Concerns Over Healthcare Costs in Retirement Grow
As Americans struggle with the impacts of rising inflation, a growing number also relay concerns over increasing healthcare costs on retirement.
A survey from D.A. Davidson, an employee-owned financial services firm, found that 78% of Americans reported concerns over the effects of rising healthcare costs in retirement, even as only 48% have considered these costs in their planning efforts.
“Healthcare is one of the most significant, and yet still underestimated, expenses that most retirees will face,” said Andrew Crowell, financial advisor and vice chairman of Wealth Management at D.A. Davidson. “Healthcare inflation typically runs at least twice the rate of overall inflation, yet many people experience denial over the fact that this could impact their retirement strategy one day.”
Past findings have highlighted the growing costs associated with medical services. Research from Fidelity Investments in 2025 found that the average 65-year-old couple will spend upwards of $172,500 on healthcare costs in retirement, representing a 4% increase compared to the year before. This figure had also more than doubled compared to the firm’s inaugural $80,000 estimate in 2002.
In the D.A. Davidson report, 37% of couples project having to cut back on everyday spending, along with reducing travel or leisure, if healthcare costs are higher than initially expected.
Despite their concerns, just 40% of those who own a health savings account (HSA) say they’ve used theirs for long-term savings, and only 13% plan to pay for healthcare costs in retirement using an HSA. Other strategies include Medicare Advantage of supplemental Medicare plans (47%), retirement accounts (35%), personal savings outside of retirement accounts (34%), and long-term care insurance (17%).
Further, 23% of Americans have touched on the topic with a professional.
“Unexpected medical expenses can derail even well-structured retirement strategies, but the good news is that proactive planning can help pre- and current retirees better protect their financial security,” Crowell said.
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. She is originally from Queens, New York, but now resides in Denver, Colorado.