Limits to out-of-pocket prescription drug costs outlined in the Inflation Reduction Act of 2022 will temporarily offset the overall inflationary trend of health care costs for retirees for the first time in nearly a decade. According to Fidelity Investments' 2023 Retiree Health Care Cost Estimate, a 65-year-old retiring this year can expect to spend an average of $157,500, or $315,000 per couple, in health care and medical expenses throughout retirement, unchanged from the firm's 2022 estimate. That estimate is nearly double the firm's 2002 estimate of $80,000 in health care expenses per retiree.

"This was the first time in nearly a decade that our Retiree Health Care Cost Estimate had stayed flat from the prior year, which was surprising to many," said Hope Manion, senior vice president and chief actuary, Fidelity Workplace Consulting. "The impact of recent legislation was part of the calculation, which means we accounted for the out-of-pocket cap on prescription drug spending by retirees, and that balanced out the general trend of rising inflation in health care costs."