Fidelity Says You’ll Spend $172,500 on Health Care in Retirement. I’m 70 and a CPA — Here’s Why You Shouldn’t Worry

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Every summer, Fidelity releases a number designed to stop you cold: a 65-year-old retiring today will spend $172,500 on health care over the course of retirement. (1)

That figure is up 4.5% from $165,000 the year before, and it’s more than doubled since Fidelity’s first estimate of $80,000 back in 2002. (1) It gets quoted everywhere, and every time, it lands like a punch.

I’m 70 years old and a CPA. I’m living the exact stretch of life this number is about — I’m on Medicare, I pay these bills, I read my own statements. So let me tell you something reassuring: the number’s real, but the panic it causes is mostly manufactured.

Here’s the trick. Fidelity’s own research found the average American guesses they’ll spend about $75,000 — less than half the projected cost. (2) So when the real figure shows up, it feels like a disaster you failed to see coming. It isn’t.

The $172,500 is a lifetime total, spread across 20 or more years, for one person, assuming a specific set of Medicare choices. (1) Break it into its actual pieces and it stops looking like a wall and starts looking like a budget line.

Here are five things that scary number gets wrong — and what it really means for you.

1. It’s a lifetime total, not an annual bill

The single biggest reason $172,500 terrifies people: it’s presented as one giant lump, so your brain hears “you need $172,500 in cash or you’re sunk.”

You don’t. It’s the estimated total across your entire retirement — 20, 25, maybe 30 years. (1)

Think about it the way you’d think about groceries. If I told you you’ll spend $200,000 on food over the next 25 years, you wouldn’t panic — you’d know it’s about $8,000 a year, and you’d just buy groceries like you always have.

Health care in retirement works the same way. It’s a recurring expense you manage annually, not a boulder you have to lift on day one.

Spread $172,500 across a couple of decades and you’re looking at a few hundred dollars a month. Very manageable. Still real, but manageable.

2. It’s mostly Medicare’s gaps — not a catastrophe

So what actually costs that much? Not some surprise six-figure surgery. It’s the steady drip of what Medicare doesn’t fully cover.

Fidelity’s estimate assumes you’re enrolled in Original Medicare — Parts A and B — plus a Part D drug plan, and it adds up the premiums, deductibles, copays, and coinsurance. (1) That’s it. Routine stuff.

Here’s what that looks like in real 2026 numbers: the standard Medicare Part B premium is $202.90 a month, the Part B annual deductible is $283, and the Part A hospital deductible is $1,736 per benefit period. (3)

None of that is scary in isolation. It’s just ordinary cost-sharing that adds up over 20-plus years. Knowing that is the difference between dread and a plan.

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3. It leaves out the one cost that can actually hurt you

Here’s the part almost nobody reads: Fidelity says right in its report that the $172,500 does not include long-term care. (1)

That’s a big deal, because long-term care is the expense that can actually do damage. Fidelity’s own research says someone who reaches 65 has roughly a 70% chance of needing some form of long-term care. (4) And Medicare doesn’t cover custodial care — the daily help with bathing, dressing, and eating — which is exactly the kind most people end up needing.

So the routine Medicare costs? Manageable, as we’ve covered. The long-term care bill? That’s the one worth planning for on purpose. At 70, I’m past the ideal age to buy coverage myself, but if you’re younger, this is the thing to look at while it’s still affordable.

According to government data, about 7 in 10 people turning 65 will need some form of long-term care. And Medicare doesn’t cover custodial care — the day-to-day help with things like bathing and dressing — which can leave families facing six-figure bills that eat into retirement savings.

Long-term care insurance helps fill that gap, covering services like home care, assisted living, and help with daily tasks. Rates are typically lowest if you buy in your 50s or early 60s, couples often qualify for discounts, and premiums may even be tax-deductible.

A little planning now can spare your family a difficult financial situation later.

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4. It’s one person’s number — and it assumes you did nothing to prepare

Two more things the headline hides.

First, $172,500 is per individual. (1) A couple should roughly double it in their planning — Fidelity pegs a 65-year-old couple around $345,000. (4) That sounds worse, but it’s the same manageable annual math, just times two.

Second, the estimate assumes you have no dedicated savings set aside for this and no strategy for how you’ll pay. That’s a choice, not a fate. The people who get blindsided are the ones who never made a plan — and the fix for that isn’t panic, it’s a conversation.

If you’ve got real retirement savings in play, the smartest move is to have someone run the actual numbers for your situation — your Medicare choices, your tax picture, how to draw down accounts in the right order.

These types of questions are the perfect time to get a second set of eyes…an expert to help guide your investments and savings, as well as offering advice on tricky questions like when to take Social Security and how to plan for healthcare.

Where do you find a qualified advisor? Easy. SmartAsset instantly matches you with up to three fiduciary advisors – legally required to prioritize your interests. It doesn’t cost a dime to see what’s out there, and most advisors offer free first appointments.

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5. The real problem isn’t the cost — it’s that people don’t plan for it

Here’s the statistic that should actually get your attention. Fidelity found that 1 in 5 Americans have never once thought about health care costs in retirement — and 17% across all generations have taken no action at all. (1)

That’s the real story. The $172,500 isn’t the threat. Ignoring it is.

And the simplest first move costs you nothing: set aside money specifically for these costs, and don’t let it sit in a checking account earning nothing while inflation eats it.

Switching to a better bank account is one of the easiest edges out there.

If you’re still at a traditional brick-and-mortar bank, you may be paying monthly checking fees while earning almost nothing on your savings.

SoFi offers a combined checking-and-savings account with no account fees, and with eligible direct deposit you can earn up to 3.80% APY on savings — many times the national average. (APY is variable and can change at any time.)

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Check out SoFi today.

The bottom line from someone who’s actually there

I’ve been on Medicare for years now. The bills come, I pay them, and my retirement is just fine. So I can tell you from the inside: $172,500 is a real number, but it’s a slow, spread-out, manageable number — not a cliff you fall off the day you turn 65.

The companies that publish these figures aren’t lying. But a giant lifetime total, printed in bold, is designed to make you anxious enough to act. Anxiety’s a lousy financial planner. Arithmetic’s a good one.

So do the arithmetic. Budget a few hundred a month for routine costs, make a real plan for long-term care while you’re young enough for it to be cheap, and set your savings aside on purpose. Do that, and this number loses its teeth.

Sources: Fidelity Investments (1); TheStreet (2); PLANSPONSOR (3); Fidelity Viewpoints (4).