Financial expert Suze Orman and the AARP are both sounding the alarm about retirement expenses that keep outpacing savings. Health care sits at the center of that warning, but insurance, vehicle, and relocation costs are accelerating too.
A 65-year-old couple retiring in 2025 will need approximately $345,000 in after-tax savings to cover health care costs in retirement, according to Fidelity Investments, and that figure does not include long-term care.
Orman cautioned in her blog that this assumption can undermine a retirement plan faster than any market downturn ever could.
Medicare leaves retirees exposed to steep out-of-pocket health care bills
Medicare Part A covers hospital stays, but the 2026 inpatient deductible alone is $1,736 per benefit period, the Centers for Medicare & Medicaid Services confirmed.
Original Medicare also excludes dental care, vision exams, and hearing services that become more necessary with age.
Orman urged anyone enrolled in Original Medicare to carry a supplemental Medigap policy that fills gaps most retirees overlook. “Anyone with Original Medicare should also have a robust Medigap policy,” Orman wrote.
Life expectancies are rising, medical costs are rising, and the length of time spent in care settings is rising as well…With advances in medical technology and changing behaviors, it’s much more common for folks to need several years of skilled nursing care
A healthy 65-year-old man retiring in 2025 can expect to spend approximately $275,000 on healthcare throughout retirement, while a healthy 65-year-old woman can expect to spend approximately $313,000, according to Milliman’s 2025 Retiree Health Cost Index.
The gap reflects women’s longer life expectancy. These estimates assume Original Medicare with Medigap Plan G and Part D coverage
When long-term care enters the picture, financial pressure on retirees and their families intensifies well beyond standard medical costs. The national median cost of assisted living reached $74,400 annually in 2025, a 5% increase from the prior year, according to CareScout.
Home insurance and auto expenses are surging for older Americans
Homeowners across the country watched their insurance premiums surge by an average of 24% between 2021 and 2024, the Consumer Federation of America found.
Skyrocketing rebuilding costs and more frequent natural disasters are driving premium increases across all regions. Insurance data firm Verisk tracked a 4.2% rise in total home reconstruction expenses (and a 4.07% rise in residential reconstruction costs specifically) nationwide from July 2024 to July 2025.
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Auto insurance adds another layer of pressure for retirees who depend on personal vehicles for daily transportation and medical visits.
Full-coverage car insurance is expected to rise 4% by the end of 2025 and could jump 7% if tariffs are prolonged and increase insurer losses, an Insurify study found.
Tyler End, a certified financial planner and co-founder of Retirable, suggested that retirees explore community ride programs and senior transportation services.
“Even some Medicare plans will offer services, such as Uber rides to doctor appointments,” Tyler told AARP.
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Relocation and home modification costs catch retirees off guard
Americans spent an average of $2,050 on relocations in 2024, and long-distance moves exceeding 100 miles cost roughly $3,291, according to Anytime Estimate’s Moving Trends Survey.
Moving companies are compounding that burden, with 94% planning to raise prices by 10% or less in 2025, according to SmartMoving’s 2025 State of Moving report.
Retirees considering a continuing care retirement community face an even steeper financial barrier than they anticipated before leaving the workforce.
The average CCRC entrance fee surpassed $480,000 in 2025, up from approximately $460,000 in 2024, according to the National Investment Center for Seniors Housing and Care. Over five years, the average fee has risen by $88,386, a cumulative 22.3% increase.
For retirees who prefer to stay in their current home, retrofitting for accessibility can cost between $5,000 and $20,000, according to the home remodeling resource Fixr. Three out of four adults over age 50 want to remain in their homes as they age, a 2024 AARP survey found.
Tariffs on imported construction materials are driving up renovation costs for homeowners planning aging-in-place projects, the National Association of Home Builders warned. Jeremy Clerc, CEO of Assisted Living Magazine, recommended getting a home safety assessment done years in advance to phase in modifications.
Orman and planners on preparing for rising retirement health costs
Orman emphasized that younger Americans need to absorb these lessons long before reaching Medicare eligibility at 65. “I sure hope those of you who are not yet 65 pay close attention, too,” Orman wrote on her blog about Medicare costs.
Tyler, the certified financial planner at Retirable, recommended creating a dedicated health care savings fund separate from general retirement accounts. That approach helps prevent a single large medical bill from derailing a retirement plan designed to last three decades.
Matt Donaghue, managing member at Mission Financial Planners in San Antonio, clearly summed up the disconnect between expectations and reality for retirees. “Beyond the glossy brochures promising cruises and golf, retirees face a more sobering financial reality,” Donaghue told AARP.
Whether retirees are five years from retirement or twenty years away, the expenses flagged by Orman and the AARP are not slowing down. Financial planners interviewed by AARP have suggested that identifying these climbing costs early and building a financial plan around them can help retirees better absorb the cost pressures.
Related: Retirement relocations have a hidden price tag most miss
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