12 Retirement Mistakes That Sabotage Your Future
1. Ignoring the Non-Financial Side of Retirement
Retirement isn’t just about money—it’s about purpose, lifestyle, and relationships. Many retirees fail to plan what they’ll actually do in retirement, leading to boredom, dissatisfaction, or even depression. You need to design your ideal lifestyle, not just your financial strategy.
2. Falling for Scams and Elder Fraud
In 2022, 88,000 Americans aged 60+ lost over $3.1 billion to fraud—an 84% increase from 2021. Fraud targeting older adults is on the rise, and retirees must be vigilant. Secure your finances with identity protection, and involve a trusted advisor or family member in big decisions.
3. Assuming You’ll Work Past 65
While 55% of people say they’ll work beyond 65, only 19% actually do. Whether due to health, caregiving, or layoffs, early retirement often isn’t a choice. Have a plan that doesn’t depend on working longer than necessary.
4. Overspending on the “Dream Life”
Many retirees rush into buying dream homes, RVs, or boats without thinking through the long-term financial and lifestyle implications. Buyer’s remorse is common. Visit multiple times, crunch the numbers, and think beyond the fantasy.
5. Underestimating Inflation
Inflation silently erodes your purchasing power. A coffee that cost $0.25 in 1970 now costs over $3. Investing in assets that outpace inflation—like stocks—is critical to preserving wealth.
6. Failing to Prepare for Market Volatility
The sequence of returns matters. A downturn early in retirement can drain your portfolio fast. Diversify your investments and keep enough cash reserves to avoid selling during a market dip.
7. Mismanaging Required Minimum Distributions (RMDs)
RMD rules vary by age (72, 73, or 75) and account type. Mistakes can lead to hefty tax penalties. Start planning for RMDs early, and consider strategies like Roth conversions to manage tax brackets.
8. Poor Social Security Timing
Claiming Social Security at 62 locks in lower benefits permanently. Waiting until 70 can result in up to 77% more monthly income. Weigh your health, life expectancy, and spousal benefits before making a decision.
9. Not Planning for the Medicare Gap
Retiring before age 65? You won’t be eligible for Medicare, and private insurance can be expensive. Plan for this gap in your retirement budget.
10. Ignoring Long-Term Care Costs
A private nursing home room can cost over $10,000/month. These expenses can wipe out retirement savings and leave surviving spouses financially vulnerable. If you’re not buying insurance, you need enough capital to self-insure.
11. Neglecting Estate Planning
Over half of Americans die without a will. Without proper estate documents, your assets could be tied up in probate or distributed by state law. Create a will, trust, power of attorney, and healthcare directive.
12. Not Communicating With Your Partner
Retirement can strain relationships. Whether it’s spending too much time together or differing goals, communication is key. Talk with your spouse about retirement expectations, finances, and how you’ll spend your days.
Intended for educational purposes only. Opinions expressed are not intended as investment advice or to predict future performance. Past performance does not guarantee future results. Neither the information presented, nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Consult your financial professional before making any investment decisions. Opinions expressed are subject to change without notice.
IMPORTANT DISCLOSURES:
• Investment Advisory and Financial Planning Services are offered through Pure Financial Advisors, LLC. A Registered Investment Advisor.
• Pure Financial Advisors, LLC. does not offer tax or legal advice. Consult with a tax advisor or attorney regarding specific situations.
• Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
• Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
• All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.
• Intended for educational purposes only and are not intended as individualized advice or a guarantee that you will achieve a desired result. Before implementing any strategies discussed you should consult your tax and financial advisors.
