Healthcare costs in retirement are among the larger expenses many households face, and one of the harder ones to estimate. Fidelity’s 2026 estimate suggests a 65-year-old retiring this year may spend an average of $185,500 on health and medical expenses over the course of retirement, not counting long-term care. For a couple, the combined figure is roughly $371,000.
Those are averages, and your own number could look quite different depending on your health, the coverage you choose, and your income. Below, we walk through where the money tends to go, what Medicare covers and leaves out, how income-based surcharges work, and planning ideas that a financial advisor in Long Beach may talk through with you.
Key takeaways
• Fidelity’s 2026 estimate is $185,500 for one person and about $371,000 for a couple, up 7.5% from 2025. Long-term care is not included.
• Original Medicare pays a large share of costs but has no annual out-of-pocket maximum. After the deductible, you generally pay 20% of Part B services.
• Higher-income retirees may pay an income-related surcharge (IRMAA), pushing the 2026 Part B premium from $202.90 up to as much as $689.90 a month.
• Long-term care sits outside the Fidelity estimate. The 2025 national median for a private nursing home room was $129,575 a year.
• Tools such as health savings accounts (HSAs), tax coordination and coverage reviews can help households prepare, and many are worth discussing before retirement begins.
How much do healthcare costs in retirement average?
Fidelity Investments has published a retiree healthcare cost estimate every year since 2002, when the figure was $80,000. In July 2026, its 25th annual estimate put the average at $185,500 for a single 65-year-old retiring in 2026, a 7.5% increase over the $172,500 estimate from 2025. Fidelity’s figure for a couple retiring at 65 is roughly $371,000.
The estimate assumes enrollment in Original Medicare (Parts A and B) plus Part D drug coverage, and it assumes no employer-provided retiree health coverage. It is net of taxes. Here is how the $185,500 breaks down:
The estimate leaves out long-term care, over-the-counter medications and most dental services. Fidelity also projects long-term healthcare inflation of 5.8%, compared with a projected Social Security cost-of-living adjustment averaging 2.4%. In 2026 specifically, the Part B premium rose 9.7%, which absorbed nearly a third of the roughly $56 monthly increase from the 2.8% cost-of-living adjustment for the average retired worker.
If you are still building your savings, our look at average retirement savings by age and average 401(k) balances by age can help you see how a figure like $185,500 compares with typical account balances.
The three phases of healthcare costs in retirement
It can help to think of retirement healthcare spending in three overlapping phases rather than one lump sum.
Phase 1: The years before Medicare (before age 65)
Medicare eligibility generally begins at 65. Someone who stops working at 55 faces roughly a decade of coverage to arrange on their own, a topic we cover in our guide to retiring at 55. Options people commonly explore include employer retiree coverage (where offered), COBRA continuation coverage (typically available for a limited period), a spouse’s plan, or an individual plan through Covered California.
Individual coverage can be costly in these years. One analysis of 2026 average monthly health insurance costs puts the figure near $1,598 at age 60 and $1,766 at age 64 and older. Fidelity’s $185,500 estimate begins at 65, so pre-Medicare costs would be in addition to it.
Phase 2: The Medicare years (65 and older)
Once Medicare begins, spending shifts toward premiums, deductibles, coinsurance and prescription drugs. The next two sections cover the 2026 numbers and the income-based surcharge that can raise them.
Phase 3: The later-life care years
Costs for assisted living, in-home help or nursing home care can arrive late in retirement and are largely outside Original Medicare. We cover those figures below.
Medicare costs in 2026: what the numbers look like
Medicare has several parts, and your total depends on the combination you choose. These are the 2026 amounts published by the Centers for Medicare & Medicaid Services (CMS) and compiled by the National Council on Aging:
At the standard rate, the Part B premium alone comes to about $2,435 a year for one person, or about $4,870 for a couple, before any drug plan, supplement or surcharge. Most people have the premium deducted from their Social Security payment, so it can be easy to overlook when planning. The average Social Security retirement benefit is about $2,071 a month in 2026, which means the standard Part B premium is close to 10% of it. A Social Security analysis can show how claiming age and Medicare deductions fit together.
Original Medicare with Medigap vs. Medicare Advantage
Neither approach is right for everyone. Original Medicare with a Medigap policy and a stand-alone Part D plan tends to offer broader provider choice and more predictable costs, with higher monthly premiums. Medicare Advantage plans often have lower premiums but come with provider networks and copays that vary by service. Plans and prices differ by county and change every year, so many people compare options during the annual enrollment period, which opens October 15 and runs through December 7.
IRMAA: the income surcharge many retirees overlook
The income-related monthly adjustment amount, or IRMAA, adds a surcharge to Part B and Part D premiums for higher-income households. It is based on modified adjusted gross income (MAGI) from two years earlier, so your 2026 premium reflects your 2024 tax return. The 2026 total monthly Part B premiums are:
Part D drug plans carry their own IRMAA surcharge in addition to these amounts. The brackets work like cliffs: crossing a threshold by even one dollar can trigger the higher premium for the full year.
That is why income planning matters here. IRA withdrawals, Roth conversions, capital gains, and the annual withdrawals the IRS sets for most traditional retirement accounts (starting at age 73 or 75, depending on birth year) all count toward MAGI. Some households spread conversions or withdrawals across several years to stay clear of a bracket edge, though the right approach depends on the full tax picture. If your income drops because of a life-changing event such as retirement, the Social Security Administration has a process to request a new IRMAA determination. Our retirement income strategy guide and income planning services go deeper on how withdrawals and taxes interact.
What Medicare typically does not cover
Medicare covers a wide range of services, but common gaps include:
• Routine dental care, eyeglasses and hearing aids
• Most long-term care, including custodial care at home or in assisted living
• Some prescription drug costs, depending on the plan
• Copays, coinsurance and deductibles, which can add up under Original Medicare because Part B has no annual out-of-pocket maximum
Our overview of common financial mistakes that can derail retirement includes how these gaps catch some retirees off guard.
Long-term care costs: the largest unknown
Estimates of how many people will use long-term care vary by source and definition. One commonly cited Department of Health and Human Services figure suggests someone turning 65 has a nearly 70% chance of using some form of long-term care services, though the amount and duration differ widely from person to person. The 2025 CareScout Cost of Care Survey reported these national median costs:
State-level surveys generally place California costs above these national medians. Households often weigh several ways to prepare, including dedicated savings, long-term care or hybrid life insurance policies, home equity, and in some cases Medicaid eligibility rules. Because this topic connects to beneficiaries, trusts and family decisions, it is often discussed alongside life and estate planning.
Ways to plan for healthcare costs in retirement
There is no single approach, and each idea below carries trade-offs. These are topics many households explore with a planner:
1. Give healthcare its own line in the retirement budget. Because projected healthcare inflation (5.8% in Fidelity’s model) outpaces projected cost-of-living adjustments (2.4%), some plans model healthcare costs growing faster than general expenses. This fits within a broader retirement planning review.
2. Consider a health savings account while eligible. For 2026, the contribution limits are $4,400 for self-only coverage and $8,750 for family coverage, plus a $1,000 catch-up at age 55 and older. Contributions to an HSA stop once you enroll in Medicare, and withdrawals for qualified medical expenses are tax-free at the federal level. Fidelity research found that 40% of HSA owners have not invested their balances. California does not follow the federal tax treatment of HSAs, so a tax professional can explain the state impact.
3. Coordinate withdrawals and conversions with IRMAA. Moving money from a traditional account to a Roth in lower-income years is one strategy some households evaluate. A conversion raises taxable income in the year it occurs, which can affect Medicare premiums two years later. An IRA rollover can be one step in consolidating accounts before that kind of review.
4. Review the timing of Social Security. Claiming age affects both your benefit and how much income is available to cover Medicare premiums that are deducted from it.
5. Compare coverage every year. Plan prices, networks and drug formularies change annually. The October 15 to December 7 enrollment window is a regular checkpoint.
6. Discuss long-term care funding early. Premiums for long-term care insurance and health underwriting can change with age, so some people look at options in their 50s or early 60s.
Long Beach and California considerations
Where you retire shapes the numbers. A few California-specific points to keep in mind:
• State taxes. California does not tax Social Security benefits, but IRA and 401(k) withdrawals are taxed as ordinary income at rates that reach 13.3%. That can influence MAGI and, in turn, Medicare premiums. See our explainer on whether California taxes Social Security.
• Pre-65 coverage. Covered California offers individual plans for people who retire before Medicare begins.
• Local plan choices. Medicare Advantage plans and networks are set at the county level, so the options available in Los Angeles County may differ from those elsewhere. HICAP, California’s free Medicare counseling program, can help with plan comparisons.
• Medigap switching. California has a “birthday rule” that gives some Medigap holders a limited window each year to change to a plan of equal or lesser benefits without medical underwriting. Confirm the details with the California Department of Insurance or HICAP.
Working with a local financial advisor in Long Beach can add this regional context to the national averages, including how state taxes, housing costs and local care costs fit into your plan.
Frequently asked questions
How much might I budget for healthcare in retirement?
There is no single figure. Fidelity’s 2026 benchmark is $185,500 for one person and roughly $371,000 for a couple, excluding long-term care. Your own budget may be higher or lower depending on your health, coverage choices, location and income. A planner can build scenarios using different assumptions.
Does Medicare cover all healthcare costs in retirement?
No. Medicare helps with many costs, but you may still pay premiums, deductibles, coinsurance and copays. Dental, vision, hearing and most long-term care are generally outside Original Medicare.
How much does Medicare cost per month in 2026?
Most people pay $0 for Part A and the standard Part B premium of $202.90 a month. Drug coverage, a Medigap or Medicare Advantage premium, and any IRMAA surcharge are added in addition.
What is IRMAA?
IRMAA is an income-related surcharge on Medicare Part B and Part D premiums. It is based on your tax return from two years earlier, and the brackets are cliff-style, so a small change in income can move you into a higher tier.
Is Medigap or Medicare Advantage the better choice?
It depends on your health, budget, preferred doctors and tolerance for variable costs. Medigap tends to be more predictable with higher premiums, while Medicare Advantage often has lower premiums with network rules and varying copays.
Can Social Security cover my healthcare costs?
Social Security can help, but the Part B premium is usually deducted from the benefit before it reaches you, and other costs such as supplements, drugs and uncovered services add to the total. With an average benefit of about $2,071 a month in 2026, healthcare can take a meaningful share of that income.
When does Medicare start?
Most people become eligible at 65. The initial enrollment period runs for seven months around your 65th birthday, and late enrollment penalties may apply in some cases.
Bringing it together
Healthcare costs in retirement involve several moving parts: a pre-Medicare gap for early retirees, Medicare premiums and cost-sharing, an income-based surcharge, and the possibility of long-term care. Looking at these together, rather than one at a time, can make the overall picture easier to understand.
If you would like help putting numbers to your own situation, Randall Wealth Management Group offers a complimentary consultation. As a financial advisor in Long Beach, our team can walk through your income sources, Medicare timing and long-term planning questions. You can also browse our full list of retirement and wealth management services or learn more about Trevor Randall.
Sources
• Fidelity Investments, 25th Annual Retiree Health Care Cost Estimate (July 2026), as reported by CNBC and TheStreet
• Centers for Medicare & Medicaid Services, 2026 Medicare Part B premium and deductible announcement (Federal Register notice, November 2025)
• Medicare.gov, 2026 Medicare Costs fact sheet
• National Council on Aging, What You’ll Pay in Out-of-Pocket Medicare Costs in 2026
• CareScout (Genworth) 2025 Cost of Care Survey
• IRS Revenue Procedure 2025-19 (2026 HSA limits)
• Kiplinger, Average Cost of Health Care by Age and US State
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