Imagine spending decades building a retirement nest egg, only to watch a significant portion quietly vanish into healthcare costs. According to Fidelity Investments, a 65-year-old retiring today can expect to spend an average of $172,500 on medical expenses in retirement, excluding long-term
care and Medicare premiums.
Healthcare is no longer a line item in your retirement budget. It is the budget.
Why 2026 Is a Turning Point: Several forces are converging this year. Medicare Part B premiums continue rising, and the out-of-pocket cap on Part D prescription drug costs has climbed to $2,100. Social Security recipients received a 2.8 percent cost-of-living adjustment in January — a cushion that healthcare inflation has historically outpaced.2 The Kaiser Family Foundation reports that family health insurance premiums rose nearly 47 percent between 2013 and 2023, with little sign of slowing.
Your Health Is Your Hedge: Here is where healthy living becomes a financial strategy. Retirees who stay active, eat well, manage chronic conditions, and keep up with preventive screenings consistently spend less on medical care. Avoiding a single hospitalization or delaying the onset of a chronic disease by even a few years can save tens of thousands of dollars. The Federal Reserve has found that health problems factor into the retirement decisions for roughly 30 percent of retirees, and poor health often forces an early exit, eliminating savings contributions while triggering higher spending simultaneously.
Smart Accounts to Know in 2026: Health Savings Accounts (HSAs) are one of retirement planning’s most powerful — and underused — tools. In 2026, individuals in a qualifying high-deductible health plan can contribute up to $4,400; families up to $8,750; and those 55 or older can add a $1,000 catch-up contribution. Funds grow tax-deferred, qualified withdrawals are tax-free, and after age 65, the account works like a traditional IRA
for non-medical expenses. Flexible Spending Accounts (FSAs) offer an additional pre-tax option — up to $3,400 annually for dental, vision, and prescriptions — though they operate on a use-it-or-lose-it basis.
Don’t Leave Free Care on the Table: Medicare covers a wide range of preventive services at no cost — annual wellness visits, cancer screenings, diabetes prevention programs, and cardiovascular risk assessments. Yet utilization remains low. Using these benefits fully is one of the highest-return actions any retiree can take.
The bottom line: your retirement security and your physical health are the same conversation. The choices you make today about movement, nutrition, sleep, and preventive care are quietly writing your financial story for tomorrow. In 2026, your most powerful retirement asset may not be in your brokerage account — it may be laced up on your feet.
Take Control of Your Retirement Health Strategy Today: At Citizen Advisory Group, we know that healthcare costs are one of the most complex — and often underestimated — variables in retirement planning. Our experienced advisors work with you to build a comprehensive strategy that accounts for rising medical expenses, maximizes tax-advantaged accounts like HSAs, and coordinates your Medicare coverage with your broader financial plan. Whether you are years away from retirement or already there, we can help you protect what you have worked so hard to build.
Call us at 419-872-0204 to schedule a complimentary consultation or visit citizenadvisory.com to learn more about how we can help you retire with confidence — and with your health and finances working together.
WELLNESS TIP: A 35-year-old who contributes $1,750 annually to an HSA, earning a 7% average annual return, could accumulate roughly $172,500 by age 65 — enough to cover the average retiree’s projected healthcare costs.
SOURCES
1. Fidelity Investments. “Fidelity Investments Releases 2025 Retiree Health Care Cost Estimate.” Fidelity Investments Newsroom, July 30, 2025. newsroom.fidelity.com
2. Fidelity Investments. “What Recent Medicare Changes Could Mean for Beneficiaries.” Fidelity Learning Center, December 2, 2025. fidelity. com/learning-center/personalfinance/ medicare-part-d-changes
3. KFF (Kaiser Family Foundation). “2023 Employer Health Benefits Annual Survey.” KFF, October 18, 2023. (Family coverage premiums: $16,351 in 2013 vs. $23,968 in 2023, a 47% increase.) kff.org/series/employer-healthbenefits- survey
4. Board of Governors of the Federal Reserve System. “Report on the Economic Well-Being of U.S. Households in 2023.” Federal Reserve, May 2024. (29% of retirees cite a health problem as a factor in their retirement decision.) federalreserve.gov/publica tions/2024-economic-well-being-ofus- households-in-2023-retirementinvestments. htm
5. Fidelity Investments. “How to Plan for Rising Health Care Costs.” Fidelity Viewpoints, September 5, 2025. fidelity.com/viewpoints/personal-finance/ plan-for-rising-health-care-costs
6. IRS. “Revenue Procedure 2025-19: HSA Contribution Limits for 2026.” Internal Revenue Service, 2025. irs.gov
7. Centers for Medicare & Medicaid Services (CMS). “Medicare Preventive Services.” CMS.gov. cms.gov/medicare/ preventive-services
Investment advisory and financial planning services offered through Advisory Alpha, LLC, a Registered Investment Advisor. Insurance, Consulting, and Education services offered through Citizen Advisory Group. Citizen Advisory Group is a separate and unaffiliated entity from Advisory Alpha. While tax and legal issues may be discussed in the general course of financial and investment planning, Advisory Alpha does not provide tax or legal services. Please consult with your tax or legal professional prior to making decisions relative to these issues.
