The Big Retirement Mistake Most People Don’t See Coming

When most people think about retirement, they picture freedom, travel, grandkids, and finally having control of their time. But after working with retirees for decades, I’ve learned that the happiest retirees have one thing in common: they figured out how to turn their savings into a reliable, sustainable paycheck. And the people who feel stressed, uncertain, or overwhelmed often made the same mistake—one that usually goes unnoticed until it’s too late.

The biggest retirement mistake most people make is underestimating how long they’re going to live. And that single decision affects everything how much income you can take, how you invest, how you handle Social Security, how you manage taxes, and whether your money will actually last.

The Real Risk Isn’t Dying Early. It’s Living Longer Than You Expect

When I tell people the biggest risk in retirement is longevity, they raise an eyebrow. But hear me out.

At age 65, the median man will live another 18 years, and the median woman another 21 years. But here’s the part most people miss: half will live even longer many well into their 80s and even early 90s. And most people underestimate their lifespan by at least five years.

If you plan for a 20-year retirement and it ends up lasting 30 or 35 years, you’ve already created a 10- to 15-year income shortage. That’s where people get into trouble. A retirement that’s just five years longer increases the probability of running out of money by 41%.

This is why planning for income not just savings is essential.

Why Withdrawal Strategy Matters More Than Investment Strategy

It’s common to spend decades focused on building a portfolio, watching the market, and saving as aggressively as possible. But once you retire, the game changes entirely. Now it’s about how you pull money out without exposing yourself to excessive risk.

A 4% withdrawal rate is often mentioned as a safe rule of thumb. But depending on your retirement length, your spending, and market performance, that number may be too low or dangerously too high.

Recent research shows a 4.7% rate is sustainable for many retirees, but if you’re planning for a 40-year retirement, you may need to be closer to 3.3%.

And that’s where the mistake shows up: most people choose a withdrawal strategy without considering how long they may live, whether their income will change, or how market downturns can impact their cash flow.

Volatile Markets Can Destroy a Retirement If You Withdraw Incorrectly

When markets fall early in retirement, the timing can be disastrous. If you’re withdrawing money during a downturn, you’re selling assets at a loss and those losses compound over time.

That’s why I always tell clients: Social Security is your built-in stabilizer. It’s guaranteed income. It doesn’t go down when markets go down. It doesn’t care about inflation, elections, or recessions. But your portfolio does.

The retirees who feel most secure aren’t the ones with the biggest portfolios they’re the ones with the most predictable income.

Why Liquidity Matters More Than People Think

One of the biggest shocks in retirement is discovering that Social Security can’t help you with emergencies. You can’t get a lump sum if the car breaks down, the roof leaks, or you have a major medical bill.

That’s why having accessible cash whether in a high-yield savings account or a separate reserve can be the difference between staying calm and dipping into investments at the worst possible time.

Without liquidity, retirees often end up selling investments in down markets, which accelerates portfolio depletion.

Running Out of Money Isn’t Just About Savings, It’s About Strategy

I’ve watched too many people enter retirement with confidence only to panic once they see how quickly withdrawals add up. Then I’ve seen others with less savings thrive because they planned properly.

The difference isn’t income level or wealth. It’s strategy.

You need a plan that accounts for:

• How long your money needs to last
• How much income you need during each stage of retirement
• How to adjust withdrawals based on market performance
• How Social Security integrates with portfolio withdrawals
• How liquidity cushions unexpected expenses
• How taxes affect your net retirement income

Retirement isn’t about having the biggest nest egg it’s about creating a reliable income plan that can adjust as your life changes.

My Final Thought: Planning Is What Creates Freedom

If there’s one message I want to get across, it’s this: retirement isn’t just about numbers. It’s about control, peace of mind, and giving yourself the freedom to enjoy the next chapter of your life.

When you plan for longevity, build a flexible income strategy, and understand how your withdrawals interact with Social Security and taxes, you unlock confidence that can carry you through your 70s, 80s, and even 90s.

And that’s the true goal never running out of money and never running out of options.

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.