Jake and Maggie did everything right. They started saving early, paid off their home before retirement, avoided debt, and budgeted carefully for a safe and comfortable retirement. For several years, everything went smoothly. Then a routine doctor’s visit led to a diagnosis. A few months later, Maggie needed in-home care. Then assisted living. Then, they had to make some hard choices.

For them, money didn’t disappear overnight. It drained steadily through medical bills, rising living costs, and investment withdrawals taken at the wrong time. Decisions that once felt doable became pressing.

Their adult children tried to step in but were confused by outdated documents, unanticipated medical bills, and unclear needs. By the time the family recognized they had financial problems, options were limited and expenses were mounting.

Nothing sudden and catastrophic happened, and that was the problem. Retirement didn’t fail because of recklessness or bad luck. It failed because the plan addressed individual pieces rather than the whole.

Financial security in retirement doesn’t come crashing down with a bang; it collapses gradually — one medical bill, one market downturn, one year of inflation at a time. Most retirees don’t lose sleep over stock tips or interest rates. They lie awake wondering if their money will last, if a health crisis will wipe them out, or if inflation will quietly destroy the quality of life they worked decades creating. 

These aren’t fringe concerns. They are the biggest threats to otherwise well-intended retirement plans. As with most things in life, what happens isn’t what matters most. It’s what people do about it. Constructive actions today can dramatically change outcomes tomorrow.

The majority of seniors worry about medical costs and long-term care expenses, according to the National Council on Aging. Medicare, combined with the right supplement policy, can help manage routine medical costs. However, approximately 70% of people turning 65 today will require some form of long-term care services, which are not typically covered by Medicare, the San Francisco Chronicle reports.

The financial exposure is significant. With average nursing home costs running around $305 a day, or roughly $110,000 a year, according to a report by A Place For Mom, even a short stay can place a severe strain on retirement assets. Planning ahead to manage these potential costs may be one of the most effective ways to reduce financial stress and preserve long-term security.

When insurance is not available, long-term care is typically funded through self-insurance. That may include drawing from brokerage assets, earmarking specific investments, tapping home equity, or formally using a reverse mortgage. When assets are exhausted, Medicaid becomes the backstop — often at the cost of choice and control. 

Inflation represents a quieter, but equally destructive threat. Nearly 90% of retirees worry about inflation and the rising cost of living, according to the Schroders 2025 US Retirement Survey. While the price of food, gas, and energy strain fixed incomes, those pressures compound over time. Combined with unexpected repairs and emergencies, inflation steadily erodes purchasing power and shrinks discretionary income.

Most retirees who planned responsibly accounted for inflation, at least in theory. What they couldn’t anticipate was the sharp spike in recent years, and the reality that retirees experience inflation more acutely than the general population.

Budgeting alone will not solve the problem. Finances to cover the cost of living over a long retirement require asset growth. To generate that growth, an investor must accept a measured and manageable level of risk.

And that leads to two additional concerns: investment returns and financial volatility. Every investment decision carries risk. To outpace inflation, an investor must be willing to assume some level of risk. Too much risk reflects desperation and poor planning. Too little risk leads to a slow, predictable financial decline. When managed correctly, risk is compensated with earnings, which generate the premium that fuels long-term asset growth.

Finally, seniors should recognize that incomplete or outdated estate plans are a failure of neglect. Most people don’t see the problem until it’s too late. Named beneficiaries may be outdated, powers of attorney may be invalid, assets may not have been added to the trust, and families without good communication often end up in court.  

Most retirees think about death but fail to plan for incapacity. An estate plan that isn’t current and coordinated doesn’t preserve a legacy; it creates confusion, delay, and unnecessary costs.

Documents may exist, but they may no longer reflect current circumstances, account structures, family dynamics, or financial realities. Failures in estate planning are rarely about intent. They are about neglect. Without regular updates, even well-drafted plans unravel. Taxes go unmanaged, long-term care planning is ignored, and assets intended to support a family are consumed by avoidable costs and delays. When that happens, decisions shift from the family to the courts, and outcomes are dictated by statute rather than personal wishes.

An effective estate plan is not a document — it’s an action plan. It's a plan that must complement income strategies, investment decisions, health care planning, and changing family circumstances. When it does, it protects assets, preserves dignity, and ensures that what took a lifetime to build isn’t dismantled by some unintended consequence.

Most financial problems for seniors stem from a lack of planning, not a lack of money. The danger isn’t doing nothing — it’s assuming yesterday’s plan will still work tomorrow. Retirement plans should be stress-tested against inflation, market downturns, healthcare needs, and the possibility of incapacity before those events occur. The best time to act is before decisions become urgent and options narrow.

For most, a productive next step is simply a comprehensive review: confirming income sources, reassessing investment risk, evaluating long-term care exposure, and ensuring estate documents still reflect current wishes and realities. Even small adjustments made now can make a meaningful difference later.

Kevin Spafford is a certified financial planner and partner adviser with Allworth Financial in Spokane. He is available at the office: (509) 624-5929, by cell: (530) 966-5560, or by email: [email protected].