Fidelity says 2026 retirees may spend $185,500 on healthcare. One category may push those costs higher - CNBC

What the report says

CNBC reported that Fidelity Investments estimates a 65-year-old retiring in 2026 may spend an average of $185,500 on health and medical expenses over retirement. The estimate is 7.5% higher than Fidelity’s figure for last year’s retirees, with the firm citing rising health-care costs, more spending tied to chronic conditions and greater use of medical services.

The estimate assumes the retiree is enrolled in traditional Medicare, including Part A hospital coverage, Part B medical coverage and Part D prescription drug coverage. CNBC said Fidelity’s calculation attributes 48% of the projected costs to Medicare cost-sharing such as deductibles, copayments and coinsurance; 45% to monthly premiums for Parts B and D; and 7% to out-of-pocket drug costs not covered by Part D. Fidelity also found that 54% of pre-retirees wrongly believe Medicare will cover all of their health expenses.

A major caveat is that Fidelity’s total does not include long-term care, which can substantially increase retirement costs. CNBC cited federal data indicating that someone turning 65 has about a 70% chance of needing some type of long-term care services, and noted AARP findings that those expenses are rising faster than inflation and older adults’ incomes.

The report matters as many baby boomers reach traditional retirement age and make decisions about savings, Medicare coverage and out-of-pocket care. CNBC also highlighted health savings accounts as one planning tool for eligible workers, while noting that actual retirement health costs vary widely depending on a person’s health, income, coverage choices and care needs.