By Marc Gilman
(800) 927-9326 |
Ask most people what they’ll spend on healthcare in retirement, and you’ll get a shrug — or a vague sense that Medicare “handles it.” Medicare does a lot of the heavy lifting, but premiums, deductibles, copays, and supplemental coverage add up to real money over a 20-to-30-year retirement. According to actuarial data from HealthView Services, which evaluates over 530 million data points from actual medical claims, a healthy 65-year-old couple retiring today could see combined lifetime healthcare costs well into seven figures. The exact number depends heavily on factors most people never think to plan around.
Key Takeaways
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Lifetime retirement healthcare costs for a couple can reasonably range from around $700,000 to over $1.3 million, depending on health, longevity, income, and where you retire — there’s no single “average” number that applies to everyone.
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Healthcare costs have historically risen at roughly twice the rate of general inflation, and different categories (Medicare Part B, Medigap, prescription drugs) inflate at different rates.
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Counterintuitively, healthier people often pay more over their lifetime, not less — because they live longer and accumulate more years of rising costs.
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Retiring before age 65 can mean years of full-price private health insurance, which varies enormously by state.
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Where you retire matters a lot — the same coverage can cost more than double depending on the state.
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Income affects what you pay through Medicare’s IRMAA surcharge system — a significant enough topic that we’re covering it in its own dedicated post.
How Much Should You Actually Expect to Pay?
There’s no single honest answer, and any source that gives you one number without context is oversimplifying. HealthView Services’ own case study illustrates the range well: a hypothetical 65-year-old Missouri couple with manageable chronic conditions (high cholesterol and Type 2 diabetes) projects to about $713,257 in lifetime healthcare costs, assuming they stay in the lowest income bracket. If that same couple were instead healthy with no chronic conditions — and therefore likely to live longer — their projected costs actually rise to $1,084,579, simply because they’d be paying premiums and out-of-pocket costs for more years. Combine that longer lifespan with a higher income bracket, and the projection climbs to $1,382,128.
That’s roughly a $670,000 swing for the same starting point — age 65, married, retiring the same year — based entirely on health, longevity, and income. Averages simply don’t capture that range.
Why Do Healthcare Costs Rise Faster Than Everything Else?
Healthcare spending has a long-standing pattern of climbing at roughly twice the rate of the Consumer Price Index, largely because people need medical care regardless of price — it doesn’t respond to cost the way discretionary spending does. But it’s not one uniform rate. Medicare Part B premiums are projected to rise around 7% annually over the long term, prescription drugs around 4.1%, and hospitalization out-of-pocket costs a comparatively modest 1.4%. Medigap premiums face a double hit in most states: roughly 4.4% inflation plus an additional 3.5% “age-rating” increase as you get older, for a combined impact of about 8% annually. Using a single blended inflation rate to plan for all of this understates how unevenly these costs actually grow.
Does Being Healthy Actually Save You Money?
Not necessarily — and this genuinely surprises most people. Someone managing a chronic condition typically pays more per year: a 70-year-old with Type 2 diabetes, for example, spends roughly $3,100 more out-of-pocket annually than a healthy peer on the same coverage. But annual cost isn’t the same as lifetime cost. Because healthier people tend to live longer, they accumulate more years of premiums and inflation-adjusted costs — sometimes outspending someone with a shorter life expectancy by hundreds of thousands of dollars over a full retirement. It’s worth planning for both possibilities rather than assuming good health means a smaller number.
What About Retiring Before 65?
Medicare eligibility starts at 65, and the average retirement age is closer to 62 — a gap that leaves a meaningful number of early retirees paying full price for private coverage, typically through COBRA, the ACA marketplace, or an individual plan, without any employer subsidy. How much that costs varies enormously by state: individual HMO premiums for 2026 range from around $12,200 a year in states like Arkansas up to nearly $22,000 in states like Oregon. If early retirement is part of your plan, this bridge period deserves its own line item, not an assumption that it’ll sort itself out.
Does Where You Retire Matter?
Significantly, for almost every cost category except the federally-set Medicare Part B premium. Medigap, Medicare Advantage, Part D, and dental premiums are all priced by private insurers operating at the state level, and out-of-pocket spending on everything from prescriptions to dental care varies by location too. As one illustration: a healthy 65-year-old woman’s lifetime Medigap Plan G premiums are projected to range from about $106,000 to $251,000 depending purely on which state she retires in — a 137% difference for functionally the same coverage.
What Role Does Income Play?
Income affects your Medicare costs directly through a surcharge system called IRMAA (Income-Related Monthly Adjustment Amount), which increases your Part B and Part D premiums once your income crosses certain thresholds. It’s a significant enough topic — with real planning opportunities around how you structure retirement income — that it deserves its own dedicated post rather than a quick summary here. For now, the short version: the higher your reportable income in retirement, the more you’ll pay for the same Medicare coverage, and this is one of the more plannable pieces of the whole picture.
What Can You Actually Do About This?
The point of these projections isn’t to cause alarm — HealthView is explicit about this in their own research, and it’s worth repeating: the goal is turning an abstract worry into a plannable number. A few things genuinely help:
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Get a personalized projection rather than relying on a national average. Your health, family longevity, planned retirement age, state, and income all move the number substantially.
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Understand your Medigap vs. Medicare Advantage tradeoff early, since it affects both your monthly costs and your long-term flexibility.
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Plan for the pre-65 gap if you’re retiring early, since that coverage isn’t subsidized the way employer coverage is.
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Factor healthcare into your broader retirement income plan, not as a separate afterthought — since it’s often one of the largest and most underestimated categories of retirement spending.
Where Does Insurance Planning Fit In?
Understanding your projected healthcare costs is most useful when it’s tied to an actual coverage decision — Medigap plan selection, Medicare Advantage comparison, or how your Part D coverage fits your specific prescriptions. Gilman Agency can help translate a national projection into what it actually means for your Medicare coverage choices in New Hampshire or Massachusetts.
What To Do Next
If you haven’t put a real number on your own expected healthcare costs in retirement, that’s a reasonable place to start — even a rough, personalized estimate is more useful than a national average. From there, the coverage decisions (Medigap vs. Medicare Advantage, which Part D plan fits your prescriptions) become a lot clearer.
Call (800) 927-9326, or email to talk through your situation. TTY: 711.
By Marc Gilman, Gilman Agency
Sources: HealthView Services, “2026 Retirement Healthcare Costs Data Report” (February 2026); Retirement Income Journal, “What America Pays for Health Care in Retirement: Healthview” and “Bracing for Health Costs in Retirement”; Centers for Medicare & Medicaid Services (CMS).
