Most Americans Ages 18 to 65 Say Health-Care Inflation Could Upend Retirement, TIAA Survey Says

Your Social Security statement may show one amount, but Medicare can take its share before the money is deposited, leaving some retirees with less than they expected.

Americans are worried about what health care will cost them after they stop working, even years before the first bill arrives. TIAA’s Retirement in the Age of AI and GLP-1s survey found that 77% of respondents believe rising medical expenses could disrupt their retirement plans. The survey questioned 1,000 U.S. adults ages 18 to 65, including people who are still far from Medicare eligibility.

That concern becomes a monthly reality once Medicare begins. Imagine Carol, recently retired and drawing Social Security. Her benefit notice says $2,100 a month, but her first deposit is smaller because Medicare has already withheld its premium.

And that is only the start. Depending on income and coverage choices, Medicare can cost much more than the standard monthly premium, and other medical bills may arrive separately.

Medicare Takes Its Cut First

Medicare Part B helps cover doctor visits, outpatient services and medical equipment. The standard premium in 2026 is $202.90 a month, or $2,434.80 a year. For people already receiving Social Security, that amount is usually deducted directly from the monthly benefit.

That would leave Carol with $1,897.10 before any taxes are withheld, a monthly difference of $202.90. In other words, the amount shown on the benefit statement is not always the amount available to spend.

The pressure is noticeable. Medicare’s standard Part B premium rose $17.90 from 2025, while Social Security benefits got a 2.8% cost-of-living increase for 2026. For retirees, part of that raise can disappear into higher premiums before it ever reaches their bank accounts.

Income Surcharges, Drug Plans and Separate Bills

Higher earners face an even bigger Medicare bill. In 2026, a single filer with income above $109,000, or a married couple filing jointly with income above $218,000, enters the first income-related surcharge bracket. That increases the monthly Part B premium to $284.10. At the highest income level, the premium rises to $689.90.

Medicare generally relies on income from two years earlier when calculating these surcharges. That means earnings from before retirement can still affect what you pay now. If leaving work significantly lowered your income, you can ask Social Security to reduce the surcharge by filing Form SSA-44.

Not every Medicare cost is taken out of Social Security. These expenses are usually handled in different ways:

• Deducted from Social Security: The monthly Part B premium, including any income-related surcharge. Higher-income beneficiaries also pay a Part D surcharge ranging from $14.50 to $91 a month, usually deducted from Social Security or billed by Medicare.
• Paid to the drug plan: Part D premiums vary by plan. You can generally pay the insurer directly or arrange for the premium to be withheld from Social Security.
• Paid separately: Medigap premiums, which help cover certain out-of-pocket costs under Original Medicare.
• Paid when care is received: Original Medicare includes a $283 annual Part B deductible and a $1,736 Part A hospital deductible per benefit period. Coinsurance and copayments may also apply.

Retirees with limited income and savings may qualify for assistance. State-run Medicare Savings Programs can cover the Part B premium, while the Qualified Medicare Beneficiary program also helps with deductibles, coinsurance and copayments.

Some states use more generous eligibility rules than the federal minimum. If you qualify for premium help, that monthly charge may no longer come out of your Social Security check, leaving more money in your account.

A Large IRA Withdrawal Can Raise Costs Later

Medicare’s income formula includes taxable withdrawals from traditional IRAs and 401(k)s, taxable Roth conversions and realized capital gains.

For example, a single retiree who made a large IRA withdrawal to pay for a roof replacement could push modified adjusted gross income above $109,000. That might trigger a higher Medicare premium later, even if income has since returned to normal.

Spreading optional withdrawals across different tax years may help avoid crossing a surcharge threshold, but timing matters. A one-time large withdrawal is not, by itself, a reason for an income-related premium reduction. A qualifying life change such as retirement or reduced work hours may offer another path to relief.

Budget for the Deposit You Actually Receive

Your Social Security benefit may look larger on paper than what reaches your bank account. Review your benefit notice for Medicare deductions and use the net amount as the basis for your retirement budget.

Then plan for expenses that will not be automatically deducted. Prescription drug coverage, supplemental insurance and other out-of-pocket medical costs can add more strain to a fixed income.

The worries reflected in TIAA’s survey do not disappear once retirement starts. But understanding what Medicare will take, what you will owe separately and whether you qualify for help can make those costs easier to manage. Check the figures each fall when Medicare updates its premiums.