Doug Hatcher, CPA, CFP, and Wealth Department Practice Leader at REDW is well-versed in the retirement mistakes that are most important to avoid. Planning for retirement can feel like preparing for a long journey. While many expect the ride to be smooth, common missteps can turn a comfortable trip into a stressful one.
The choices made years before retirement shape how those years look, but also how they feel. Unexpected expenses, missed savings goals, or overlooked details often catch people off guard. Retirement should reward years of effort, but avoidable mistakes can chip away at that reward.
By understanding the most common missteps in advance, individuals can take action now to protect what matters later. Awareness brings confidence, and that confidence can prove just as important as the savings itself.
Knowing where pitfalls often appear and how they can quietly erode a well-laid plan gives everyone a better chance. By addressing these mistakes before they turn into regrets, those planning for retirement can focus on security, comfort, and peace of mind.
Common Money Mistakes to Avoid When Planning for Retirement
Many people wait too long to start saving for retirement. In the early years of work, retirement seems far away, and it is easy to think there is plenty of time. Yet the effects of compound interest reward those who begin early. Even small amounts put away in the first years can multiply over time, bringing significant rewards. Waiting cuts down growth and leaves less room to recover from setbacks.
Underestimating future spending is equally impactful on retirement savings. Many think they will need much less money, assuming living costs will shrink or that they will stop spending on work-related items. In practice, new hobbies, travel, family support, and rising daily expenses often fill the gap. Utilities, groceries, and personal care do not suddenly vanish. A plan based on false assumptions creates real shortfalls.
Inflation is another silent threat. Long-term plans that fail to account for rising prices can fall short. The buying power of money shrinks over time. Without annual savings increases or investment growth, a fixed target set years earlier may no longer cover the same needs.
Some also take money from retirement accounts too soon. Early withdrawals mean less time for savings to grow, and they often come with penalties or higher taxes. Tapping savings for short-term needs, or to cover emergencies, carves away a nest egg faster than most realize.
“Putting off savings, underestimating costs, ignoring inflation, or reaching into investments early all create gaps that grow over time,” says Doug Hatcher. “Subtle errors today cause stress tomorrow. By planning thoughtfully and learning from common mistakes, each person can steer toward a more stable future.”
Overlooking Risks and Essential Retirement Considerations
Many engaged in future planning overlook the extra costs that come with age, such as healthcare. Medical bills often climb faster than expected, as regular check-ups, prescriptions, or treatments become routine. Insurance might cover only some expenses, leaving gaps that eat into funds set aside for other needs.
Failing to consider how long retirement could last also causes problems. People live longer than past generations, and underestimating lifespan risks running out of resources. Retiring at sixty-five but living to ninety stretches finances over decades, and the difference in planning can be the difference between stress and stability.
Taxes on withdrawals also catch many by surprise. Retirement income can push some into higher tax brackets or trigger taxes on Social Security. Ignoring these impacts leaves less to spend, reducing the value of hard-earned savings. Plans need to account for what will be left after taxes, not just before. Not having a detailed retirement budget creates further uncertainty.
Notes Hatcher, “Without a month-by-month or yearly guide, it is difficult to spot when spending creeps above what can be supported.”
A clear budget helps track progress, adjust habits, and keep everyone on the same page if more than one person is involved. As lives change, so do needs and priorities. Failing to revisit retirement plans or update them after major events can leave important areas forgotten. Divorce, widowhood, moving, or new health needs all affect plans.
By ignoring the need for regular reviews, cracks grow wider until they threaten the whole structure. Considering these risks and updating plans as life shifts, people can protect long-term well-being and enjoy greater peace of mind throughout retirement.
Missing Out on Professional Guidance and Regular Plan Updates
Trying to plan everything alone often leads to missed insights or incorrect choices. The world of retirement planning includes complex rules, changing tax laws, and shifting financial products. Without years of experience or specialized knowledge, it is easy to overlook available benefits or make costly errors.
Many avoid seeking help, believing they should handle everything on their own. Sometimes, people worry about the cost of financial advisors, not realizing that qualified guidance may save more than it costs. Professional advice can help identify blind spots, select the right savings options, and tailor plans to match personal goals. Small changes made with the right advice can fill gaps large enough to shift the future.
Plans left untouched for years quickly grow stale. Once a plan is written, it needs regular checkups, much like a car or a house. Tax rules, market conditions, and personal health all change over time. Plans that remain static risk falling behind or missing out on new opportunities, such as changes in contribution limits, credit programs, or ways to lower taxes.
Failing to adjust for these new factors means that even a well-thought-out plan at one moment can become outdated, exposing those it was meant to protect. Reviewing plans with a trusted expert at set intervals, and more often during major life events, helps close these gaps.
By seeking the right guidance and staying up-to-date as things change, people gain more control over their outcomes and avoid many of the biggest gaps in retirement planning.
“Retirement should bring comfort and security, not surprises or stress. Many suffer setbacks from simple mistakes like waiting too long to save, underestimating costs, ignoring inflation, and taking money out too soon,” says Hatcher.
Others face avoidable challenges by overlooking rising health expenses, not planning for a longer life, or ignoring the effect of taxes on withdrawals. Some fail to create a realistic budget or let outdated plans gather dust as life shifts.
Ignoring the need for outside help or regular plan reviews cuts off valuable insight and limits growth. Turning to knowledgeable advisors can prevent missteps that would otherwise go unnoticed. The most successful retirement plans stay flexible, adapt to changes, and keep clear records.
By knowing and avoiding these common errors, each person stands a better chance of shaping the retirement they want. Review existing plans, seek answers from trusted professionals, and make thoughtful updates as life moves on. These steps do not take luck or special skills—they need only steady attention and care. A secure retirement belongs to those who prepare wisely and act before the window closes.