Fidelity Investments® Shares 25th Annual Retiree Health Care Cost Estimate, Highlighting the Importance of Incorporating Potential Health Expenses in Retirement Planning

Increasing retirement confidence driven by awareness of and preparation for health care costs

BOSTON--(BUSINESS WIRE)--Fidelity Investments^® today released its 25^th annual Retiree Health Care Cost Estimate, revealing a 65-year-old retiring in 2026 can expect to spend an average of $185,500 on health care and medical expenses throughout retirement¹. Up 7.5% from one year ago, the increase reinforces broader health care market trends, including rising prices for care, continued utilization growth, and growing costs tied to chronic conditions².

Despite the rise, this year’s estimate comes on the heels of positive news, as recent Fidelity research finds Americans’ retirement confidence is trending up: 72% say they will retire on their own terms, and nearly 3-in-4 say they have a plan in place to reach their retirement goals. This confidence is driven in part by awareness and preparation. The vast majority (81%) understand health care costs in retirement to be high, and one-quarter (26%) identify health care costs as a top retirement savings challenge.³

“Financial planning for retirement is about more than reaching a savings target, especially as retirement itself continues to evolve,” said Shams Talib, head of Fidelity Workplace Consulting. “Whether Americans fully stop working, phase into their retirement, or pursue new ways to stay engaged, health care consistently remains one of the largest expenses they will face. Providing a benchmark to consider can help them plan with purpose and more confidence.”

How the estimate breaks down

Conducted since 2002, Fidelity’s research generates an estimate designed as a long-term planning benchmark for potential health care costs a retiree will incur even with standard Medicare coverage. The figure is calculated annually to help drive awareness around one of the largest expenses Americans may face in retirement and help them make more informed decisions about saving and planning for the future.

Fidelity’s estimate assumes enrollment in Original Medicare (Parts A and B) and Medicare Part D, which includes premiums, copayments, and other out-of-pocket costs for medical care and prescription drugs throughout retirement. It does not include potential Long-Term Care expenses. The figure breaks down as follows:

• Medicare Parts B and D premiums (45%): Monthly expenses associated with Medicare Parts B and D premiums.
• Other medical expenses (48%): Medicare cost-sharing provisions such as co-payments, coinsurance, and deductibles for things like hospital visits and outpatient services, as well as excluded benefits like vision and hearing exams.
• Out-of-pocket prescription drug expenses (7%): Co-payments and amounts not covered by Medicare Part D that individuals pay out-of-pocket for generic, branded, or specialty drugs.

Even with Medicare, retirees should still plan for meaningful health care expenses over time. Yet, according to Fidelity research, 54% of pre-retirees incorrectly believe Medicare⁴ will cover all of their health expenses³. For Americans approaching Medicare eligibility, understanding the potential costs they may face—including Medicare premiums, over-the-counter medications, dental and vision, and Long-Term Care—is central to the foundation of their retirement plan.

“Medicare is a critical part of retirement health coverage, but it does not eliminate every health care expense,” said Steve Betts, head of Fidelity Health. “This estimate helps illustrate why both pre-retirees and retirees alike will benefit from carefully considering out-of-pocket expenses and how they will pay for them as they build out their retirement income strategy.”

Planning today unlocks purpose tomorrow

While the cost of health care may be overwhelming, the takeaway is actionable: the earlier someone starts to plan, the more opportunity they have to prepare for expected expenses and build in financial flexibility to support the retirement lifestyle they envision.

For those who are eligible, a health savings account (HSA) can help deliver flexibility and can be a powerful tool for retirement savings. HSAs offer a unique triple-tax advantage⁵: contributions can be made pre-tax; withdrawals for qualified medical expenses can be made tax-free; and any potential investment growth is tax-free as well.

Unlike other heath benefit accounts, HSA balances are rolled over annually, giving savers the ability to use funds for qualified medical expenses today or save them for future health care costs in retirement. Moreover, HSA balances can be invested, yet 40% of Americans with HSAs have yet to invest their funds, leaving the potential for growth on the table².

More resources for planning today and into retirement

Fidelity offers a range of resources to help individuals and employers alike better understand and prepare for health care in retirement:

• Fidelity HSA^®, rated the #1 HSA by Morningstar for spenders and savers seven years in a row⁶, offers a tax-advantaged way to save, spend, and invest for qualified medical expenses to help individuals prepare for health care costs now and in the future.
• Fidelity Medicare Services^® provides educational resources, plan comparison support, and access to licensed insurance agents for ongoing guidance and support.
• Fidelity Workplace Consulting helps employer clients through specialized consulting solutions and services, tailored to address their unique workforce challenges and drive real results across their total workplace.
• Teams at Fidelity’s Investor Centers nationwide are here to help collaborate on a financial plan, discuss goals and investment strategies, and provide guidance on investors’ unique financial situations.
• Fidelity’s Planning Retirement Page has educational resources about the solutions that can help Americans achieve their retirement goals.

About Fidelity Investments
Fidelity’s goal is to strengthen the financial well-being of our customers and deliver better outcomes for the clients and businesses we serve. Fidelity’s strength comes from the scale of our diversified, market-leading financial services businesses that serve individuals, families, employers, wealth management firms, and institutions. With assets under administration of $17.9 trillion, including managed assets of $7.0 trillion as of March 31, 2026, we focus on meeting the unique needs of a broad and growing customer base. Privately held for 80 years, Fidelity employs more than 80,000 associates across North America, Europe, and Asia-Pacific. For more information about Fidelity Investments, visit https://www.fidelity.com/about-fidelity/our-company.

Investing involves risk, including risk of loss.

The information provided here is general in nature. It is not intended, nor should it be construed, as legal or tax advice. Because the administration of an HSA is a taxpayer responsibility, customers are strongly encouraged to consult their tax advisor before opening an HSA. Customers are also encouraged to review information available from the Internal Revenue Service (IRS) for taxpayers, which can be found on the IRS Web site at www.IRS.gov. They can find IRS Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans, and IRS Publication 502, Medical and Dental Expenses (including the Health Coverage Tax Credit), online, or you can call the IRS to request a copy of each at 800.829.3676.

Fidelity does not provide legal or tax advice. The information herein is general in nature and should not be considered legal or tax advice. Consult an attorney or tax professional regarding your specific situation.

Views expressed are as of the date indicated, based on the information available at that time, and may change based on market or other conditions. Unless otherwise noted, the opinions provided are those of the speaker or author and not necessarily those of Fidelity Investments or its affiliates. Fidelity does not assume any duty to update any of the information.

We do not offer every plan available in your area. Please contact Medicare.gov or call 1-800-MEDICARE (TTY users should call 1- 877-486-2048), 24 hours a day/7 days a week to get information on all of your options.

Fidelity Medicare Services is operated by Fidelity Health Insurance Services, LLC (“FHIS”), and FMR LLC (“FMR”) is the parent company of FHIS. Unless otherwise indicated, the information and items published in this document are for informational purposes only and are not intended as tax, legal, or investment advice.

The services described are provided by FHIS. In this capacity, FHIS acts as an insurance broker or agent (collectively referred to as a “Producer”). FHIS and its representatives are appropriately licensed in all states in which they conduct business.

FHIS and its producers are certified representatives of insurance carriers that provide Medicare Supplement insurance as well as are certified representatives of Medicare Advantage (HMO, PPO and PFFS) organizations (and stand-alone prescription drug plans) with a Medicare contract.

The insurance products are issued by third-party insurance companies, which are unaffiliated with FHIS and FMR.

The FHIS organization may earn a commission paid by the insurance company based on your enrollment in a health plan, but FHIS agents and representatives are generally not compensated based on your enrollment in a health plan and do not receive commissions from third-party insurance companies.

ATTENTION: Medicare has neither reviewed nor endorsed the information in this document. Fidelity Medicare Services, FHIS, and FMR are not connected with or endorsed by the U.S. government or the Centers for Medicare & Medicaid Services.

For a complete list of available plans, please contact 1-800-MEDICARE (TTY users should call 1-877-486-2048) 24 hours a day/7 days a week or consult www.medicare.gov.

This is a solicitation for insurance.

Not all plans offer all of these benefits. Benefits may vary by carrier and location. Limitations and exclusions may apply.

Enrollment in a plan may be limited to certain times of the year unless you qualify for a Special Enrollment Period or you are in your Medicare Initial Enrollment Period.

FMS’ customer service number is 1-833-886-0033 (TTY: 711). Calling this number will direct you to a licensed insurance agent or a support associate.

All trademarks and service marks in this document belong to FMR or an affiliate, except third-party trademarks and service marks, which are the property of their respective owners.

Fidelity Health Insurance Services, LLC, Corporate Trust Center, 1209 Orange Street, Wilmington, DE 19801

© FMR LLC. All rights reserved

Fidelity Health Insurance Services
Corporate Trust Center, 1209 Orange Street, Wilmington, DE 19801

Fidelity Brokerage Services LLC, Member NYSE, SIPC
900 Salem Street, Smithfield, RI 02917

Fidelity Distributors Company LLC,
900 Salem Street, Smithfield, RI 02917

National Financial Services LLC, Member NYSE, SIPC,
245 Summer Street, Boston, MA 02110

1272084.1.0
© 2026 FMR LLC. All rights reserved

___________________________________

^1 Estimate based on a single person retiring in 2026, 65-years-old, with life expectancies that align with Society of Actuaries' RP-2014 Healthy Annuitant rates projected with Mortality Improvements Scale MP-2020 as of 2022. Actual assets needed may be more or less depending on actual health status, area of residence, and longevity. Estimate is net of taxes. The Fidelity Retiree Health Care Cost Estimate assumes individuals do not have employer-provided retiree health care coverage, but do qualify for the federal government’s insurance program, original Medicare. The calculation takes into account Medicare Part B base premiums and cost-sharing provisions (such as deductibles and coinsurance) associated with Medicare Part A and Part B (inpatient and outpatient medical insurance). It also considers Medicare Part D (prescription drug coverage) premiums and out-of-pocket costs, as well as certain services excluded by original Medicare. The estimate does not include other health-related expenses, such as over-the-counter medications, most dental services and long-term care.

^2 Centers for Medicare & Medicaid Services National Health Expenditure Projections, 2025-34

^3 The 2026 Fidelity State of Retirement Planning study presents the findings of a national online survey consisting of 2,015 U.S. adults who are ages 18-79, are sole decision-makers or share responsibility with someone else in the household for investment decisions, and have an IRA, 401(k), annuity, pension, Health Savings Account (HSA), or brokerage account. Interviewing was conducted December 2-8, 2025, by Big Village, which is not affiliated with Fidelity Investments. The results may not be representative of all adults meeting the same criteria as those surveyed.

^4 Full Medicare coverage. Combination of Original Medicare (Parts A & B), Medicare Part D, and Medigap.

^5 With respect to federal taxation only. Contributions, investment earnings, and distributions may or may not be subject to state taxation.

^6 Morningstar rated 10-11 retail HSA providers for HSAs as spending account to cover current medical costs and HSAs as an investment account to save for future medical expenses. Results published in 2019, 2020, 2021, 2022, 2023, 2024, and 2025 “Health Savings Account Landscape.