8-In-10 Americans Expect High Healthcare Costs in Retirement

Eight in Ten Americans Expect High Healthcare Costs

WASHINGTON, June 10, 2026 — A new Fidelity Retirement Confidence Study shows that eight in ten Americans expect high healthcare costs in retirement, a sign that medical bills remain the single largest risk to long-term financial security for many households. The report, released this week, tracks how families are saving, insuring, and planning for medical outlays decades into the future.

In Fidelity's 2026 analysis, '8-in-10 americans expect high' healthcare costs in retirement, underscoring the broad anxiety around medical bills once work stops and coverage shifts. The survey canvassed more than 3,000 households across income levels, ages, and geographies to capture how families are preparing for a future shaped by rising care needs.

How Americans Are Responding

Facing the prospect of costly care, households are layering strategies rather than relying on a single solution. The study highlights four pillars that households are leaning on to cushion retirement from medical bills:

• Health Savings Accounts (HSAs): Participation is rising, with many savers using HSAs for triple tax benefits—pre-tax contributions, tax-free growth, and tax-free withdrawals when funds are used for qualified medical expenses. The study notes a notable uptick in both contributions and balances, with many households treating HSAs as a dedicated medical rainy day fund that persists into retirement.
• Medigap Supplemental Insurance: Gaps in Medicare coverage are prompting greater reliance on Medigap policies. More retirees report purchasing or increasing Medigap protections to shield themselves from thousands of dollars of annual out-of-pocket costs during illness.
• Long-Term Care Insurance: Planning for custodial and skilled care needs is rising in importance, with more households recognizing long-term care costs as a critical retirement exposure and seeking coverage or savings buffers to manage potential care needs.
• Higher Retirement Savings: In response to the expected rise in health-related outlays, many households are boosting overall saving rates, reallocating portfolios, and prioritizing retirement accounts to build a war chest for future medical spending.

Beyond the four pillars, the study shows that a growing share of Americans plan to stay insured and save more aggressively as they approach retirement. Three-quarters of respondents report having some form of retirement healthcare plan in place, a milestone compared with recent years that signals a shift from worry to action for many households.

Why Costs Are Rising and What It Means for Investors

Healthcare spending outpaced general inflation over the past year, driven by rising prescription costs, longer-living retirees, and more intensive care needs as medical technology advances. Fidelity researchers say the longer health risks persist into retirement, the more households will need to budget for medical bills that can represent a sizable share of retirement expenses.

Policy shifts and public program changes add to the uncertainty, but the core message from the Fidelity study is clear: Americans are preparing, not hoping, to cover health costs in retirement. The report also points to several trends worth noting for investors and savers:

• HSA balances and usage are trending higher as workers recognize the tax advantages and the long horizon over which medical costs can accumulate. HSAs are increasingly viewed as a flexible vehicle that can compound tax-advantaged savings well into retirement.
• Medigap demand is rising as retirees seek predictable protection against unpredictable bills. This shift helps cap out-of-pocket exposure during illness and reduces the risk of depleting portfolios prematurely.
• Long-term care planning is moving higher on the priority list, with more households purchasing coverage or reserving funds to cover extended care if needed. This helps preserve day-to-day living standards in retirement.
• Saving rates and opportunity costs remain a constraint for some households. The study notes personal saving rates have cooled in the past year, leaving families balancing medical prep with other financial goals, including paying down debt and funding education or housing needs.

The data also show a notable psychological shift: many Americans who were previously focused on short-term investments or discretionary spending are now prioritizing long-run medical resilience. A Fidelity researcher explains, 'We are seeing a shift toward proactive planning as people listen to the math of retirement health costs and map it into concrete savings and insurance moves.'

Market Context and Practical Takeaways

Market conditions in 2026 remain supportive for retirement planning, with inflation moderating and employment conditions broadly steady. However, the Fidelity study makes one thing unmistakably clear: even with a favorable market backdrop, healthcare costs in retirement are a financial cliff for many households if left unaddressed.

For investors and savers, the implications are practical and actionable:

• Prioritize an HSA if eligible, and plan to contribute consistently over time, even as other retirement accounts are funded.
• Assess Medigap options early in the retirement planning process to close gaps in Medicare coverage and stabilize out-of-pocket costs.
• Consider long-term care insurance as part of a balanced portfolio, recognizing the potential for high-care needs later in life.
• Maintain a diversified savings plan that includes tax-advantaged accounts, while also budgeting for healthcare expenses as a distinct line item in retirement projections.

Financial planners say the headline finding—'8-in-10 americans expect high' costs—should spur households to act sooner rather than later. By combining HSAs, Medigap, long-term care coverage, and higher saved capital, families can reduce the risk that medical bills will derail retirement plans. The Fidelity study presses a simple conclusion: cost planning is wealth planning, especially when health care takes center stage in retirement budgeting.

Bottom Line

As of June 2026, the consensus from Fidelity's study is clear. The vast majority of Americans anticipate significant health-care outlays in retirement, and they are responding by stacking savings, insurance, and planning tools to mitigate the impact. For anyone building a retirement plan today, the message is pragmatic: prepare for care costs as a core element of long-term financial security, and use a multi-pronged strategy to stay ahead of rising healthcare prices.