This estimate represents an increase of 4 % over last year’ s and is the latest in a continuous rise in such projections since the Boston-based firm began publishing the estimates in 2002, when the study projected healthcare costs of $ 80,000 for 65-year-olds.

“ Year after year, so many Americans underestimate how much they’ ll need to save to cover healthcare costs in retirement,” said Shams Talib, head of Fidelity Workplace Consulting, in a press release. He added that these costs will have an impact on people’ s retirement savings.

To arrive at the estimate, Fidelity assumes retirees will be enrolled in Medicare Parts A, B and D, and that they will be on the hook for premiums, co-payments, and other out-ofpocket costs for medical care and prescription drugs. The estimate does not include long-term-care expenses.

“ While 37 % of Americans plan to rely on Medicare to cover healthcare costs in retirement, Fidelity’ s estimate... shows how quickly out-of-pocket expenses can add up. Retirees are still on the hook to cover things like Medicare premiums, over-the-counter medications, dental and vision care, and other types of added expenses like long-term care,” the report said.

Fidelity noted that healthcare costs are rising at a time when company surveys have shown decreasing confidence among Americans about their ability to retire comfortably. In March, a Fidelity survey found that 67 % of Americans feel confidence about their retirement prospects, a figure that was seven percentage points lower than the previous year’ s.

According to a recent Fidelity study, about one in five Americans said they had never even considered healthcare costs in their retirement. Among Generation Xers, that number is one in four.

— FA Staff

New Tax Rules Demand Advisors’ Attention

Continued from page 9

Inauguration Day, January 20, 2025.“ Previously, bonus depreciation was always temporary,” says Kevin Gehrmann, a CPA and tax partner at Wiss & Company in Florham Park, N. J. The bonus depreciation’ s permanence“ provides a lot of confidence for business owners to modernize their operations and scale more quickly. It will really help closely held businesses,” Gehrmann says.

Expansion Of 529 Plans

The One Big Beautiful Bill Act also made changes to 529 plans; these plans allow contributions to grow tax-free when used for qualified education expenses, and the new law expands the list of K-12 costs that qualify. As of July 5,“ You can take money out of a 529 plan tax-free for tutoring, textbooks, test preparation, online learning materials and special education expenses like speech therapy, occupational therapy, and adaptive learning software,” explains Jeremy Finger, CEO of Riverbend Wealth Management, in Myrtle Beach, S. C.

Money in 529 plans can now be used for post-secondary educational, credentialing and continuing education costs, he adds.

What’ s An Advisor To Do?

Beyond encouraging clients to put unexpected tax savings to work wisely, advisors should also push to update clients’ plans under the new law and share the changes with their accountants and attorneys.“ Get all of the data in front of the right people to make the best decision possible for the client,” advises Jordan Hickey, a partner at Capital Wealth Management in Glastonbury, Conn.

Advisors will at the same time be able to use these new rules to boost their credibility and offer their clients as much education and resources as possible, Hickey says.“ It’ s the perfect opportunity, if you haven’ t already, to establish yourself as a trusted individual among your clients’ many professional advisors.”

— Eric L. Reiner

12 | FINANCIAL ADVISOR MAGAZINE | SEPTEMBER 2025 WWW. FA-MAG. COM