Health care continues to be one of the largest expenses in retirement – and retirees need to plan for that, according to Fidelity, which just released its 23^rd annual Retiree Health Care Cost Estimate, which says retirees may need $165,000 to cover health care expenses – a jump of 5% from 2023.

"Health care costs are among the most unpredictable expenses, especially when it comes to retirement planning," said Robert Kennedy, SVP, Workplace Consulting at Fidelity. "As we approach the fall open enrollment period for health care benefits, it's a great time for Americans to be proactive with their financial planning efforts."

According to Fidelity, there continues to be a disconnect for many Americans between the actual projected costs and how much they believe they will spend on health expenses in retirement. The average American estimates costs will be about $75,000 – less than half of Fidelity's calculation.