Fidelity Investments® Releases 2025 Retiree Health Care Cost Estimate, a Timely Reminder for All Generations to Begin Planning

BOSTON--(BUSINESS WIRE)--Jul 30, 2025--

Fidelity Investments® today shared its 24 th annual Retiree Health Care Cost Estimate, revealing that a 65-year-old retiring in 2025 can expect to spend an average of $172,500 in health care and medical expenses throughout retirement 1. This represents a more than 4% increase over 2024 and continues the general upward trajectory of projected health-related expenses since Fidelity’s inaugural $80,000 estimate in 2002.

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This year’s estimate comes as Americans’ confidence in their retirement prospects has slightly decreased and a record-number begin their final stretch to reaching the traditional retirement age of 65 2. Of concern, recent Fidelity research shows 1-in-5 Americans say they have never considered health care needs during retirement—a figure that rises to one-in-four among Gen X. More so, across all generations, 17% have taken no action at all when it comes to planning for health expenses in retirement 3.

“Year after year, so many Americans underestimate how much they’ll need to save to cover health care costs in retirement,” said Shams Talib, head of Fidelity Workplace Consulting. “We recognize the impact health care costs can have on retirement savings. With the right tools and guidance, pre-retirees and retirees alike can take greater control of their financial futures by beginning the planning process as soon as possible.”

The Retiree Health Care Cost Estimate helps Americans of all ages understand the potential impact of rising health care costs on their financial planning and helps them make more informed decisions about saving for retirement. The estimate assumes enrollment in Original Medicare (Parts A and B) and Medicare Part D, which includes premiums, co-payments, and other out-of-pocket costs for medical care and prescription drugs. It does not include long-term care expenses.

Health Savings Accounts: a tax-advantaged tool for health care costs

Health savings accounts (HSAs) can play an important role in preparing for health care costs both now and in the future. The most notable feature of an HSA is its triple-tax advantage 4: contributions to the account are made pre-tax; you can withdraw funds to pay for qualified medical expenses tax-free; and you can invest HSA funds, too, with any investment growth also considered tax-free.

“HSAs are more than just a short-term savings tool—they can serve as a critical component of the retirement readiness equation,” said Steve Betts, head of Fidelity Health. “Our research consistently shows HSA users feel more prepared to cover health care expenses in retirement, yet many people don’t realize the full potential of the account. When used as a part of a well-crafted retirement plan, the tax-advantaged nature of your HSA savings can offer growth potential that can help reduce the burden of health care in retirement.”

While HSA adoption rates continue to increase— Fidelity HSAs saw a 43% growth in total assets and 23% increase in accounts in 2024 5 —opportunities still exist for greater education around HSA features. Recent Fidelity research finds only 23% of Americans say they are contributing to an HSA as one way to prepare for health care costs in retirement, and just 3-in-10 are investing their HSA assets, leaving growth potential on the table 3. Moreover, many pre-retirees have fallen into an HSA knowledge gap altogether: only 15% of people ages 55-64 have an HSA 6, and among them, more than half (52%) are not aware that an HSA can be used as a retirement savings vehicle 7.

Medicare: the difference a plan makes

For older Americans approaching Medicare eligibility, understanding the potential costs they may face in retirement is critical, as well as how Medicare can and cannot help. While 37% of Americans plan to rely on Medicare to cover health care costs in retirement 2, Fidelity’s estimate—which assumes enrollment in Medicare Parts A. B, and D—shows how quickly out-of-pocket expenses can add up. Retirees are still on the hook to cover things like Medicare premiums, over-the-counter medications, dental and vision care, and other types of added expenses like long-term care.

Choosing health care coverage in retirement can be one of the most complex decisions many Americans make—55% anticipate it will be difficult to enroll in Medicare coverage, and half expect to be confused when selecting a plan. 8 Whether enrolling in Medicare for the first time or looking for coverage to better meet their needs, Fidelity Medicare Services ® can help by providing complimentary education and guidance from licensed insurance agents to help retirees and near-retirees with their health and financial goals.

Fidelity Resources for Managing Your Health Care Journey Today and Into Retirement

About Fidelity Investments

Fidelity’s mission is to strengthen the financial well-being of our customers and deliver better outcomes for the clients and businesses we serve. Fidelity’s strength comes from the scale of our diversified, market-leading financial services businesses that serve individuals, families, employers, wealth management firms, and institutions. With assets under administration of $15.0 trillion, including discretionary assets of $5.9 trillion as of March 31, 2025, we focus on meeting the unique needs of a broad and growing customer base. Privately held for 78 years, Fidelity employs more than 77,000 associates across the United States, Ireland, and India. For more information about Fidelity Investments, visit https://www.fidelity.com/about-fidelity/our-company.

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Investing involves risk, including risk of loss.

The information provided here is general in nature. It is not intended, nor should it be construed, as legal or tax advice. Because the administration of an HSA is a taxpayer responsibility, customers are strongly encouraged to consult their tax advisor before opening an HSA. Customers are also encouraged to review information available from the Internal Revenue Service (IRS) for taxpayers, which can be found on the IRS Web site at www.IRS.gov. They can find IRS Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans, and IRS Publication 502, Medical and Dental Expenses (including the Health Coverage Tax Credit), online, or you can call the IRS to request a copy of each at 800.829.3676.

Fidelity does not provide legal or tax advice. The information herein is general in nature and should not be considered legal or tax advice. Consult an attorney or tax professional regarding your specific situation.

Views expressed are as of the date indicated, based on the information available at that time, and may change based on market or other conditions. Unless otherwise noted, the opinions provided are those of the speaker or author and not necessarily those of Fidelity Investments or its affiliates. Fidelity does not assume any duty to update any of the information.

Fidelity Medicare Services® is operated by Fidelity Health Insurance Services, LLC (“FHIS”), and FMR LLC (“FMR”) is the parent company of FHIS. Unless otherwise indicated, the information and items published in this document are provided by FHIS for informational purposes only and are not intended as tax, legal, or investment advice.

We do not offer every plan available in your area. Please contactwww.medicare.govor 1-800-MEDICARE (TTY users should call 1-877-486-2048), 24 hours a day/7 days a week or your local State Health Insurance Program (SHIP) to get information on all of your options.

Fidelity Medicare Services (“FMS”) and Fidelity Brokerage Services LLC (“FBS”) are separate business entities. FMS is not a product or service of FBS. Other than certain demographic information such as name, address and date of birth, the information you provide to FMS or FBS will not be shared with the other entity. Therefore, if you want FBS to consider the information you have provided to FMS in your investment planning with FBS, you must separately provide that information to FBS.

The services described are provided by FHIS. In this capacity, FHIS acts as an insurance broker or agent (collectively referred to as a “Producer”). FHIS and its representatives are appropriately licensed in all states in which they conduct business.

FHIS and its producers are certified representatives of insurance carriers that provide Medicare Supplement insurance as well as are certified representatives of Medicare Advantage (HMO, PPO and PFFS) organizations (and stand-alone prescription drug plans) with a Medicare contract.

The insurance products are issued by third-party insurance companies, which are unaffiliated with FHIS and FMR.

FHIS earns a commission paid by the insurance company based on your enrollment in a health plan. FHIS agents and representatives are not compensated based on your enrollment in a health plan and do not receive commissions from third-party insurance companies.

ATTENTION: Medicare has neither reviewed nor endorsed the information in this document/website. Fidelity Medicare Services, FHIS, and FMR are not connected with or endorsed by the U.S. government or the Centers for Medicare & Medicaid Services.

For a complete list of available plans, please contact 1-800-MEDICARE (TTY users should call 1-877-486-2048) 24 hours a day/7 days a week or consult www.medicare.gov.

This may be considered an advertisement or solicitation for insurance.

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1 Estimate based on a single person retiring in 2025, 65-years-old, with life expectancies that align with Society of Actuaries' RP-2014 Healthy Annuitant rates projected with Mortality Improvements Scale MP-2020 as of 2022. Actual assets needed may be more or less depending on actual health status, area of residence, and longevity. Estimate is net of taxes. The Fidelity Retiree Health Care Cost Estimate assumes individuals do not have employer-provided retiree health care coverage, but do qualify for the federal government’s insurance program, original Medicare. The calculation takes into account Medicare Part B base premiums and cost-sharing provisions (such as deductibles and coinsurance) associated with Medicare Part A and Part B (inpatient and outpatient medical insurance). It also considers Medicare Part D (prescription drug coverage) premiums and out-of-pocket costs, as well as certain services excluded by original Medicare. The estimate does not include other health-related expenses, such as over-the-counter medications, most dental services and long-term care.

2 Social Security Administration Historical and Projected Population Estimates 1940-2100 (2023)

3 Fidelity Investments 2025 State of Retirement Planning Study

4 With respect to federal taxation only. Contributions, investment earnings, and distributions may or may not be subject to state taxation.

5 Devenir Research 2024 Year-End HSA Market Statistics & Trends

6 “2022 Devenir & HSA Council Demographic Survey,” Devenir Research, July 13, 2023, https://www.devenir.com/wp-content/uploads/2022-Devenir-and-HSA-Council-Demographic-Report.pdf

7 Fidelity Health Thought Leadership Benefit Plan Participant Survey, fall 2023, Q14: “[That Health Savings Accounts (HSAs) can be used as an investment and retirement savings vehicle] Overall, how aware are you of each of the below?” Sample included 688 consumers ages 55 or older without an HAS

8 This CARAVAN study presents the findings of a survey among a sample of 2,009 U.S. adults ages 50+. Interviewing was conducted on June 27-July 2, 2024 by Big Village, which is not affiliated with Fidelity Investments. The results may not be representative of all adults meeting the same criteria as those surveyed.

9 Morningstar rated 10-11 retail HSA providers for HSAs as a spending account to cover current medical costs and HSAs as an investment account to save for future medical expenses. Results published in 2019, 2020, 2021, 2022, 2023, and 2024 “Health Savings Account Landscape.”

10 Devenir Research 2024 Year-End HSA Market Statistics and Trends

How Fidelity's estimate of $172,500 breaks down, on average

Their backgrounds stand out. And not in a good way.

Two bankruptcies and six law enforcement jobs in three years. An allegation of lying in a police report to justify a felony charge against an innocent woman — an incident that led to a $75,000 settlement and criticism of his integrity. A third job candidate once failed to graduate from a police academy, then lasted only three weeks in his only job as a police officer.

Their common bond: All were hired recently by U.S. Immigration and Customs Enforcement during an unprecedented hiring spree — 12,000 new officers and special agents to double its force — after the agency received a $75 billion windfall from Congress to enact President Donald Trump's mass deportation campaign.

The president put a premium on swift action, and for ICE that meant rapid-fire recruitment and hiring, which in turn led to new employees with questionable qualifications. Their backgrounds and training have come under scrutiny after numerous high-profile incidents in which ICE agents used excessive force.

“If vetting is not done well and it’s done too quickly, you have higher risk of increased liability to the agency because of bad actions, abuse of power and the lack of ability to properly carry out the mission because people don’t know what they are doing,” said Claire Trickler-McNulty, who served as an ICE official during the Obama, first Trump and Biden administrations.

The agency has said the majority of new hires are police and military veterans. But evidence is mounting that applicants with questionable histories were either not fully vetted before they were brought on or were hired in spite of their past, an investigation by The Associated Press found.

On Thursday, prosecutors announced felony assault charges against ICE officer Gregory Donnell Morgan Jr. for allegedly pointing a handgun at the occupants of a car after pulling alongside them on a Minneapolis-area highway in February. Court records show Morgan had a history of financial problems, and the police department in Alexandria, Virginia, said he was an entry-level recruit for six weeks in 2022 but never completed its police academy. It is unclear when he started at ICE, which didn't return messages seeking comment.

ICE’s acting director, Todd Lyons, said during a congressional hearing in February that he was proud of the hiring campaign, which drew more than 220,000 applications. “This expansion of a well-trained and well-vetted workforce will help further ICE’s ability to execute the president’s and secretary’s bold agenda,” he said.

Unlike many local law enforcement agencies, ICE said it shields the identity of employees to protect them from harassment, making a full accounting of the new hires impossible.

The AP focused on more than 40 officers who recently made public their new jobs as ICE officers on LinkedIn pages, using public records to check their backgrounds. All but one were male.

While most of them had conventional qualifications as former correctional officers, security guards, military veterans and police officers, it's unclear how many should have potentially been disqualified because AP did not have access to their full personnel files. But several had histories of unpaid debts that resulted in legal action, two had filed for bankruptcy and three others had faced lawsuits that alleged misconduct in prior law enforcement jobs, the AP found.

Marshall Jones, an expert on police recruiting at the Florida Institute of Technology, said it's hard to get a full picture of ICE's new employee pool without more data. But he said ICE has likely hired some “less than ideal candidates” who meet minimum requirements but would be passed over in a normal hiring cycle.

“If you’re hiring hundreds or thousands of people, even with the best of background processes, there are going to be outliers,” he said. “The question is, are these normal outliers from human beings doing things, or is there a systemic challenge in properly vetting folks if there are issues?”

The Department of Homeland Security, ICE’s parent agency, did not answer questions about specific hiring decisions. But it acknowledged some applicants received “tentative selection letters” and offers to begin working on a temporary status before they had been subjected to full background checks.

“ICE is committed to ensuring its law enforcement personnel are held to the highest standards and rigorously vets them throughout the hiring process,” the department said. “Vetting is an ongoing process, not a one-time occurrence.”

The process includes reviewing their criminal histories and credit scores and conducting background investigations that include interviewing prior employers and other associates, which can take weeks. But the deluge of hires has strained the agency, which promised signing bonuses of up to $50,000 and advertised that college degrees were not required.

An internal memo, first reported by Reuters in February, told ICE supervisors that if they receive “derogatory information about a newly hired employee’s conduct” they should refer the allegations to an internal affairs unit for investigation. Such information could include the employees’ termination or forced resignations, the memo said.

Among the new hires is Carmine Gurliacci, 46, who resigned as a police officer in Richmond Hill, Georgia, to join ICE in Atlanta in December, according to a resignation letter obtained by AP.

He filed for bankruptcy in 2022, saying he had no income and had been unemployed for two years after moving from New York to Georgia, court filings show. He said he was living with a friend and doing chores in exchange for housing, listing tens of thousands of dollars of unpaid loans, bills, child support and other debts. He also had filed for bankruptcy in 2013 in New York, when he listed $95,000 in liabilities, records show.

Serious financial problems are “a pretty big red flag” because they might make employees susceptible to bribes or extortion, which have been problems at ICE, Trickler-McNulty said.

After his 2022 bankruptcy petition was approved, Gurliacci rejoined the work force, hopping to six Georgia law enforcement agencies within three years, each time resigning before moving on, records obtained by AP show.

He left one campus security job in 2023, citing “unforeseen personal issues that render me unable to fulfill my duties,” a resignation letter shows. But he then began working for the Butts County Sheriff's Office soon after.

He lasted months there before moving to the Chatham County Sheriff’s Office, where he quit after two months on the job, records show. The federal government recently obtained his Chatham County personnel file as part of a background check, two months after he started at ICE.

Reached by phone, Gurliacci told a reporter he would call back. He never did and did not respond to follow-up messages.

Another new hire is Andrew Penland, 29, who joined ICE after resigning in December as a sheriff’s deputy in Greenwood County, Kansas.

Penland had spent most of his career as a deputy in Bourbon County, Kansas, but left last year after facing a lawsuit alleging he arrested a woman on false allegations in 2022. The county’s insurer paid $75,000 to settle the case, the agreement shows.

The woman, June Bench, recounted in an interview what happened. One of her neighbors, a county official, claimed Bench had purposely made a wide turn and nearly hit him with her car.

Penland responded to the property. Body camera video shows he urged the neighbor to press charges and told the man Bench would go to jail but he would not have to testify in court because it would get resolved through a plea.

Bench denied the allegation and said it was part of a personal dispute. But Penland arrested her on a felony assault charge, took her to jail and seized her car. Penland wrote in a report that he watched surveillance video showing her neighbor jumping out of the way of her speeding car.

It took a week for Bench to get out of jail and more than a year to defeat the charge, which was dismissed for lack of evidence. When she obtained the video Penland cited as proof, it showed her car appearing to make a routine turn and no near-collision with the neighbor.

Bench said she was outraged to learn Penland had been hired by ICE.

“That’s scary to me. He abuses his power,” she said.

After being reached for comment, Penland deactivated his LinkedIn account and alerted ICE to the inquiry but did not respond to AP.

A third new ICE hire, Antonio Barrett, initially failed to graduate from a Colorado law enforcement academy in 2020, one of two students who did not “complete portions of the academy” and received “an incomplete grade,” an email obtained by AP shows.

He finished the program after a community college arranged a special one-day training and test for him, and landed a job at the police department in La Junta, Colorado, in July 2020. But he only worked three weeks before resigning and never worked in local policing again.

Previously, Barrett worked as a corrections officer at a Colorado prison.

He was accused in a lawsuit of excessive force for inflicting pain on a handcuffed inmate when he and another colleague forcibly removed the man from a wheelchair in 2017. But state officials argued their actions were not excessive and a court agreed, dismissing the case.

Barrett didn't respond to a message seeking comment.

ICE has denied removing any training requirements, saying new recruits receive 56 days of training and 28 days of on-the-job training. The agency said that most of the new officers have already completed law enforcement academies.

But former ICE academy instructor Ryan Schwank testified in February that agency leaders cut training on the use of force, firearms safety and the rights of protesters. He said the new recruits include some as young as 18 who lack college degrees and whose primary language is not English.

“We’re not giving them the training to know when they’re being asked to do something that they’re not supposed to do, something illegal or wrong,” he said.

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AP reporter Claudia Lauer contributed to this report.

FILE - Federal immigration enforcement agents detain an individual near West 27th Street and South Ridgeway Avenue in the Little Village neighborhood of Chicago, Dec. 16, 2025. (Anthony Vazquez/Chicago Sun-Times via AP, File)

FILE - Todd Lyons, senior official performing the duties of the director at U.S. Immigration and Customs Enforcement, listens during a Senate Homeland Committee hearing on Capitol Hill in Washington, Feb. 12, 2026. (AP Photo/Tom Brenner, File)

FILE - Immigration and Customs Enforcement (ICE) trainees practice shooting handguns at the indoor firing range at the Federal Law Enforcement Training Centers (FLETC) in Brunswick, Ga., Aug. 21, 2025. (AP Photo/Fran Ruchalski, File)