Northwestern Mutual Study Reveals Five Key Financial Blind Spots for Americans

Northwestern Mutual's 2025 Planning & Progress Study identifies five key financial blind spots affecting many Americans, highlighting challenges in retirement preparedness, debt management, tax planning, long-term care funding, and estate planning. Americans estimate needing an average of $1.26 million for a comfortable retirement, yet many face a significant savings gap, which could impact future financial security and life goals. Effective financial planning involves assessing current assets and debts, setting realistic retirement goals, and collaborating with financial advisors to close this gap. Debt remains a major issue, with 70% of Americans carrying personal debt averaging $21,500, primarily from credit cards. Although reducing debt is crucial, maintaining consistent savings is equally important to cover emergencies and support wealth accumulation. Strategies like automating savings contributions and prioritizing high-interest debts can help balance debt reduction and asset growth. Tax literacy related to retirement planning is limited, with nearly half of Americans not integrating tax impacts into their strategies. Utilizing tax-advantaged accounts like 401(k)s and IRAs and diversifying tax treatments of retirement assets can improve financial flexibility and tax efficiency during retirement. Long-term care planning is another area of concern, as 61% anticipate needing such care but less than half have made financial preparations. With preferences leaning towards in-home care costing over $100,000 annually, early cost assessment and exploring various funding options with advisors are recommended to mitigate future financial strain. Estate planning gaps persist, with 61% of Americans lacking a will. This deficit spans all age groups but is most pronounced among younger generations. Establishing fundamental documents such as wills, durable power of attorney, and healthcare directives, along with updating beneficiary designations, is essential to ensure wishes are fulfilled and minimize complications for heirs. This study underscores the importance of comprehensive, personalized financial planning incorporating savings, debt management, tax strategy, long-term care funding, and estate planning. Financial advisors play a critical role in identifying individual risk areas and crafting effective, tailored plans. Addressing these blind spots in 2026 can enhance financial resilience and support sustained wealth growth for Americans at all life stages.