BlueLine Advisors
Healthcare Costs in Retirement Planner
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 rates.
📅 Based on 2026 Medicare rates
⏱️ Pre-65 and post-65 modeled
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Estimated Total Lifetime Healthcare Cost
$485,000
For a couple retiring at 62 and planning through age 92, in inflation-adjusted dollars. Most pre-retirees significantly underestimate this figure.
Average Annual Cost
$16,200
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)
Ages 62–64
Total Cost in Gap Years
$78,000
3 years of pre-Medicare coverage
Annual cost (year 1)$24,000
Coverage sourceACA Marketplace
Avg. monthly premium$2,000
ACA marketplace plans without subsidies typically run $1,500–$2,500/month for a couple in their early 60s. Premium tax credits may apply if income is structured to qualify.
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Medicare Years
Ages 65–92
Total Cost in Medicare Years
$407,000
28 years of Medicare coverage
Annual cost (year 1)$9,400
Part B + IRMAA$2,510
Medigap / Advantage$3,600
Part D + IRMAA$960
Estimated out-of-pocket$2,300
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.
Currently in Tier 1
Room to next bracket
$45,000
At this income level, IRMAA adds approximately $0/month to your Medicare premiums. Crossing into the next bracket would add roughly $74/month per person.
Annual Healthcare Costs Over Retirement
How costs may evolve year by year. The gap years (orange) are often dramatically more expensive than Medicare years (blue) — a frequently overlooked factor in early retirement planning.
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, IRMAA brackets based on 2026 inflation-adjusted figures (which may be revised). Medigap Plan G premiums average $150–$250/month nationally but vary substantially 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% administration fee; private market and spouse-coverage estimates use national averages. The tool does not model: long-term care expenses (a separate and substantial risk), dental and vision (rarely covered by Medicare), state-specific Medigap pricing rules, ACA premium tax credit eligibility based on income strategy, employer retiree benefits, Health Savings Account funding strategies, or Veterans Affairs 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 asset 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 may fit into the rest of your retirement strategy.
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