Retirement should be a time of freedom, not financial fear. Yet, many retirees find themselves struggling—not because they didn’t save, but because they made avoidable mistakes along the way. Whether you’re five years from retirement or already there, steering clear of these common pitfalls can make all the difference.

Here are five of the most frequent retirement missteps—and how to sidestep them with confidence.

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1. Underestimating Healthcare Costs

The Mistake: Many retirees assume Medicare will cover everything. It doesn’t. From premiums and prescriptions to long-term care, out-of-pocket costs can be staggering.

Real-Life Example:
John and Mary, both in their 70s, didn’t plan for long-term care. When Mary developed Alzheimer’s, they faced $8,000/month in memory care costs. Their savings vanished in five years, forcing them to sell their home and rely on Medicaid.

The Fix:

• Open and fund a Health Savings Account (HSA) while you’re still working.
• Consider long-term care insurance in your 50s or early 60s.
• Budget for Medicare premiums, Medigap, and out-of-pocket expenses—Fidelity estimates a 65-year-old couple may need $250,000+ for healthcare in retirement [1].

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2. Relying Too Much on Social Security or a Pension

The Mistake: Social Security was never meant to be your only income. And pensions? They’re not always guaranteed.

Real-Life Example:
Robert, a retired auto worker, depended solely on his $3,000/month pension. When the company filed for bankruptcy, his pension was slashed by 30%. With no other savings, he struggled to pay bills.

The Fix:

• Treat Social Security as a supplement, not a foundation.
• Build a diversified portfolio with 401(k)s, IRAs, and taxable investments.
• Use retirement calculators to estimate your income gap and plan accordingly.

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3. Overspending in the Early Years

The Mistake: Retirement feels like a reward, and many treat it that way with lavish spending. But draining your savings early can lead to hardship later.

Real-Life Example:
Tom and Sue bought a $150,000 RV right after retiring. After two years, they were over the lifestyle—and had already spent 20% of their savings. The RV’s resale value had dropped to $90,000.

The Fix:

• Test-drive big lifestyle changes (e.g., rent an RV before buying).
• Follow the 4% rule or a dynamic withdrawal strategy.
• Create a retirement budget that balances fun with sustainability.

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The Mistake: Taking Social Security at 62 may seem smart, but it can cost you hundreds of thousands over time.

Real-Life Example:
James claimed at 62, receiving $1,500/month. Had he waited until 70, he would’ve received $2,640/month. Over 20 years, that’s a $273,600 difference.

The Fix:

• Delay benefits until full retirement age or later if possible.
• Use other savings to bridge the gap.
• Consider spousal and survivor benefits when timing your claim.

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Final Thoughts: Plan Smart, Retire Confident

Retirement isn’t just about saving—it’s about strategic decision-making. These five mistakes are common, but they’re also preventable. By planning ahead, staying flexible, and seeking professional advice, you can enjoy the retirement you’ve worked so hard for.

Need help building a bulletproof retirement plan?
Schedule a free consultation or explore our retirement planning tools to get started today.

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References