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Top 10 Retirement Mistakes

Top Threats to Your Retirement


This week I have created my own list of top retirement mistakes.  If you Google Top Retirement Mistakes  you get about 40 million results.  I put together my own Top 10 from various resources throughout those 40 million results.  Some of the lists were maybe the top 3 retirement mistakes all the way up to 40.  I guess you could say anything becomes a risk at some point.  

1. No Financial Planning 

Most workers have not attempted to determine how much money they will need in retirement as a result around sixty percent of workers have saved less than $25,000  and about a third believe they'll need just $250,000 for a comfortable retirement.  Successful retirement planning starts with taking responsibility for your future.  For most people, $250,000 is pretty low unless you want to continue working in retirement.

2. Retirement Longevity 

In the first generation of post-World War II, retirees lived on average about five years into retirement. Lifespans now are longer and many people can expect to live twenty to thirty years in retirement. Many are underestimating this fact and it leads them to spend too much in the early years or to put their put money into investments that are too conservative to last.  Obviously, this increases the risk of running out of money later in retirement.  Many financial planners are now arguing that married couples should plan for at least one spouse to live past the age of ninety or even a hundred.  In this case, it's better to plan for the best (longer life) and hope for it! 

3. Do-It-Yourself Investing 

Do-it-yourself investors often react emotionally to their  investment performance.  They are overly optimistic when they're up and panic when they drop.  This poor behavior can substantially impair your returns and put a dent in your savings plan.  Some people sold everything in 2008-2009 and still haven't gotten back in the market.  Ouch!  Meanwhile, the S&P 500 has quadrupled from its 2009 low.  I've talked a bit about this before in my Is It Time To Delegate post.  

4. Medical Bills 

Medical bills are the leading cause of bankruptcy in the United States.  You don't want to cover your medical bills by digging into your savings.  You need to protect yourself with disability insurance which can replace a portion of your income if you can't work.

5. Grown Children Moving Back Home

One of the biggest risks to retirement is your grown children.  It's obviously best to teach your children self-sufficiency in the first place so they can avoid financial crisis that leads to them moving back with you.  Once the crisis usually happens, there's usually no easy way out.  I know this may sound  easier said than done, but don't let your adult children move back in.  Instead, help them set a budget or get them a financial planner.

6. Caring For Elderly Parents 

Yes, it goes the other way too.  If your parents need financial support, the National Council on Aging benefitscheckup.org website is good place to find assistant programs that can take some of the burden off of you.  Also, Alzheimer's and Parkinson's can really mess up a retirement plan.  Using a long-term care to protect retirement savings by covering expenses for you or your spouse, whom might need assistance, is always a great option.

7. Debt 

At some point or another usually every American has some debt.   If you have debt,  you are sacrificing your pay, in order to pay it off in the future.  So get out of debt as soon as you can and stay out!  Invest as you soon as you're a debt-free and you have an emergency fund in place.

8. Retirement Scams

I've seen people that are quite intelligent and worldly throughout their lives, become susceptible to these scams in their later years.  Keep an eye out for these scams. Anxiety about not having enough money for retirement is fertile ground for scammers.  Be aware of any scheme that promise high investment returns or guarantees and anything that  promises you could retire early.  Be skeptical of any free dinners or or other offerings where the main thing they're selling is fear. 

9. Investment Returns Are Not Likely To Be As Good As The Past 10 Years 

Since the markets bottomed in  2009, we've had one of the best periods ever for investment returns. Propelled primarily by aggressive monetary policy and low inflation, returns in both stocks bonds have been well above historical averages.  The "easy money"  seems to have found its way  into equity markets giving stocks one of their best periods ever.  At this point, you probably shouldn't depend on achieving returns  we've seen the past  ten years.

10. Last But Not Least, Stay Active Mentally & Physically 

Maintaining your mental and physical health is always important but especially when you retire. Staying  active will help keep you  sharper, happier and more independent.  Some of you have been hearing this from me me for quite some time.  

Bottom Line 

Although you cannot eliminate all potential threats to your retirement savings, you can reduce them.  

If you have concerns about your retirement planning, schedule a call today or send us a message at


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