Avoiding Retirement Surprises Most People Miss

Retirement Isn’t a Set-It-and-Forget-It Plan

You’ve worked hard, saved diligently, and maybe even built a retirement income plan. But even well-prepared retirees can be blindsided by unexpected financial challenges.

Retirement is full of moving parts—some predictable, others not. And while market fluctuations and inflation get the headlines, many retirees are caught off guard by less obvious threats: tax traps, healthcare costs, longevity risk, and unrealistic spending expectations.

If you want peace of mind in retirement, it’s essential to anticipate what could go wrong and take steps to protect yourself now.

1. Underestimating Healthcare Costs

Even with Medicare, out-of-pocket healthcare expenses in retirement can be steep. According to Fidelity’s 2025 projections, a 65-year-old couple retiring today can expect to spend around $351,000 on healthcare during retirement.

What You Can Do:

• Consider a Medicare Supplement (Medigap) or Medicare Advantage plan to help manage costs
• Look into annuities with LTC riders or hybrid long-term care policies to prepare for future care needs
• Use Health Savings Account (HSA) funds (if available) tax-free for qualified expenses

2. Thinking Taxes Go Down in Retirement

Many retirees assume they’ll be in a lower tax bracket. But that’s not always the case—especially if you have required minimum distributions (RMDs) from traditional IRAs or 401(k)s.

RMDs can push you into a higher tax bracket, make your Social Security benefits taxable, and even trigger IRMAA surcharges on Medicare premiums.

Smart Moves:

• Use Roth conversions strategically before RMD age (now 73 as of 2025)
• Consider Qualified Charitable Distributions (QCDs) at age 70½ to lower your taxable income
• Diversify your income sources to include tax-free and tax-deferred options

3. Inflation Erodes More Than You Think

Even moderate inflation quietly chips away at purchasing power. If inflation averages 3%, your income would need to double in 24 years just to maintain the same lifestyle.

Protect Yourself:

• Use annuities with inflation-adjusted income riders
• Keep a portion of your portfolio in assets that can outpace inflation
• Build a retirement spending plan that anticipates rising costs

4. Retiring with Consumer Debt

Entering retirement with credit card balances, car loans, or even mortgages can create unnecessary stress. Your income may be fixed, but your payments aren’t.

Strategy:

• Pay down high-interest debt before you retire
• Refinance or consolidate to lower rates if you’re near retirement
• Build an emergency fund so you’re not forced into debt in retirement

5. Not Planning for Longevity

One of the biggest risks in retirement is outliving your money. Thanks to medical advancements, many retirees will live well into their 90s.

If you plan for 20 years but live 30, what happens?

Longevity Planning Tools:

 

Final Thoughts

Retirement surprises can be costly—but most are avoidable with smart planning. Don’t just focus on growing assets. Focus on protecting income, managing risk, and adapting to change over time.

True retirement readiness means thinking ahead and preparing for the unexpected—because confidence comes from having a plan, even when life throws you a curveball.

Written by Brent Meyer, founder of SafeMoney.com. With more than 20 years of hands-on experience in annuities and retirement planning, Brent is committed to helping Americans make informed, confident financial decisions.

Disclaimer: This article offers general retirement planning tips and is not personal financial advice. Consult a licensed professional before making any decisions. Need a Medicare Specialist near you?

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