5 Retirement Risks Most Americans Overlook

Five themes — longevity, Social Security, taxes and spending risks — could reshape how households plan for retirement, according to the 2026 J.P. Morgan Guide to Retirement.

Why this matters now

Americans face longer lifespans, uncertain Social Security reform and volatile markets — all while retirement balances have reached peak levels for many pre-retirees. The 2026 J.P. Morgan Guide to Retirement argues that traditional retirement rules of thumb may no longer be enough.

Instead, the firm highlights five themes it says should shape household retirement decisions today: longevity math, small-business coverage gaps, Social Security realities, tax-efficient withdrawals and what it calls the “silent risks” to retirement spending.

Here’s what households need to know.

1. Longevity is the starting point

If both members of a healthy 65-year-old couple retire today, there is a 74% chance at least one will live to age 90 and a 44% chance at least one will reach 95, according to the guide.

Planning to average life expectancy is not sufficient, Sharon Carson said. Planning to age 100 may be prudent for many.

Replacement rates also vary widely. Lower-income households may need to replace 90% or more of pre-retirement income, while higher earners may need closer to 55%.

The guide favors dollar-based “retirement checkpoints” over simple salary multiples to give savers more tangible retirement savings targets.

2. Small businesses remain underserved

Only 55% of employers with 50 or fewer workers offer a retirement plan.

That leaves millions without workplace retirement savings access. The SECURE 2.0 Act provides tax credits — not deductions — to offset startup costs, potentially lowering barriers for small employers to offer retirement plans.

3. Social Security myths persist

While projections show trust fund depletion around 2033–2034, payroll taxes would still fund about 72% of scheduled benefits even in a depletion scenario.

Social Security claiming decisions matter. Taking benefits at age 62 can reduce payments by roughly 30%. Delaying benefits can significantly increase lifetime income, particularly for the higher earner in a couple.

Importantly, the higher earner’s delayed benefit can permanently increase the surviving spouse’s income.

4. Taxes can reshape retirement outcomes

Retirees face “cliff” thresholds that can unexpectedly increase taxes.

Up to 85% of Social Security benefits can become taxable.

Medicare IRMAA surcharges can sharply raise Part B and Part D premiums.

Having assets in taxable, tax-deferred and Roth accounts allows retirees to smooth income and potentially avoid triggering higher tax brackets or Medicare surcharges.

5. The silent risk: spending behavior

Market risk is well known. Spending volatility is less discussed.

J.P. Morgan data shows 60% of retirees experience 20% or greater year-over-year spending swings early in retirement.

The traditional 4% withdrawal rule assumes steady inflation-adjusted withdrawals. Real-life spending rarely behaves that way.

The guide also finds that households with 60% to 80% of wealth in guaranteed income sources spend 44% more than similarly wealthy households with less guaranteed income — suggesting psychological confidence plays a major role in retirement spending behavior.

What this means for you

Don’t plan to the average life expectancy. Plan for longevity risk.

Understand that Social Security likely won’t disappear — but timing decisions matter.

Build tax diversification before retirement.

Model spending shocks, not just smooth projections.

Consider how guaranteed income affects your confidence to spend.

Key takeaways

Longevity probabilities — not averages — should anchor your retirement plan.

Delaying Social Security can materially improve survivor security.

Tax cliffs in retirement are real and require proactive planning.

Spending is volatile — plan for swings, not smooth withdrawals.

Confidence, not just math, shapes retirement outcomes.