Healthcare Costs in Retirement
In a 2025 survey, only 41% of all workers had calculated how much money they would need to pay for medical expenses in retirement. Being aware of potential healthcare costs during retirement may allow you to understand what you can pay for and what you can’t.1
Health-Care Breakdown
A retired household faces three types of healthcare expenses.
The premiums for Medicare Part B (which covers physician and outpatient services) and Part D (which covers drug-related expenses). Typically, Part B and Part D are taken out of a person’s Social Security check before it is mailed, so the premium cost is often overlooked by retirement-minded individuals.
Copayments related to Medicare-covered services that are not paid by Medicare Supplement Insurance plans (also known as “Medigap”) or other health insurance.
Costs associated with dental care, eyeglasses, and hearing aids – which are typically not covered by Medicare or other insurance programs.
It All Adds Up
According to one study, the average total cost to cover healthcare expenses in retirement for a 65-year-old is $165,000.2
Should you expect to pay this amount? Possibly. Seeing the results of one study may help you make some critical decisions when creating a strategy for retirement. Without a solid approach, healthcare expenses may add up quickly and alter your retirement spending.
Prepared for the Future?
Workers were asked how much they have saved and invested for retirement – excluding their residence and defined benefit plans.
Source: EBRI.org, 2025
Retirement Healthcare Costs FAQs
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Healthcare costs are one of the largest expenses in retirement. Without proper planning, premiums, copayments, and uncovered services such as dental, vision, and hearing can quickly erode retirement savings. A retirement plan that accounts for these costs helps ensure financial security.
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Retirees often face Medicare Part B and Part D premiums, copayments for uncovered services, and out-of-pocket costs for dental, vision, and hearing care not covered by Medicare.
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According to recent studies, the average 65-year-old may need about $165,000 to cover healthcare expenses throughout retirement. Individual needs will vary based on health, lifestyle, and insurance choices.
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No. While Medicare helps with hospital, physician, and drug coverage, it does not fully cover copayments, dental, vision, or hearing care. Many retirees use Medigap or supplemental insurance to help fill these gaps.
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Medicare Part B covers physician and outpatient services, while Part D covers prescription drugs. These premiums are often deducted from Social Security checks, which makes them easy to overlook during retirement planning.
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A wealth advisor can estimate future healthcare costs, incorporate them into your retirement strategy, and recommend savings or insurance solutions to help manage these expenses.
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Atlantic Wealth Advisors specializes in helping Connecticut residents plan for retirement, including healthcare costs. Their hands-on approach ensures clients understand potential expenses and create a strategy to maintain financial confidence throughout retirement.
1. EBRI.org, 2025
2. Investopedia.com, June 11, 2025
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2025 FMG Suite.
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