More people plan to “transition” into retirement, meaning they will reduce their working hours, move into freelance or contract work.
In addition, nearly one in three workers say they aren’t sure they will ever retire, and 42% of these respondents say they will have to continue working because they can’t afford to retire.
Read the original article on Investopedia
