If you asked me which part of retirement planning people underestimate the most, I wouldn’t hesitate.
It’s healthcare.
Not because people don’t know healthcare is expensive. Everyone knows that. They underestimate it because they think of it as one line item — a premium here, a deductible there — when in reality, a single unplanned health event is the first domino in a chain that can run through your entire financial life.
We talk about this constantly with our families, because once you see the chain, you can’t unsee it.
How One Event Becomes Five Problems
Here is the mistake people make. They budget for healthcare the way they budget for groceries — a predictable monthly number. Then something happens. A surgery. A diagnosis. A parent or spouse who suddenly needs care.
Now you need extra money, beyond what your plan was built to generate. So you pull it from your investments — and just like that, the health event has become an investment problem. Maybe you’re selling in a down market. Maybe you’re selling the exact positions your plan was counting on for the next decade.
And remember, every dollar you pull from a retirement account has a tax consequence. To net the money you actually need, you often have to withdraw quite a bit more — which can push you into a higher bracket, raise your Medicare premiums, and quietly tax your Social Security. Now it’s a tax problem too.
Which ripples straight into your income. The withdrawal strategy, the sequencing, the “how much can we safely spend” number — all of it built on assumptions that just changed.
One event. A ripple that becomes a domino effect. Health, investments, taxes, income — falling in order.
Why We Refuse to Treat It as a Side Topic
This is exactly why healthcare is one of the five pillars of the Paramount Pathway™, standing right alongside income, investments, taxes, and estate planning. Not an afterthought. Not a line item. A pillar.
Because the plans that break in retirement almost never break at the point of impact. They break two or three dominoes down the line, in places nobody was watching, months after the original event. The families who come through these seasons intact aren’t the ones who got lucky with their health. They’re the ones whose plan already knew what to do.
Planned For, Not Reacted To
So what does it look like to actually plan for this?
It means the healthcare conversation happens up front, while everyone is healthy — Medicare elections, supplemental coverage, and an honest look at long-term care, not a pamphlet and a shrug. It means reserves positioned so an unexpected medical bill has a designated source, instead of forcing a fire sale in your portfolio. It means the tax plan already accounts for where an emergency withdrawal would come from, in what order, at the lowest cost. And it means the income plan is pressure-tested against exactly this scenario before it ever happens.
When that structure is in place, a health event is still hard. We would never pretend otherwise. But it stays a health event. It doesn’t get to become an investment crisis, a tax problem, and an income emergency all at once.
Stop the Chain Before It Starts
You can’t schedule your health. None of us can. What you can do is decide, right now, whether the first domino will find anything to knock over.
That’s the work we do with our families. And if healthcare is the part of your retirement plan you’ve been quietly hoping works itself out, let’s have that conversation while it’s still just a conversation.
JP Johnson is the Founder and President of Paramount Wealth Group, an independent wealth firm based in Frisco, TX, serving families across the DFW metroplex.
Paramount Wealth Group is an independent financial services firm. Insurance services provided by Paramount Wealth Group, LLC. Investment advisory services offered through Triad Wealth Partners, an SEC registered investment advisor. Insurance products and services are not offered through Triad Wealth Partners. Neither firm offers tax or legal advice. This article is informational only and is not a solicitation or recommendation. Investments involve risk including possible loss of principal.
