Fidelity just released an update to their estimate of how much it will cost a retiree across retirement, per person, in after tax dollars. According to Fidelity, you can expect to spend an average of $185,500 on health care and medical expenses throughout retirement. Most people don’t do a thorough budget until they are nearing retirement and then they get serious about all categories. This is one area that takes many by surprise because the cost is normally taken out of pay and just seen as a line item on a pay stub. Also, there are new options under Medicare that many have never seen before. Medicare supplements have a cost but it’s basically prepaying for medical care.
I generally see the cost here in Dayton, Ohio landing about $600 per person per month for health care. It’s a similar estimate in my mind if you get a supplement or an advantage plan because if you plan for the worst case scenario, the dollars come out fairly close. For example, in 2026, most people pay $202.90 for part B, a supplement for someone turning 65 is around $175 per month and there is a max for prescriptions for the year of $2100, or roughly $200 per month. Add vision and dental coverage for around $50 per month and your total max cost is about $628 per month. That is worst case scenario with a supplement. You could be worse of in a worst case scenario with an advantage plan. If you are on a high quality advantage plan, many have max out of pocket in the $5000 range so that would be $400 per month, plus part B of $202.90 and max prescription cost of $200 and you worst case scenario is about $800 per month.
The difficulty is with projecting true needs and using the crystal ball that nobody has. For example, if you have a very low usage year, the supplement would still cost you about $428 per month and the advantage plan $202.90 per month. I’ll lean on Fidelity here and just relay the cost they compiled across retirement as a total of $185,000. It’s a big number not a lot of people pay attention to until they are on the cusp of retirement.
I generally see the cost here in Dayton, Ohio landing about $600 per person per month for health care. It’s a similar estimate in my mind if you get a supplement or an advantage plan because if you plan for the worst case scenario, the dollars come out fairly close. For example, in 2026, most people pay $202.90 for part B, a supplement for someone turning 65 is around $175 per month and there is a max for prescriptions for the year of $2100, or roughly $200 per month. Add vision and dental coverage for around $50 per month and your total max cost is about $628 per month. That is worst case scenario with a supplement. You could be worse of in a worst case scenario with an advantage plan. If you are on a high quality advantage plan, many have max out of pocket in the $5000 range so that would be $400 per month, plus part B of $202.90 and max prescription cost of $200 and you worst case scenario is about $800 per month.
The difficulty is with projecting true needs and using the crystal ball that nobody has. For example, if you have a very low usage year, the supplement would still cost you about $428 per month and the advantage plan $202.90 per month. I’ll lean on Fidelity here and just relay the cost they compiled across retirement as a total of $185,000. It’s a big number not a lot of people pay attention to until they are on the cusp of retirement.