Healthcare costs in retirement and long-term care are two separate expenses, and Medicare treats them very differently. Planning for both before you retire keeps either one from disrupting your income plan.
If you’re a few years from retirement, or already there, you’ve heard that healthcare is one of the biggest expenses ahead. What you may not have heard is a clear answer on what Medicare will and won’t pay for.
That’s normal. An employer plan handled the details for most of your career.
This guide gives the big picture and points to our detailed articles, including what care costs in North Carolina.
Key Takeaways:
- Medical care and long-term care are different costs, and Medicare treats them differently.
- Medicare generally doesn’t pay for ongoing personal care, so that cost may fall on your savings, insurance, or family.
- Plan for both before you retire so they’re built into your withdrawal plan.
How do healthcare costs change before and after Medicare?
Healthcare costs in retirement come in two phases: before Medicare, when you buy your own coverage, and after, when Medicare pays much but not all.
Before 65
Most people become eligible for Medicare at age 65. Retire earlier, and you’ll need your own health insurance until then.
The usual choices are a spouse’s employer plan, COBRA from your former employer, or a Health Insurance Marketplace plan. Each carries a real monthly cost that belongs in your budget for every year before Medicare.
After 65
Medicare isn’t free. You’ll still pay premiums, deductibles, prescription drug coverage, and out-of-pocket costs.
Your Initial Enrollment Period lasts 7 months, starting 3 months before the month you turn 65 and ending 3 months after it, according to Medicare.gov. Missing it can mean a late enrollment penalty for as long as you have Part B, and the penalty grows the longer you wait. You generally avoid it if you qualify for a Special Enrollment Period, such as one based on job coverage, but COBRA doesn’t count as job coverage for this.
Fidelity’s 2026 Retiree Health Care Cost Estimate, released July 21, 2026, puts average lifetime health care spending at $185,500 for a single person retiring at 65 this year. It assumes Original Medicare plus Part D and no retiree coverage from an employer, and it doesn’t include long-term care.
For enrollment timing and coverage choices, see our guide to Social Security and Medicare planning for Charlotte retirees.
How is long-term care different from medical care?
Medical care treats an illness or injury. Long-term care helps with daily life, and most health coverage, including Medicare, isn’t built to pay for it.
What counts as long-term care?
Long-term care is ongoing help with everyday activities like bathing, dressing, and eating, often for months or years.
It usually happens in one of three settings:
- Care at home: an aide or family member helps with daily activities where you live.
- Assisted living: a residence that provides housing and help with daily activities.
- Nursing home care: a facility with round-the-clock supervision and nursing staff.
The federal Administration for Community Living (ACL), on a page last updated in 2020, estimates that someone turning 65 has almost a 70% chance of needing some type of long-term care services. Needs vary widely from person to person, and more people receive care at home than in facilities.
What does Medicare cover?
Medicare generally doesn’t cover custodial care, the ongoing personal care described above, when that’s the only care you need. It may cover short-term skilled nursing or rehab care, up to 100 days, after an inpatient hospital stay of at least 3 days, according to Medicare.gov.
That’s a recovery benefit, not years of care. For the full rules, read our article on what Medicare covers for long-term care.
Medicare Advantage plans may have their own rules, so ask your plan directly.
How do these costs affect your retirement income plan?
Care costs come out of the same savings that fund your retirement, so they shape how much you withdraw and from where.
How can they change your withdrawals?
A large or unexpected care need can change how much you withdraw and which accounts you draw from first, depending on your situation.
A lot of people plan to handle care if it happens. Deciding ahead of time keeps the choice with you and your family, instead of forcing a sale of investments at a poor time.
For couples, one partner’s care can reduce the income the other lives on.
What do care costs look like in North Carolina?
Costs depend on the type of care and where you receive it. Care in Charlotte may cost more or less than elsewhere in the state.
For current figures by type of care, see our breakdown of the cost of long-term care in North Carolina.
How can you plan to pay for healthcare and long-term care?
Most people prepare in one of three ways: set aside savings for care, buy insurance that pays for care, or use a mix. The right choice depends on your health, your family, and how much you’ve saved.
Savings keep you in control, but a long care need can draw them down. Insurance shifts some of the cost, but you pay premiums whether or not you use it.
If you’re eligible, a Health Savings Account (HSA) can help with healthcare costs. Once you enroll in Medicare, you can no longer contribute, according to IRS Publication 969. Part A coverage can start up to 6 months before you sign up, so Medicare.gov suggests stopping HSA contributions 6 months before you retire or apply for Social Security.
You can still spend the balance tax-free on qualified medical expenses. If you’re 65 or older, that includes some Medicare premiums, but not Medigap premiums.
We’ll cover long-term care insurance in an upcoming article, “Long-Term Care Insurance: Is It Worth It After 50?”
Medicare.gov lists Medicaid as one way to get help with long-term care if you meet your state’s eligibility requirements.
What mistakes should you avoid?
In my experience, three mistakes come up most often:
- Assuming Medicare covers long-term care. It generally doesn’t pay for custodial care, the daily help many people eventually need.
- Ignoring the years before Medicare. Retiring before 65 usually means finding your own coverage until Medicare starts.
- Planning only for medical costs. Fidelity’s healthcare cost estimate leaves out long-term care, so it needs its own line in your plan.
What should you decide before you retire?
Settle these five before your last day of work:
- How you’ll cover health insurance until Medicare starts, if you retire before 65.
- When you’ll enroll in Medicare and which coverage you’ll choose.
- How you’ll budget for premiums, prescriptions, and out-of-pocket costs.
- How you’d pay for long-term care: savings, insurance, or a mix.
- Who would make healthcare and financial decisions for you if you couldn’t, through powers of attorney.
Our guide to retirement planning for Charlotte residents over 50 covers the full picture. Rules and costs change, so revisit these choices regularly.
Frequently Asked Questions
1. Does Medicare pay for long-term care?
Generally, no. Medicare doesn’t cover custodial care, like help with bathing or dressing, when that’s the only care you need. It may cover up to 100 days of skilled nursing or rehab care after an inpatient hospital stay of at least 3 days.
2. How much should I plan for healthcare costs in retirement?
It depends on your health, coverage choices, and location. Fidelity’s 2026 estimate of $185,500 for a single 65-year-old is one published estimate, and it excludes long-term care.
3. How do I get health coverage if I retire before 65?
Common options include a spouse’s employer plan, retiree coverage from a former employer, COBRA, or a Health Insurance Marketplace plan. Budget for the premium every year until Medicare begins.
4. Should I plan for long-term care before I retire?
Yes. Waiting until a health event can force choices on a tight timeline.
5. Does a Medicare Advantage plan cover long-term care?
Plans differ. According to Medicare.gov, Medicare Advantage plans usually don’t help pay for nursing home care unless the facility has a contract with the plan. Ask your plan what it covers, including any extra benefits.
6. How much does long-term care cost in North Carolina?
It depends on the type of care and where you receive it. Our North Carolina cost article, linked above, has the figures.
Get help planning for healthcare and long-term care
Calamita Wealth Management is a fee-only financial planning firm in Charlotte focused on retirement planning. We plan healthcare, long-term care, income, and savings together.
We look at your expected healthcare costs, how you might pay for care, and how both fit your withdrawal plan. The goal is to decide before a health event, not after.
Contact Calamita Wealth Management to start that conversation.