Retiree Healthcare Costs Climb Another $30,000 in 2026
A healthy 65-year-old couple will need over $400,000 in retirement savings to afford healthcare costs, projects a new index by consulting and actuarial firm Milliman.
The 2026 Retiree Health Cost Index (RHCI) utilizes two concepts to summarize the amount of savings retirees will need to fund healthcare costs and how much they will spend over the course of their remaining lifetimes.
Milliman’s RHCI is the amount of savings, net of taxes, needed at age 65 to pay for a retiree’s remaining lifetime healthcare costs, assuming an investment return of 3% per year.
The index estimates that a healthy 65-year-old couple today would need $418,000 in savings under certain coverages, like for those under Original Medicare with Medigap Plan G plus Part D coverage. Couples with this coverage could expect to spend $637,000 on healthcare expenses over the course of their remaining lifetime.
Meanwhile, couples with private insurance coverage like Medicare Advantage plus Part D (MAPD), could expect to spend an average of $320,000 on healthcare expenses, and will have to save $211,000.
Broken down by gender, males under Original Medicare with Medigap Plan G plus Part D coverage will spend a total of $297,000 and need to save $199,000. Women, who also tend to have higher life expectancies than men, will spend $340,000 over the course of their remaining lifetime and will need $219,000 in savings.
Males under MAPD plans will spend $148,000 and require $100,000 in savings, while women will spend $172,000 and need $111,000 in savings.
These projections are steady increases from last year’s figures: Those with Original Medicare coverage will now have to spend $30,000 more compared to 2025, while retirees with MAPD will have to pay $28,000 more.
“Healthcare costs in retirement don’t move in a straight line, and 2026 is a good reminder of that,” said Robert Schmidt, co-author of the report. “Out of pocket costs are an important part of retirement planning, and how much a person spends will depend on a variety of health and other factors.”
Despite the high short-term increases, Milliman’s longer-term trend was more mild, averaging a 3% average annual growth in the Medigap pathway and 2% average annual growth for the MAPD pathway between 2022 and 2026.
Milliman’s analysis credits several factors for the swells in pricing this year. Those with Medigap coverage have seen higher premiums plus a bump in projected long-term healthcare inflation, although their costs are partially offset by lower Part D premiums, the research found.
Those with MAPD coverage are experiencing higher projected healthcare costs due to rising medical expenses and plan adjustments, including changes to Part D, a reduction in supplemental benefits, and higher cost-sharing requirements.
Additional findings from Milliman’s index can be found here.
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with nearly a decade of experience and a passion for telling stories and reporting news.