Planning for Health Care in Retirement: The Six-Figure Line Item Most People Forget
Imagine you and your spouse have finally mapped out your retirement budget. The mortgage
will be paid off. The kids are launched. You have penciled in some travel, a little golf, maybe a
place near the grandchildren. It feels manageable.
Then someone asks a simple question: “What did you put down for health care?”
For a lot of thoughtful, well-prepared people, that line is either blank or badly underestimated.
Here is the number worth knowing. Fidelity’s 2025 Retiree Health Care Cost Estimate puts the
average lifetime cost for a single 65-year-old retiring this year at $172,500.1 For a couple, you
can roughly double it. That figure is net of taxes, and it assumes you are enrolled in Medicare. It
is not a worst-case scenario. It is the average.
What surprises people most is that Medicare does not make this go away. Medicare is a
foundation, not a full roof. It comes with monthly premiums, deductibles, and coinsurance. And
it leaves out things many people assume are covered — most routine dental, vision, and hearing care, and the big one, extended long-term care.
It also helps to see the trend. When Fidelity first published this estimate in 2002, the figure was
$80,000. Today it is more than double that. Health care has quietly been one of the most
reliable sources of rising costs in a retiree’s life, and there is little reason to expect that to
reverse.
Part of why this catches people off guard is timing. When you are healthy at 65, it is easy to
picture retirement the way it looks today — active, independent, light on doctor visits. But this is
a lifetime figure, spread across decades, and the heaviest costs usually arrive late, exactly whenother resources may be running thinner. Sound planning is really just a refusal to let your
healthiest year set the budget for your most expensive one.
None of this is meant to alarm you. The point is the opposite. A cost you can see is a cost you
can plan for. A cost you ignore is the one that quietly derails an otherwise solid plan.
Consider a simple illustration. A couple who each set aside even a modest amount earmarked
for health care — and let it grow over a working career — arrive at retirement with a dedicated
cushion instead of a question mark. The dollars are the same dollars. The difference is that they
were named, planned for, and protected ahead of time, rather than scrambled for in a hard
year.
So what does planning for it actually look like? It means treating health care as its own line item,
not a rounding error. It means understanding how and when you will enroll in Medicare, and
what a supplement or Advantage plan would and would not cover. It means thinking honestly
about long-term care — how you would pay for it, and whether insurance, savings, or a blend
fits your situation. And for those still working, it can mean funding a Health Savings Account,
one of the few accounts that is triple tax-advantaged when used for medical costs.
As we often say, the goal is not to predict the future. The goal is to be prepared for it. A health
care surprise is far less unsettling when you have already given it a name and a number inside
your plan.
Your trusted advisor can help you fold health care into the bigger picture — coordinating it with
your income plan, your tax situation, and your insurance coverage — so that one large,
predictable expense does not turn into an unwelcome shock.
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