Health care could turn out to be a U.S. retiree’s biggest expense, according to a new report. And finding the cash to pay for good health care won’t be easy.
The data comes from Fidelity Investments’ 25th annual Retiree Health Care Estimate, which shows the average 65-year-old retiree is staring down a health care tab of $185,000 throughout retirement.
That figure is up 7.5 percent from last year’s Fidelity health care cost report, a number that’s far ahead of the pace of inflation, which stands at 3.5 percent as of June 2026.
Here’s How Retirees Can Pare Down High Health Care Expenses
Health care and household finance experts say $185,000 in retirement health care expenses is a big mountain to climb for people living on a fixed income, but there are good ways before and during retirement to stem the financial tide. These three strategies should save significant cash for retirees.Get ahead of the cost curve with long-term health care insurance
Prior to retirement, one of the greatest actions individuals may undertake to protect themselves from potentially devastating long-term care costs is to start making plans for long-term care today—before you need them.“The longer you wait to address these issues—until you develop Alzheimer's Disease, Parkinson's Disease, etc., the fewer planning options available to you,” Evan Farr, retirement planner and founder at Farr Law Firm P.C., told NTD News. “Therefore, consider evaluating long-term care insurance, hybrid life insurance products with built-in long-term care riders, and/or Medicaid Asset Protection Planning before you require any assistance.”
Join a concierge doctor practice
Kevin Quinn, an estate planning attorney at Legacy Counselors, PC, said he’s seeing more retired clients turning to concierge physician practices.“It can be less expensive ultimately because the quality of medical advice and the comfort with being honest and effective with your physical health increases,” Quinn told NTD. “When you have a concierge physician who can help you navigate the health care system and understand you and your needs, it can lead to much better outcomes.”
Lean in hard on family support
One big opportunity to shave health care expenses in retirement is planning before a crisis forces expensive decisions. “We've seen families who waited until a hospitalization or fall to discuss care options, leaving them with fewer choices and higher costs,” Daniel Preston, founder of LiveInCare USA, told NTD. “Preparing the home for aging, maintaining preventive health care, organizing legal and financial documents, and having early conversations with family about future care preferences all make it easier to avoid rushed, high-cost decisions later.”Good family and even strong social connections can also address small health care problems before they become major ones for older Americans. “For many U.S. seniors, remaining safely at home with appropriate support can delay or avoid much more expensive forms of care,” Preston said.
Don’t Make These Big Health Care Mistakes in Retirement
One of the most common mistakes with health care expenses in retirement isn't necessarily spending too much; it's planning too late. “Many families assume they'll know what to do when the time comes, but healthcare decisions are hardest when made during a crisis,” Preston noted.Waiting until a loved one can no longer manage independently often limits available options and increases costs. “The families who navigate aging most successfully are usually the ones who started planning before they actually needed care,” he said.
Another costly error made by retirees is misunderstanding how Medicare works and the role it plays in paying for long-term care costs.
“Many families assume that their private insurance and out-of-pocket payments will cover their nursing home or assisted living care expenses,” Farr said. “However, Medicare will only cover very limited amounts of skilled nursing care.”
Consequently, unless individuals understand the difference between Medicare and Medicaid and plan accordingly, families can quickly accumulate hundreds of thousands of dollars in private spending before they realize that Medicaid, not Medicare, is the largest payer for long-term custodial care in this country. “Unfortunately, by this time, most planning opportunities will have already been lost,” Farr added.