Fidelity: 2026 Retirees May Spend $185,500 on Healthcare; Long-Term Care Could Push Costs Higher

Fidelity Investments estimates that a 65-year-old retiring in 2026 will spend an average of $185,500 on health and medical expenses, a 7.5% increase from the previous year due to rising healthcare costs, chronic conditions, and increased service utilization. The estimate assumes traditional Medicare coverage (Parts A, B, and D) and includes cost-sharing, premiums, and out-of-pocket drug costs. Notably, long-term care is excluded, despite nearly 70% of 65-year-olds needing such services. Median annual long-term care costs range from $26,000 (adult day care) to $128,000 (nursing home private room), far exceeding the median household income of $60,000 for those 65+. Fidelity warns that 54% of pre-retirees mistakenly believe Medicare covers all expenses, highlighting a critical education gap as baby boomers reach retirement age.