These 5 Retirement Planning Mistakes Could Cost You

1. Starting Too Late

The earlier you begin saving for retirement, the more time your money has to grow. Waiting until your 40s or 50s to get serious often means contributing more aggressively to catch up. Life can get in the way—kids, housing, debt—but delaying can make retirement less comfortable or force you to work longer than planned.

Starting early doesn’t require perfection, just consistency. Even small, automatic contributions in your 20s or 30s can make a huge difference later, thanks to compound interest. If you’re behind, don’t panic. The key is creating a focused plan that prioritizes catch-up strategies like:

• Maximizing retirement account contributions
• Reducing unnecessary expenses
• Reassessing your target retirement age

2. Underestimating the Cost of Retirement

Many assume they’ll spend less in retirement, but that’s not always true. With more free time, retirees may actually spend more on travel, hobbies, or helping adult children. Add rising healthcare costs and inflation, and what once seemed like “enough” may not stretch as far as expected.

A common rule of thumb is that you’ll need about 80% of your pre-retirement income to maintain your lifestyle. But depending on your goals and health, you might need even more.

A realistic plan should account for:

• Daily living expenses (both fixed and discretionary)
• Healthcare premiums, long-term care, and out-of-pocket costs
• Inflation and longevity risk

Projecting these early—and adjusting as life evolves—helps ensure your savings align with the retirement you want.

3. Relying Too Much on One Type of Account

It’s common to funnel everything into a 401(k) or similar account, especially if it comes with employer matching. But putting all your savings into pre-tax accounts can limit flexibility in retirement. Every withdrawal is taxed as income, which can push you into higher tax brackets when you least expect it.

Instead, consider building tax diversification across:

• Pre-tax accounts (401(k), traditional IRA)
• Tax-free accounts (Roth IRA, Roth 401(k))
• Taxable brokerage accounts

With this mix, you can better control your taxable income in retirement and manage distributions more efficiently. It also gives you options if your income spikes or the market dips.

4. Lacking a Retirement Income Strategy

Saving is just the beginning—turning that reserve into income is where things often go wrong. Without a distribution plan, you risk withdrawing assets too quickly, triggering unnecessary taxes, or selling investments at a loss during down markets (known as sequence-of-returns risk).

A solid retirement income strategy addresses:

• When to draw from which accounts
• How to manage required minimum distributions (RMDs)
• The timing of Social Security
• How to create consistent, tax-efficient income year to year

This approach reduces guesswork and protects your nest egg from avoidable risks.

5. Overlooking the Value of a Financial Advisor

It’s tempting to manage your retirement plan solo, especially with so many tools and resources available online. But DIY planning has limits.

Most people aren’t ready to handle complex tax questions, investment risk, or estate planning alone. Even seemingly harmless missteps—like taking Social Security too early or missing an RMD—can have lasting consequences.

A trusted, qualified financial advisor can help ensure every piece of your plan works together. A professional adds perspective, experience, and structure. This allows you to be mindful of blind spots, reduce costly errors, and make confident decisions. It doesn’t mean handing over control of your finances, but rather gaining an expert sounding board to guide you through the big picture.

Avoiding key mistakes today can make a big difference in your retirement. If you want clarity, organization, and confidence moving forward, it may be time to get a second opinion from a fiduciary advisor who puts your interests first.

An advisor can:

• Run projections to see if you’re on track.
• Help build a diversified income strategy for retirement.
• Minimize taxes across your accounts.
• Bring clarity and structure to an already-complex process.

Whether you’re 10 years away or just starting to think seriously about retirement, the right advisor can help bring your full plan into focus.

How to Find the Right Advisor

To make it easier, we offer a free matching tool that connects you with a vetted fiduciary financial advisor based on your location and needs. It only takes a few minutes to get matched with a qualified professional who can help you build a smart retirement plan.