Rising Medical Costs for Retirees
During a discussion on “Making Money,” host Charles Payne spoke with Rebecca Walser, the president of Walser Wealth Management, about the savings and retirement landscape for Americans.
A retiree turning 65 in 2025 is expected to spend an average of $172,500 on medical costs over their retirement. This represents a 4% increase from the previous year, according to Fidelity’s 2025 retirement health expenditure projections. It’s noteworthy, considering that medical expenses have been on the rise since Fidelity first estimated costs at $80,000 back in 2002.
The report sheds light on some concerning trends. A striking 17% of respondents mentioned they hadn’t taken any steps to plan for their healthcare costs in retirement. Furthermore, one in five indicated they wouldn’t think about their medical needs after retiring. That number is, perhaps surprisingly, higher among Gen X, with about 25% falling into this category.
Concerns Over Medical Expenses
Fidelity’s estimates also consider enrollment figures for Medicare Parts A and B, plus Medicare Part D. Yet, long-term care expenses aren’t accounted for in these figures. Even with Medicare coverage, retirees are still responsible for costs related to premiums, out-of-pocket medications, dental and vision care, and long-term services. While Medicare Advantage plans can help with some of these costs, they come with their own monthly premiums.
Chandler Riggs, a financial consultant with Fidelity, pointed out that escalating healthcare costs are influenced by a variety of factors. Longevity and healthcare inflation rates that outpace general inflation are particularly impactful.
Though it may sound a bit daunting, Riggs described this as a “critical wake-up call for all generations.” He emphasized the necessity of early planning, stating, “It’s not merely a benchmark for retirement readiness; it underscores the importance of starting as soon as possible.”
Young Americans’ Trust in Social Security Declines
Matthew Gregory, planning director at The Bahnsen Group, remarked that individuals are accustomed to covering meaningful costs out of their paychecks, so thinking about supplemental Medicare plans often doesn’t cross their minds. He urges caution, as Medicare doesn’t cover most long-term care costs, which can accumulate quickly.
Riggs echoed this thought, suggesting that those receiving employer-based health coverage might overlook the expenses they’ll face once they retire. For many nearing retirement, these revelations could lead to second-guessing whether their savings will suffice, if their funds meet their goals, or even if they might need to delay retiring altogether.
He noted that some individuals may find themselves settling for less coverage than they’re used to or relying on family members to fill any gaps.
Interestingly, these discussions come on the heels of AARP research indicating a waning confidence in Social Security. Once seen as a fundamental safety net for retirees, trust in the system is on the decline.
Latest data shows that Americans’ confidence in Social Security dropped from 43% in 2020 to just 36% in 2025, marking its lowest point in recent years.
Despite these unsettling trends, Riggs maintained that it’s never too late to take steps toward a more secure financial future. He advocates for early savings and utilizing accounts that permit investments, describing them as essential for creating a “healthcare nest egg, regardless of age.”
Moreover, he suggested those enrolled in HSA-qualified health plans should maximize their health savings accounts. Thanks to the triple tax benefits associated with HSAs, they serve as a flexible solution for covering medical expenses. Contributions are tax-deductible, and funds can be spent tax-free if used for eligible medical costs, all while allowing for tax-free growth on investments.
