Retiring This Year? Make Sure You're Prepared For This $955,411 Expense First

Most people approaching retirement have thought hard about housing, Social Security timing, and whether their savings will last. What consistently gets underestimated, however, is health care. 

Rather than showing up as a single bill, it accumulates over decades in premiums, deductibles, copays, and expenses that Medicare was never designed to cover. Understanding this particular senior benefits gap before you retire could be one of the most important financial moves you can make.

According to HealthView Services' 2026 Retirement Healthcare Costs Data Report, a healthy 65-year-old couple retiring this year can expect to pay $688,996 in lifetime Medicare premiums alone. Once deductibles, copays, and out-of-pocket costs for services Medicare doesn't cover — including hearing, vision, and dental care — are factored in, total projected lifetime medical costs for that couple reach $955,411.

Here's what's driving that number, why it's likely to get worse, and what you can do about it now.

The number is bigger than it looks

The $955,411 figure represents actual dollars spent over time, accounting for health care inflation. In today's dollars, HealthView calculates the same costs at $661,812. Both numbers are startling, but the future-value figure is what matters for retirement planning, because you'll be spending those dollars in the years and decades ahead.

The costs don't stay flat. HealthView's actuarial data show annual healthcare costs for a typical 65-year-old couple starting at $17,003 in year one of retirement and rising to $55,513 by age 85 — more than tripling over two decades. That assumes an average longevity of 88 for men and 90 for women. 

The projection also varies significantly by location: lifetime costs are projected as high as $1,053,252 for a couple in Missouri and as low as $878,565 in Washington State, reflecting regional differences in health care pricing.

The COLA problem

Here's the compounding threat. Medicare Part B premiums, which are automatically deducted from Social Security payments, rose by 9.7% in 2026, from $185 to $202.90 per person per month. The Social Security cost-of-living adjustment (COLA) that same year was 2.8%. 

The gap between those two numbers is the story: health care inflation is running at a projected long-term rate of 5.8% annually, according to HealthView, while Social Security COLAs are projected to grow at just 2.4% in coming years.

What that means in practice is that a growing share of each Social Security check gets consumed by Medicare premiums before retirees ever see it. The buffer between what retirees receive and what they owe for care is expected to narrow steadily over time. As HealthView CEO Ron Mastrogiovanni put it, "the cost of health-related care in retirement still comes with sticker shock" — and the math behind that shock isn't improving.

What Medicare doesn't cover

Part of why the total figure climbs so high is that standard Medicare — Parts A and B — has significant gaps. There is no cap on out-of-pocket costs under traditional Medicare. 

Part A covers inpatient hospital care with deductibles and Part B covers outpatient services and doctor visits with a 20% coinsurance that has no annual ceiling. Neither covers routine dental, vision, or hearing care, three areas where costs tend to increase significantly with age.

Medigap and Medicare Advantage plans address some of these gaps but add their own premium costs. Medicare Advantage plans showed a national average inflation rate of 6.6% in 2026.

Three practical steps to consider to prepare

While no one can eliminate health care costs in retirement, taking a few proactive steps could help reduce financial surprises and make those expenses more manageable.

Max out an HSA while you're still working

A health savings account is the most tax-efficient vehicle for building a health care reserve. Contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses — including Medicare premiums — are tax-free. 

In 2026, the family contribution limit is $8,750. After 65, HSA funds can be withdrawn for any purpose without penalty, though non-medical withdrawals are taxed as ordinary income. Contributing the maximum every year you're eligible could be one of the highest-return moves available for future health care funding.

Compare Medigap and Medicare Advantage plans carefully

For those entering Medicare, the choice between traditional Medicare with a Medigap supplement and a Medicare Advantage plan is one of the most consequential decisions of early retirement. 

Medigap Plan G offers broad coverage with predictable costs and Medicare Advantage plans often have lower premiums but more network restrictions. Location, health status, and utilization all affect which produces lower lifetime costs.

Set aside a dedicated health care reserve

Rather than absorbing medical bills into a general retirement budget, carve out a specific allocation from Social Security, required minimum distributions, or portfolio withdrawals. Replenishing it annually creates a buffer as costs escalate with age and prevents health care spending from crowding out other expenses in your 80s.

Bottom line

Nearly $1 million in lifetime health care costs is a real projection for a couple retiring today. The combination of Medicare coverage gaps, health care inflation running at more than double the Social Security COLA rate, and rising out-of-pocket exposure makes this the retirement expense most likely to derail an otherwise solid plan.

Treating it as a line item in your retirement income projections rather than a rounding error is essential to achieving your retirement goals.