A popular Gen X mantra for minimizing milestones is that age is just a number. However, today’s middle-aged adults and near-retirees should consider that some numbers are more important than others.
Among them is the number $172,500 — that’s how many dollars Fidelity reported the average senior who turned 65 in 2025 will spend on medical expenses during the rest of their lives. It is, indeed, just a number — but one that Gen Xers should plan for, no matter how young they might feel.
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Young Gen Xers Should Plan To Spend a Quarter-Million on Retirement Health Care
According to the most recent U.S. Bureau of Labor Statistics CPI report, the current inflation rate is 2.4%. Presuming that rate holds for 19 years when the youngest Gen Xers (46), turn 65, they’ll need to budget for about $274,560 in retirement healthcare spending. However, even that enormous sum is wishful thinking, as the Fidelity report noted that health care inflation has outpaced general inflation for much of the 21st century.
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Age Is Just One Number That Should Matter to Gen X
The Fidelity study identified stark differences in how much retirees spend on healthcare depending on when they retire and how they prepare. The key takeaway is that getting an early jump on planning is the key to success and Gen X still has time.
While they might think age is just a number, in terms of financial planning, it’s actually a series of highly consequential numbers, including:
- 62: The first year of Social Security eligibility. Many who retire early claim benefits as soon they can just to cover health care costs before Medicare eligibility kicks in.
- 30%: The permanent benefit reduction beneficiaries suffer for claiming Social Security at 62.
- 65: The age of Medicare eligibility, when early retirees can finally stop paying for private insurance. However, Medicare is far from free.
- 10%: The percentage of out-of-pocket costs that Medicare beneficiaries spend on prescription drugs.
- 43%: The amount they spend on Medicare Part B and Part D premiums.
- 47%: The amount that goes to deductibles, co-payments and co-insurance.
Forget Numbers — Gen X Should Focus on 3 Letters: HSA
More than half of the Fidelity study’s respondents (52%) said they don’t expect ever to be able to quit working and fully retire, with the exorbitant cost of healthcare as a primary roadblock.
Unsurprisingly, the report found that those who maximized tax-advantaged contributions, secured their full employer match and engaged in other general retirement planning best practices were best able to manage medical expenses.
However, Fidelity joins a chorus of industry experts and institutions like Morgan Stanley in touting the under-utilized power of health savings accounts (HSAs) and their unique triple tax advantage, which IRAs and 401(k) plans can’t match.
- HSA contributions are tax-deductible
- Invested contributions grow tax-free
- Qualified withdrawals are tax-free, both now and in retirement
HSAs can go a long way in helping Gen X manage the numbers that matter more than age — the dollars they keep and those they give to the doctor.
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This article originally appeared on GOBankingRates.com: Gen X Calls Age ‘Just a Number’ — But $172K in Retirement Health Costs Begs To Differ
