Milliman Retiree Health Cost Index: A 65-year-old couple needs $418,000 in savings for healthcare in retirement

SEATTLE--(BUSINESS WIRE)--Milliman, Inc., a premier consulting and actuarial firm, today released its 2026 Retiree Health Cost Index (RHCI), which projects how much money a healthy 65-year-old can expect to spend on healthcare in retirement. The index explains how factors like where a person lives, when they retire, and which coverage they choose can impact the total cost of premiums and out-of-pocket expenses.

For 2026, we project a healthy 65-year-old couple retiring this year will need to save on average:

• $418,000 under Original Medicare with Medigap Plan G plus Part D coverage (Medigap), an increase of $30,000 (+7.7%) from 2025. The couple is projected to spend an average of $637,000 on healthcare expenses over the course of their remaining lifetime.

• $211,000 with Medicare Advantage plus Part D (MAPD), an increase of $28,000 (+15.3%) from 2025. The couple is projected to spend an average of $320,000 on healthcare expenses over the course of their remaining lifetime.

Several factors are driving this year's increases. On the Medigap side, higher Medigap and Medicare Part B premiums plus an uptick in projected long-term healthcare inflation are the primary contributors, partially offset by lower Part D premiums.

On the MAPD side, most states saw premium increases in 2026, reflecting rising medical costs and plan adjustments following changes to Part D. In addition, reduced supplemental benefits and higher cost-sharing requirements are driving increases in expected out-of-pocket costs.

Despite the index’s largest single-year increase in its short history, the longer-term trend remains moderate, with roughly 3% average annual growth in the Medigap pathway and 2% average annual growth in the MAPD pathway between 2022 and 2026.

"Healthcare costs in retirement don't move in a straight line, and 2026 is a good reminder of that," said Robert Schmidt, co-author of the RHCI. "Out of pocket costs are an important part of retirement planning, and how much a person spends will depend on a variety of health and other factors.”

To view the complete 2026 Retiree Health Cost Index, visit https://www.milliman.com/retireehealthcosts.

About Milliman

Milliman leverages deep expertise, actuarial rigor, and advanced technology to develop solutions for a world at risk. We help clients in the public and private sectors navigate urgent, complex challenges—from extreme weather and market volatility to financial insecurity and rising health costs—so they can meet their business, financial, and social objectives. Our solutions encompass insurance, financial services, healthcare, life sciences, and employee benefits. Founded in 1947, Milliman is an independent firm with offices in major cities around the globe. Visit us at milliman.com.