Your Health May Be Worth More Than Your 401(k)

Most of us were taught to prepare for retirement by watching one number. Our retirement account. How much is in the 401(k)? How much have we saved? When should we take Social Security? Can we afford to stop working?

Those are important questions. But I think there is another retirement number we don't talk about nearly enough: how healthy will you be when you get there?

After looking at the numbers, I've become convinced of something. Good health can be one of the most valuable financial assets you carry into retirement. And poor health can quietly become one of the biggest expenses.

That doesn't mean every illness can be prevented — genetics, accidents, and circumstances outside our control matter enormously. But it does mean that taking reasonable care of ourselves in our 50s and 60s may have a financial payoff that deserves a place right beside saving, investing, and paying down debt.

Fidelity's 2026 Retiree Health Care Cost Estimate says a 65-year-old retiring this year may need approximately $185,500 in after-tax savings just for health care during retirement — for one person, and up 7.5% from a year ago. That estimate doesn't include long-term care.

Think about that for a minute. You could spend decades putting money into a retirement account, only to discover that a substantial portion of it may eventually be needed for premiums, deductibles, prescriptions, copays, dental care, and other medical expenses. This is why I believe we should stop treating health as something separate from financial planning. Your body has a budget too. And when your health gets expensive, your financial budget usually feels it.

$185,500 is easier to dismiss as an abstract, faraway figure than it is to actually plan for. Spread it across a 20-year retirement, and it starts to look like something you can budget toward today.

Here's another mistake I see people make. They reach age 65 and think, "At least Medicare will take care of the medical bills." Medicare is incredibly important. But Medicare isn't free health care — and the share of your Social Security check it quietly absorbs has been climbing for two decades.

That's why two retirees with the exact same retirement income can have very different financial lives. One may have relatively manageable health expenses. The other may have multiple prescriptions, frequent specialists, mobility problems, and recurring procedures. Same Social Security check. Very different retirement.

Here's what that split can look like in practice. Both examples below are illustrative, not a prediction of any one person's costs.

The CDC reports that approximately 90% of the nation's $5.3 trillion in annual health care expenditures are for people with chronic and mental health conditions. Conditions such as heart disease, diabetes, stroke, and lung disease don't simply affect how we feel. They may affect:

Researchers using the long-running Health and Retirement Study have found real connections between serious health shocks and declining wealth.

A medical problem can become a money problem. That's when the connection becomes very real.

Of everything on the health checklist below, "work on strength, balance, and mobility" might sound like the least financial item on the list. It isn't. Falls are one of the most common — and most expensive — health events among people 65 and older.

There's another side of this that doesn't get enough attention. Good health may give you something extremely valuable: choice. Research from the Society of Actuaries Research Institute found that health is consistently the leading reason people retire earlier than planned — cited more often than reaching a savings goal, even among higher-income retirees.

If you're 58 and healthy enough to work until 65, you may have seven more years to save money, earn employer matches, reduce debt, and allow investments to grow. If poor health forces you out at 58, that seven-year runway can suddenly disappear. This is why I don't think retirement readiness should be measured only by your bank statement. It should also include your ability to keep working if you want or need to.

Here's where retirement health planning gets especially serious. According to Fidelity, citing federal data, someone turning 65 today has almost a 70% chance of eventually needing some form of long-term care.

And remember: those expenses generally aren't included in the $185,500 retirement health-care estimate. That's why protecting your health isn't simply about trying to live longer. It's also about trying to preserve independence for as long as reasonably possible. Every additional year you can safely dress yourself, prepare meals, drive, walk, shop, and manage your own household may have both a quality-of-life value and a financial value.

There's no single right answer here — just a set of trade-offs worth understanding well before you need one of them.

I'm not saying "exercise and you'll never have medical bills." That would be ridiculous. Someone can eat well, exercise every day, and still develop cancer, Alzheimer's disease, arthritis, or another serious condition. There are no guarantees.

If I were building my retirement plan today, I wouldn't have one checklist. I'd have two, sitting right beside each other.

If you're eligible for a Health Savings Account, it may be one of the most underused tools in retirement planning — money goes in tax-free, grows tax-free, and comes out tax-free when used for qualified medical expenses. For 2026, the contribution limits are:

When people talk about retirement planning, we hear a lot about the magic number. $500,000. $1 million. $2 million. But there may be another kind of retirement wealth: being able to walk comfortably, live independently, keep working part time if you choose, travel, manage your own home — and spend your retirement savings on your life instead of continually spending it on preventable health complications.

That's wealth too. And sometimes it's worth far more than we realize.

Take out a piece of paper and make two columns: My Financial Retirement and My Health Retirement. Under the first, write down three things you need to improve financially. Under the second, write down three health issues you've been ignoring or habits you know you could improve. Then choose one thing from each column and work on them together.

Small moves. Nothing dramatic. Because that's something I've learned about retirement — we spend years thinking there's going to be one giant decision that determines whether everything works out. Usually there isn't. Retirement is built from hundreds of small decisions. Some involve dollars. Some involve our health. The best retirement plan may be the one that protects both.

Quick Recap

Health care in retirement can cost $185,500 or more for one person — and that's before long-term care.

Medicare premiums and cost sharing already absorb a rising share of the average Social Security check.

A single stroke or lung disease diagnosis has been linked to a $25,000–$29,000 drop in household net worth.

Falls alone cost the country roughly $80 billion a year — and balance work is one of the few habits with a direct financial payoff.

Health is one of the most commonly cited reasons people retire earlier than planned.

Nearly 70% of people turning 65 will eventually need some form of long-term care.

A healthier body. A healthier bank account. And enough of each to enjoy the years we've worked so hard to reach. There isn't much value in reaching retirement with plenty of money but no ability to enjoy it. And there isn't much comfort in reaching retirement healthy but without enough money to live. The goal should be both.

Educational Disclaimer: The content in this article is provided for general informational and educational purposes only. It does not constitute financial, legal, tax, or professional advice. Savings figures cited are general estimates based on publicly available 2025–2026 industry research and may not reflect your individual results. Program terms, discount availability, and savings amounts are subject to change by each retailer without notice. Always verify current program terms directly with the store or service provider before making purchasing decisions. The O55 Report does not receive compensation from any retailer or loyalty program mentioned in this article. Content is attributed to Mike Bridges, The O55 Report. © 2026 The O55 Report. All rights reserved. Visit www.theo55report.com for more free guides.

With care,

Mike Bridges

Founder, The O55 Report