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Retirement Blind Spots

Wealthy Americans often assume the transition to retirement will be simple. With their financial affairs in order, the biggest question is how to use all the free time they’ll have when they leave the working world behind.

Despite diligently saving and accumulating wealth, some wealthy people can still overlook certain aspects of retirement. We dive deeper into some of these retirement blind spots to help you avoid these often-neglected areas.


Underestimating Life Expectancy

In the U.S., the average 65-year-old male can expect to live another 17 years, while the average 65-year-old female jumps up to 19.7 years.1

Of course, these are averages, which means that at least half the population can expect to live longer. According to the Stanford Center on Longevity, if a 65-year-old man and woman are married, there’s a 50/50 chance at least one will survive to age 92.2 This increasing longevity means that retirement funds must last 30 years or more — a duration that many prospective retirees often underestimate.

Two things to consider when planning for longevity are:

  • Duration of investment horizon. With the potential of living longer, maintain an investment strategy that accounts for a longer horizon. A financial advisor could help you understand your risk tolerance and design a portfolio that can help you weather market volatility over the long term.
  • Sustainability of withdrawals. Your retirement income will likely come from a mix of Social Security benefits, retirement account funds and taxable investment accounts. Work with a financial advisor to plan your withdrawal strategy and regularly review withdrawal rates to ensure your retirement portfolio is not depleted prematurely.

Underestimating Healthcare Costs in Retirement

Healthcare is one of the most underestimated costs in retirement.

According to the Employee Benefits Research Institute, a couple with high prescription drug costs may need as much as $383,000 to cover their healthcare costs in retirement.3

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According to the Stanford Center on Longevity, if a 65-year-old man and woman are married, there’s a 50/50 chance at least one will survive to age 92.2

This figure doesn’t include long-term care, which can add significantly to out-of-pocket expenses.

When planning for future healthcare costs, consider:

  • Long-term care insurance. Long-term care insurance can help preserve your retirement nest egg and give you more options when it comes to your long-term care needs. Look into your long-term care insurance options early to find the right coverage.
  • Health Savings Accounts (HSAs). If you’re eligible to contribute to a health savings account, it’s a great way to reduce your tax burden today while saving for your healthcare needs in retirement. Maximize HSA contributions during your working years to benefit from tax-free withdrawals for medical expenses in retirement.

Failing To Plan For Market Downturns and Inflation

Market downturns and rising inflation can make retirees feel like they’re being squeezed from both ends, adding an extra layer of uncertainty to their finances.

Selling investments at depressed prices during a market downturn can undermine your ability to participate in later market recoveries. Inflation drives up the cost of everything, including clothing, gas, groceries, cars, appliances and housing. These factors can quickly erode the staying power of your retirement savings.

When planning for market downturns and inflation, consider:

Thorough retirement planning is about more than just saving money — it involves taking a holistic approach to preparing for a long and active life and safeguarding against economic uncertainty. Discuss potential retirement challenges with your financial advisor, who may help your wealth, well-being and legacy.

When you’re ready to take a comprehensive and proactive approach to retirement planning that will equip you to navigate these blind spots, Synovus is here to help.

Important disclosure information

Asset allocation and diversifications do not ensure against loss. This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.

  1. OECD.org, “Life Expectancy at 65,” accessed April 13, 2024. Back
  2. Steve Vernon, FSA, “Understanding Longevity,” published 2017, accessed April 13, 2024. Back
  3. Jake Spiegel and Paul Fronstin, “Projected Savings Medicare Beneficiaries Need for Health Expenses Remained High in 2022,” published February 9, 2023, accessed April 13, 2024. Back