Health care is the retirement expense people find hardest to predict. You can estimate housing and groceries with some confidence. Doctor visits, prescriptions, dental work and hospital stays are harder to plan for, and they tend to grow as the years go on.
Fidelity estimated in 2024 that a 65-year-old couple would need about $330,000 set aside after taxes to cover health care costs through retirement, not counting long-term care. That lifetime total is a useful headline, but it is hard to budget with. This guide breaks health spending down by age and by year, using government data, so you can plan it like any other monthly bill.
What households actually spend on health care by age
The Bureau of Labor Statistics tracks health spending by age of the head of household, including insurance premiums, medical services, prescription drugs and medical supplies.
| Age of head of household | Health spending per year (2024) | Per month | Share of total spending |
| 45 to 54 | $6,748 | $562 | Lower share, as other costs are higher |
| 55 to 64 | $6,711 | $559 | Rising |
| 65 to 74 | $7,715 | $643 | About 12% |
| 75 and older | $7,918 | $660 | About 14% |
Source: BLS Consumer Expenditure Surveys, 2024 (via FRED).
Two things are worth noting. First, total spending falls after 75, but health spending does not, so health takes a bigger slice of the budget every decade. Second, these are household averages. A couple will usually spend more than a single person, and one serious illness can change the picture in a single year.
Before Medicare: ages 55 to 64
The years before 65 can be the most expensive for people who retire early. Without employer coverage, you have three main options:
- COBRA, which lets you keep your former employer’s plan for a limited period, usually 18 months. You pay the full premium plus a small fee, which often comes as a shock.
- An ACA Marketplace plan, with premiums based on age, location and income. Subsidies depend on your income, so how you draw down savings in these years can affect what you pay.
- A working spouse’s plan, if available.
If you are in your 50s and thinking about retiring before 65, price marketplace coverage for your ZIP code at HealthCare.gov now. It is often the single biggest unknown in an early retirement budget.
At 65: what Medicare costs in 2026
Medicare is the foundation of health coverage for most people 65 and older, but it is not free.
| 2026 Medicare cost | Amount |
| Part B standard premium | $202.90 a month |
| Part B annual deductible | $283 |
| Part A hospital deductible, per benefit period | $1,736 |
| Part A hospital coinsurance, days 61 to 90 | $434 a day |
| Skilled nursing facility coinsurance, days 21 to 100 | $217 a day |
| Part D out-of-pocket cap on covered drugs | $2,100 a year |
| Part A premium | $0 for most people with 40 quarters of work |
Source: Centers for Medicare and Medicaid Services.
Original Medicare has no yearly limit on what you pay out of pocket. That is why most people add one of two things:
- A Medicare Supplement (Medigap) policy plus a Part D drug plan. Plan G is the most popular for new enrollees. It covers almost everything Original Medicare does not, except the Part B deductible. Premiums vary widely by state and age.
- A Medicare Advantage plan, which often has low or no extra premium and includes drug coverage, but uses networks and has copays up to a yearly out-of-pocket maximum.
A typical yearly budget at 65 to 74
Here is a sample for one person on Original Medicare with a Medigap Plan G policy and a drug plan. The Medigap and Part D amounts are estimates.
| Cost | Per month | Per year |
| Part B premium | $203 | $2,435 |
| Medigap Plan G (estimate) | $160 | $1,920 |
| Part D drug plan (estimate) | $40 | $480 |
| Part B deductible | $283 | |
| Dental, vision and hearing (estimate) | $75 | $900 |
| Prescription copays and other costs (estimate) | $40 | $480 |
| Total | about $541 | about $6,500 |
For a couple, roughly double it, to around $13,000 a year. That lines up closely with Fidelity’s lifetime estimate spread over about 25 years.
At 75 and beyond
Costs usually rise in your late 70s and 80s, for three reasons:
- Medigap premiums often rise with age. Most policies are priced on your current age, so premiums climb every year as well as with medical inflation.
- You use more care. More prescriptions, more specialist visits and more procedures.
- Costs Medicare does not cover. Hearing aids, dental work such as crowns and implants, and help at home can add thousands of dollars a year.
Beyond that is long-term care, which is a separate and much larger risk. Assisted living has a national median cost of $6,200 a month, and a shared nursing home room about $315 a day. Medicare does not pay for ongoing custodial care. See our guide to long-term care costs by state.
Higher incomes pay more for Medicare
If your income is above certain levels, Medicare Part B and Part D premiums rise through a surcharge called IRMAA. In 2026:
| Income (single) | Income (married filing jointly) | Monthly Part B premium |
| $109,000 or less | $218,000 or less | $202.90 |
| $109,001 to $137,000 | $218,001 to $274,000 | $284.10 |
| $137,001 to $171,000 | $274,001 to $342,000 | $405.80 |
| $171,001 to $205,000 | $342,001 to $410,000 | $527.50 |
| $205,001 to $499,999 | $410,001 to $749,999 | $649.20 |
| $500,000 or more | $750,000 or more | $689.90 |
Income is based on your tax return from two years earlier. Part D surcharges add $14.50 to $91.00 a month on top of your drug plan premium.
How to prepare, depending on your age
In your 40s and 50s
- Use a Health Savings Account if you have a high-deductible plan. HSA money goes in tax-free, grows tax-free and comes out tax-free for medical costs, including Medicare premiums after 65. It is one of the best ways to save for retirement health costs.
- Take care of dental work while you have employer coverage. Dental costs can be much higher in retirement.
- Consider pricing long-term care insurance. Premiums are lower when you buy younger and healthy.
In your 60s
- Sign up for Medicare on time. Missing your enrollment window can mean a permanent late penalty on Part B and Part D.
- Buy Medigap during your open enrollment period. For six months after you enroll in Part B at 65 or older, insurers must sell you any Medigap policy they offer without health questions. After that, in most states, they can decline you or charge more.
- Compare plans every fall. Drug plan and Medicare Advantage costs change every year. Open enrollment runs October 15 to December 7.
In your 70s and 80s
- Review your Medigap premium. If it has risen sharply, ask whether your state allows you to switch plans without health questions.
- Check for help. Medicare Savings Programs and Extra Help with drug costs lower expenses for people with limited income and assets.
Frequently asked questions
How much should I budget for health care in retirement? A single person on Original Medicare with a supplement and drug plan can expect about $6,000 to $7,000 a year in their late 60s, before dental work, hearing aids or long-term care. Costs usually rise with age.
Does Medicare cover dental and hearing aids? Original Medicare does not cover routine dental care, dentures or most hearing aids. Some Medicare Advantage plans offer limited coverage.
How much is Medicare per month in 2026? The standard Part B premium is $202.90 a month. Most people pay no premium for Part A. Drug plans and supplements are extra.
What is Fidelity’s retiree health care cost estimate? Fidelity’s 2024 estimate was about $330,000 for a 65-year-old couple, after taxes, not including long-term care.
Sources
- U.S. Bureau of Labor Statistics, Consumer Expenditure Surveys 2024, health care spending by age (via FRED)
- Centers for Medicare and Medicaid Services, 2026 Medicare Parts A and B premiums and deductibles
- Medicare.gov, Part D and Medigap information
- Fidelity Investments, Retiree Health Care Cost Estimate (2024)
- CareScout, Cost of Care Survey 2025
- HealthCare.gov, Marketplace coverage information
Figures are averages and estimates. Your costs depend on your health, plan and location. This article is general information, not medical or financial advice.
