Millions of seniors who get their prescription drug coverage through Medicare should brace for a sharp rise in premiums in 2026. A major federal subsidy program introduced just last year faces a significant reduction. 

The temporary financial support, credited with keeping premiums affordable in 2025, is set to be scaled back under new budget plans crafted by the Trump administration.

In 2025, the government injected $6.2 billion into Medicare Part D plans, trying to cushion seniors from ballooning prescription drug costs. The temporary boost held monthly premiums for basic drug plans at an average of $36—roughly 20% lower than projected without the aid, according to Avalere Health, cited in a report by the Wall Street Journal.

But the reprieve will be fleeting. Federal officials have confirmed that, starting in 2026, the monthly subsidy provided to insurers will drop from $15 to $10 per enrollee—a 40% reduction. 

The decision, made by the Centers for Medicare and Medicaid Services (CMS), reflects broader efforts to rebalance taxpayer spending and insurer responsibility.

“This is all about trying to maintain affordability against a massively increasing backdrop of expense,” said Chris Klomp, director of the Center for Medicare. Klomp added that continuing the full subsidy would have disproportionately benefited a few insurers at a steep cost to taxpayers.

Larger premiums for stand-alone Par D plans

The impact of the subsidy rollback will not be uniform. Analysts expect seniors in stand-alone Part D plans – often paired with traditional Medicare – will be hardest hit. Unlike Medicare Advantage plans, which typically bundle drug coverage into broader health benefits, stand-alone plans face fewer internal offsets to rising costs.

Under the updated framework:

• The cap on annual premium hikes will rise from $35 in 2025 to $50 in 2026.
• Insurers will shoulder a larger share of financial risk as federal protections against major losses are scaled back.
• The reduced subsidies will trim only about $13.50/month on average from premium increases.

For seniors on fixed incomes, the increases could represent a significant strain, especially for those managing multiple chronic conditions or expensive medications.

What seniors can do

Seniors are urged to carefully review their options during the 2025 open enrollment period. Comparing plans, and factoring in out-of-pocket costs, not just premiums, will be more important than ever.

Resources like the Medicare Plan Finder and state SHIP (State Health Insurance Assistance Program) counselors can help navigate the increasingly complex landscape.

Fidelity Investments has released its 24th annual Retiree Health Care Cost Estimate, predicting that a 65-year-old retiring in 2025 will need an average of $172,500 to cover health care and medical expenses throughout retirement. 

The new estimate represents a 4% increase from last year and continues a long-term upward trend since the firm first published an $80,000 estimate in 2002.

The figure assumes the retiree is enrolled in Medicare Parts A, B, and D, and includes premiums, copays, and out-of-pocket costs for medical and prescription drugs, but excludes long-term care expenses.

Rising costs, lower confidence

This year’s estimate comes amid declining confidence in retirement readiness, with many Americans falling short in their planning. According to Fidelity’s recent research:

• One in five Americans has never factored health care needs into their retirement planning.
• 25% of Gen X adults say they’ve never considered these costs.
• 17% across all generations admit they’ve taken no action at all to prepare for health-related expenses in retirement.

“Year after year, so many Americans underestimate how much they’ll need to save to cover health care costs in retirement,” said Shams Talib, head of Fidelity Workplace Consulting. “With the right tools and guidance, pre-retirees and retirees alike can take greater control of their financial futures by beginning the planning process as soon as possible.”

Health savings accounts

Fidelity highlights Health Savings Accounts (HSAs) as powerful yet underused financial tools for managing future health costs. Offering a rare triple-tax advantage – pre-tax contributions, tax-free investment growth, and tax-free withdrawals for qualified medical expenses – HSAs are gaining popularity, but usage gaps remain.

According to the report:

• Only 23% of Americans contribute to an HSA to prepare for retirement health care.
• Just 30% of HSA users invest their assets, missing a key opportunity for growth.
• Among people aged 55 – 64, only 15% have an HSA, and more than half are unaware that HSAs can double as long-term retirement savings vehicles.

Baby boomers grew up at a time when most TV sets didn’t have remotes, you listened to music on vinyl records and if you wanted to watch a movie at home, you first went to Blockbuster. So it may not be that surprising that a new survey shows this generation has a little “digital fatigue.”

Insurity, a cloud-based software provider for property and casualty insurance carriers and intermediaries, has released its 2025 Digital Experience Index. The national survey found a disconnect between insurers’ digital transformation initiatives and consumer preferences, particularly among baby boomers and Gen X policyholders.

Despite increased investment across the insurance industry in automation and digital self-service platforms, many older customers remain unconvinced. According to the survey:

• 59% of baby boomers and 39% of Gen X respondents say they still prefer speaking to a person over navigating a fully digital process.
• Only 7% of boomers and 14% of Gen X believe a fully self-service model represents their ideal insurance experience.
• 28% of baby boomers admitted to avoiding filing a claim altogether due to a frustrating or overly complex digital process.

“These are not minor usability complaints but are blockers to basic insurance functions,” said Sylvester Mathis, chief revenue and insurance officer at Insurity. “When nearly a third of boomers are skipping claims altogether, it’s a sign that digital strategy cannot come at the expense of accessibility.”

The results may help explain the opposition the Social Security Administration received when it announced it intended to eliminate most telephone support for claim filing and routine service for retirement, survivor, disability/Medi‑Care, and SSI benefits.

The risk of a uniform digital strategy

As insurers accelerate digital transformation, aiming for streamlined operations and enhanced customer engagement, Insurity’s findings suggest that this strategy could backfire without inclusivity. The data paint a picture of a sizable customer segment that still values human interaction, especially during high-stress situations like claims processing.

“Insurers are often under pressure to modernize rapidly,” said Mathis. “But modernization must include empathy and choice. A hybrid model—offering both tech-driven ease and human guidance—might be the best path forward.”

The survey concludes that insurance companies should maintain accessible customer service channels, including phone and in-person support. The results suggest that companies regularly collect and act on user experience feedback from policyholders across all age brackets.

Congress has reintroduced the Credit for Caring Act, which would establish a nonrefundable federal tax credit of up to $5,000 per year for eligible working family caregivers. It covers caregiving expenses like home care aides, adult day care, home modifications, respite care, and transportation.

The bill, which has drawn bipartisan support, would meet what its sponsors say is a growing need. A new report from AARP and the National Alliance for Caregiving (NAC) shows the extent to which family members are employed in the workplace while providing care for someone at home. 

The report shows that family caregiving in the United States has reached historic levels, with 63 million Americans, nearly one-quarter of the adult population, providing unpaid care to loved ones in the past year. 

That’s a dramatic 20 million-person increase since 2015, highlighting a rapidly growing and largely unsupported population of caregivers.

According to the report – Caregiving in the U.S. 2025 – of the 63 million caregivers, 59 million were providing care for adults over 18, many without formal training or pay. AARP CEO Dr. Myechia Minter-Jordan called caregivers “a backbone of our health and long-term care systems,” noting that they often sacrifice their own well-being and financial security to provide complex care.

“These are ordinary people doing extraordinary work with little recognition,” said Jason Resendez, NAC’s CEO. “When 1 in 4 adults are providing complex care and over 13 million can’t prioritize their own health, we can’t keep treating caregiving as invisible labor.”

An alarming trend

The report outlines striking trends about the lives and struggles of America’s caregivers:

• Nearly 25% of caregivers provide over 40 hours of care weekly; a third have been doing so for five years or more.
• One in three caregivers is also raising children under 18. Among caregivers under 50, this jumps to 47%. Latino and Black communities report the highest dual-responsibility burdens.
• Nearly half of all caregivers experienced severe financial impacts, including debt, loss of savings, or food insecurity. The burden is most acute among young, low-income, Black, Latino, and LGBTQ+ caregivers.
• Six in 10 caregivers are employed. Among them, half report workplace disruptions. While more employers now offer caregiving benefits, salaried workers are far more likely to access them.

AARP and NAC are urging Congress to approve the measure. The organizations are also calling for expanded paid leave, improved access to respite care, and national recognition of caregivers’ vital role.

New data from Northwestern Mutual’s 2025 Planning & Progress Study reveals a contradiction: Americans have lowered the amount of money they think they need in retirement, but more than half now expect to outlive their savings.

The headline finding: Americans now believe they need $1.26 million to retire comfortably. While that’s $200,000 less than last year’s estimate of $1.46 million, the updated figure is nearly flat compared to 2022 and 2023 levels, suggesting Americans’ expectations are stabilizing after years of inflation-driven anxiety.

“Americans’ ‘magic number’ has come down – but it remains high, far beyond what many people have actually saved,” said John Roberts, chief field officer at Northwestern Mutual.

Despite the slightly lower target, 25% of Americans with retirement savings say they have just one year or less of income saved. The picture is especially concerning for Gen X, where over half (52%) have saved just three times their income or less, and 54% believe they won’t be financially ready for retirement.

Fear of outliving savings grows

The study shows growing financial anxiety around longevity:

• 51% of all U.S. adults think it’s likely they’ll outlive their savings.
• Only 16% consider that outcome “very unlikely.”
• 35% have taken no steps to plan for this possibility.

This sense of vulnerability is not evenly distributed. Older generations like boomers are slightly more confident, but Gen X and Millennials show heightened concern. Gen Z, interestingly, reports the highest confidence in being prepared, despite being farthest from retirement age.

Northwestern Mutual’s analysis underscores how timing impacts the journey to $1.26 million. For example:

• Starting at age 20: $330/month investment needed
• Starting at age 30: $695/month
• Starting at age 40: $1,547/month
• Starting at age 50: $3,958/month

These estimates assume a 7% return and consistent monthly investing. The clear message? Waiting comes at a steep cost.

Today’s grandmothers aren’t what popular Images might suggest. Gone are the days when the title of “Grandma” implied rocking chairs and early bird specials. 

Instead, women like Sharline Andersen are redefining the role. An energetic corporate events director from Fresno, California, Andersen is a grandmother of 12 and has no plans to slow down. “I don’t see retirement as anything close to my future,” she told the Wall Street Journal, which has peeled back the curtain on women who raised children while on the job and who are now practically raising their grandchildren.“I feel like I have a lot of energy left and a lot left to give.”

Andersen remembers the 1980s, when mothers with careers carried something of a stigma. Social critics warned they were dooming their families. Today, many of these women are still working and now providing both practical help and emotional validation to their own adult children as they juggle careers and parenthood.

From judgment to validation

“I’m grateful that my daughters have been able to see me in a career,” Andersen said. “And now they can see that you can be in your 60s, be a grandmother, and still be very active in their lives and have a strong, successful career.”

According to AARP, most Gen X grandmothers and nearly half of baby boomer grandmothers are still in the workforce. They’re not only helping raise their grandchildren but doing so while advancing their careers, often remotely. For many, it’s part mission, part necessity.

The Journal points to 64-year-old Carol O’Keefe, a practicing attorney and mother of four, who packed up and went to New York for two months – working remotely – while helping her son and daughter-in-law with their first child. 

“It’s as much or more about helping out your kids as it is about the grandbabies,” she told the newspaper.

But unlike today’s moms, these grandmothers had little institutional support when they were raising children. Paid parental leave was virtually nonexistent, and social attitudes were often harsh. 

News articles in the ’90s warned of the alleged dangers of “careerism” among mothers, with headlines questioning whether a woman’s career could damage her children.

According to the Journal, some companies are beginning to recognize the vital support these working grandmas provide to their children. Policies like “grandternity leave” are increasingly being talked about in the C-suite, and even adopted by some companies trying to support multigenerational caregiving. 

For millions of Americans, Social Security retirement benefits are a cornerstone of their financial future. But deciding when to start collecting those benefits isn’t always straightforward. 

The age at which retirees choose to file for Social Security can have a lasting impact on their monthly income, lifetime benefits, and financial flexibility in later years.

Retirees can begin claiming Social Security as early as age 62, but doing so comes at a cost. Claiming early results in a permanent reduction in monthly benefits—up to 30% less than if one waits until full retirement age (FRA), which recently rose to 67, depending on birth year. Conversely, delaying benefits beyond FRA increases payments by about 8% for each year of delay, up to age 70.

Health and longevity expectations

Life expectancy plays a crucial role in this decision. If retirees anticipate a longer lifespan – perhaps due to family history or personal health – it often makes sense to delay benefits to maximize the total payout. Those with shorter life expectancies may benefit from claiming earlier to receive benefits sooner, even if monthly checks are smaller.

Married couples face a more complex decision. A lower-earning spouse may want to file earlier while the higher-earning spouse delays benefits to maximize potential survivor benefits. Widows and widowers, as well as divorcees who were married for at least 10 years, may also qualify for spousal or survivor benefits, which should be factored into the timing strategy.

Additionally, retirees with dependent children under 18 may qualify for family benefits, making an earlier claim more attractive.

Working in retirement

Those planning to work past age 62 need to be cautious. Claiming Social Security before FRA while still earning income could lead to temporary benefit reductions. In 2025, retirees under FRA can earn up to $22,320 before benefits are reduced by $1 for every $2 earned over the limit. Once full retirement age is reached, the earnings limit no longer applies.

Social Security benefits are adjusted annually for inflation through cost-of-living adjustments (COLAs). By delaying a claim, retirees not only increase their base benefit but also the value of future COLAs, leading to larger compounded payments over time.

Deciding when to claim Social Security is a deeply personal decision that depends on a retiree’s health, lifestyle, family situation, and financial goals. Consulting a financial advisor and using Social Security calculators can help retirees assess different scenarios and determine the most strategic path forward.

Middle-class retirees in the United States are spending more than ever, with 2023 data from the Federal Reserve’s Consumer Expenditure Survey showing an average annual expenditure of $65,149 for those aged 65 to 74. 

That equates to approximately $5,429 per month, up from $5,070 the previous year — a 7% increase year-over-year.

This growing budget reflects the continued impact of inflation, especially in essential areas such as housing, healthcare, and transportation.

Housing remains the largest single expense, averaging $22,216 a year, roughly $1,851/month, accounting for 34% of all spending. Even for many older Americans who own their homes outright, ongoing costs like property taxes ($2,891), maintenance ($3,580), and utilities ($4,491) add up quickly.

Among shelter costs, owned dwellings averaged $8,693, while rented dwellings totaled $2,764 for the year.

Healthcare is a bigger expense than food

Healthcare is the second-largest spending category, with an average of $7,942/year or $662/month. This includes:

• Health insurance premiums: $5,495
• Medical services: $1,296
• Prescription and over-the-counter drugs: $815

In contrast, total food spending stood at $8,566/year or $714/month, divided nearly evenly between food at home ($5,432) and dining out ($3,134). Retirees spent more on nonalcoholic beverages than on fruits and vegetables, indicating shifts in dietary habits.

Transportation consumed an average of $10,899/year — $908/month — led by vehicle purchases and insurance:

• New and used vehicles: $4,379
• Gasoline and other fuels: $2,382
• Insurance and maintenance: Over $2,600

Entertainment, often considered a discretionary category, still accounted for $3,447/year, or $287/month, with pet expenses making up nearly a third of that.

Other expenses

• Apparel and services: $1,520/year
• Personal insurance: $4,286/year
• Cash contributions and gifts: $2,756/year
• Tobacco and alcohol: $951 combined

These figures underline the financial complexity of retirement, where even without a mortgage, retirees face rising costs across essential services. 

Social Security and Medicare, pillars of American retirement security, are veering toward insolvency, according to new projections. Combined estimates from the programs’ trustees and independent analysts reveal that both trust funds are on track to run out of reserves by late 2032, just over seven years from now. 

When that happens, federal law mandates automatic benefit cuts to align payouts with incoming revenues, spelling major financial hardship for many retirees.

According to the Committee for a Responsible Federal Budget, the situation has worsened due to recent legislation. The newly enacted One Big Beautiful Bill Act (OBBBA) — which includes tax cuts and a boosted senior standard deduction — has weakened the revenue stream for Social Security by reducing the amount of income subject to taxation. 

As a result, the group contends that benefit cuts at the point of insolvency are projected to be even deeper than those forecast in the latest official trustees report.

Sharp reductions in retirement income are expected

If the trust funds deplete as anticipated, Social Security retirement benefits will be slashed by approximately 24% starting in late 2032, according to the analysis. For a dual-earner couple retiring in early 2033, that translates into an $18,100 annual loss in benefits. 

A typical single-earner couple would lose about $13,600, while low-income dual-earner couples could see cuts of $11,000. The most affected — high-income couples — face reductions nearing $24,000 per year.

Though higher earners would lose more in absolute dollars, the cuts would represent a much larger percentage of income for lower-income couples. All figures are in nominal terms; when adjusted to 2025 dollars, the cuts would be about 15% smaller.

These cuts wouldn’t remain static, however. Because Social Security’s expenditures are outpacing its revenues, the gap will only grow larger. By 2099, benefit reductions could exceed 30%, compounding the crisis for future generations of retirees.

Medicare has its own problems

In addition to Social Security, the Medicare Hospital Insurance trust fund faces similar pressures. Without new funding sources or reforms, payments to healthcare providers will be reduced by 11%, potentially jeopardizing seniors’ access to medical care just as their physical needs increase.

The OBBBA’s immediate effect is a roughly a 1% increase in the required Social Security benefit cuts at insolvency. But the law’s long-term influence could be even more severe. 

If its tax relief measures, like the expanded senior deduction, are extended or made permanent, the shortfall will deepen, leading to steeper automatic cuts unless lawmakers intervene.

Imposter scams are particularly dangerous because the victim may believe they are dealing with their bank or a well-known organization. But the FBI has warned of an operation where a team of scammers impersonate multiple entities.

It’s known as the “Phantom Hacker” scam and it starts off as a tech support scheme.

According to the FBI, from January to June 2023, more than 19,000 tech support scam complaints were filed with the Internet Crime Complaint Center (IC3), amounting to over $542 million in reported losses. 

Nearly half of the victims were over 60 years old, and this demographic accounted for two-thirds of the financial losses. In the first half of 2023, losses from these scams surpassed 2022’s totals by 40%.

How it works

The scam unfolds in three coordinated phases, each escalating the victim’s fear and deepening their trust in the fraudsters.

Phase 1: Tech support imposter

It begins when a scammer poses as a customer support representative from a reputable tech company. The contact may come via a pop-up on a computer, a text, email, or a direct phone call. 

Victims are tricked into calling a fake help number and downloading software that gives the scammer remote access to their computer. Under the pretense of running a virus scan, the scammer convinces the victim that their device is compromised. They then urge the victim to open financial accounts so they can “check for unauthorized activity,” silently identifying which accounts are most lucrative to target.

Phase 2: Financial institution imposter

A new scammer, now impersonating a representative from the victim’s financial institution, contacts the victim. They claim that both the victim’s computer and accounts are under attack by foreign hackers. 

The victim is instructed to transfer their money into a “safe” third-party account—often said to be with the Federal Reserve or another government entity. In reality, the funds are directed to criminal-controlled overseas accounts. 

Victims may be urged to make repeated transfers over weeks or months while being told not to disclose the true reason to anyone.

Phase 3: U.S. Government imposter

To seal the deception, the victim may be contacted by someone claiming to represent the federal government. This scammer might send what appears to be an official-looking email or letterhead to add legitimacy. 

The pressure to “protect” their funds continues until the victim has emptied retirement, investment, or savings accounts into the scammer’s control.

How to protect yourself

The FBI emphasizes that government agencies will never request money transfers via cryptocurrency, wire services, or gift cards. To stay safe:

• Avoid clicking on pop-ups or unsolicited messages and emails.
• Never call the number provided in pop-ups or suspicious messages.
• Don’t download any software at the request of an unknown individual.
• Never allow someone remote access to your computer unless you initiated the support request.