Healthcare Costs in Retirement Planner

Healthcare expenses are one of the most important and often overlooked aspects of retirement planning. BlueLine Advisors works with individuals and families across New England and nationwide to help evaluate long-term retirement healthcare considerations.

The expense most pre-retirees underestimate

Healthcare is one of the largest and most underestimated retirement expenses. This tool illustrates projected lifetime healthcare costs across two distinct phases: pre-Medicare gap years (often the most expensive) and Medicare years (Parts B, D, Medigap, and IRMAA surcharges). Figures use 2026 Medicare rate estimates.

📅 2026 Medicare rates ⏱️ Pre-65 and post-65 modeled 🔒 No sign-up required

About You

Current age

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Planned retirement age

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Plan through age

yrs

Coverage type

Income & Plan Choices

Expected retirement annual income

Medigap / Advantage choice

Pre-65 coverage source

Healthcare inflation

Average Annual Cost —

Across the entire retirement horizon. Annual cost varies substantially between pre-Medicare gap years and Medicare years.

Two Distinct Cost Phases

Healthcare costs in retirement typically split into two very different periods. Understanding the gap years matters most for those planning to retire before 65.

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Gap Years (Pre-Medicare)

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Total Cost in Gap Years

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Annual cost (year 1)—

Coverage source—

Avg. monthly premium—

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Medicare Years

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Total Cost in Medicare Years

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Annual cost (year 1)—

Part B + IRMAA—

Medigap / Advantage—

Part D + IRMAA—

Estimated out-of-pocket—

Medicare provides baseline coverage but requires supplemental insurance, prescription drug coverage, and out-of-pocket payments. IRMAA surcharges apply to higher-income retirees based on income from two years prior.

Where Your Income Places You in IRMAA

Medicare Part B and Part D premiums are higher for retirees with income above certain thresholds (IRMAA — Income-Related Monthly Adjustment Amount). Brackets are based on Modified Adjusted Gross Income from two years prior.

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Annual Healthcare Costs Over Retirement

How costs may evolve year by year. The gap years (orange) are often dramatically more expensive than Medicare years — a frequently overlooked factor in early retirement planning.

Gap years (pre-Medicare) Part B + IRMAA Medigap / Advantage Part D + IRMAA Out-of-pocket

Important Assumptions This illustration uses estimated 2026 Medicare rates: Part B standard premium of approximately $206/month, Part D base premium of approximately $40/month, and IRMAA brackets based on 2026 inflation-adjusted estimates (which may be revised). Medigap Plan G premiums average $150–$250/month nationally but vary by state, age, and underwriting. Medicare Advantage typically has lower or zero monthly premiums but higher out-of-pocket exposure. Pre-Medicare gap-year costs are estimates: ACA marketplace plans range $800–$2,500/month for individuals in their early 60s without subsidies; COBRA typically equals the employer's group rate plus a 2% fee. The tool does not model: long-term care, dental and vision, state-specific Medigap pricing, ACA premium tax credit eligibility, employer retiree benefits, HSA strategies, or VA benefits. Healthcare cost inflation has historically averaged 4–6% but varies by year.

Want to discuss healthcare planning as part of your overall retirement plan?

Healthcare costs interact with income planning, Social Security timing, Roth conversion strategies, and withdrawal sequencing — particularly through the IRMAA surcharge structure. Managing income across the two-year IRMAA lookback can meaningfully reduce lifetime Medicare premiums for higher-income retirees. A BlueLine Advisors consultation can help review how healthcare planning fits the rest of your strategy.

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Important Disclosures

This material is provided by BlueLine Advisors LLC ("BlueLine") for informational and educational purposes only and is not intended as investment, tax, or legal advice. Nothing herein should be construed as a recommendation to buy or sell any security or to adopt any investment strategy. BlueLine Advisors LLC is a registered investment adviser with the U.S. Securities and Exchange Commission. Registration with the SEC does not imply a certain level of skill or training.

All information reflects the views of BlueLine as of the publication date and is subject to change without notice. Forward-looking statements, projections, outlooks, and illustrative examples are not guarantees of future performance and are based on assumptions that may not be realized. Past performance is not indicative of future results. Investing involves risk, including the possible loss of principal. Asset values fluctuate, and investors may receive back less than the amount invested. Diversification does not ensure a profit or protect against loss in declining markets.

Benchmark and index performance is shown for reference only. Indices are unmanaged, are not available for direct investment, and do not reflect the deduction of advisory fees, transaction costs, or other expenses. Any charts, graphs, or tables are for illustrative purposes only and should not be construed as investment advice.

Key assumptions embedded in this tool include: estimated 2026 Medicare rates (Part B standard premium ~$206/month, Part D base ~$40/month), 2026 IRMAA brackets based on modified adjusted gross income from two years prior, Medigap Plan G national-average premiums, and a user-specified healthcare inflation rate. Pre-Medicare gap-year costs use national-average ACA, COBRA, and private-market estimates. This tool does not model long-term care expenses, dental or vision, state-specific Medigap pricing, ACA premium tax credit eligibility, employer retiree benefits, HSA strategies, or VA benefits. Medicare premiums and IRMAA brackets change annually. Actual costs will vary. Consult a qualified financial professional and a licensed Medicare or insurance advisor before making decisions.