The Top 5 Retirement Regrets - And How to Avoid Them
Retirement might seem far off, but the sooner you start planning, the more comfortable and secure your future will be.
Getting going early gets the ball rolling but even the most well-intentioned savers make mistakes along the way. So how do you avoid the mine field of missteps that can derail your retirement goals and leave you scrambling at the last minute?
In this post, we’ll highlight five critical retirement planning mistakes that can quietly undermine even the most diligent savers—and offer practical strategies to help you avoid them. Whether you're in your 30s, 40s, or 50s, now is the perfect time to course correct and build a more confident path forward.
1. Underestimating How Much You’ll Need
The most common mistake we see? Not saving enough for retirement.
Many people believe they’ll be fine living off a fraction of their pre-retirement income. But the reality is that most retirees will need around 70-80% of their pre-retirement income just to maintain their standard of living. Depending on your lifestyle, that number could be much higher.
Key factors to consider when estimating retirement expenses:
Healthcare costs: These can significantly increase in retirement, especially if you’re living longer.
Lifestyle choices: Travel, hobbies, or simply maintaining a higher standard of living.
Inflation: Over time, the cost of living increases, which means you’ll need to save even more to keep up.
The best way to prepare is to start saving early and consistently. Use tools like retirement calculators to estimate future needs—and be honest with yourself about your retirement lifestyle goals.
The Takeaway: Retirement planning works best when your assumptions are realistic—and revisited regularly.
2. Relying Too Heavily on Social Security
While Social Security will play an important role in your retirement income, it’s unlikely to cover all your expenses. In fact, for many people, it will only replace a small portion of their pre-retirement income.
The average Social Security benefit is about $1,600 per month—far from enough to fund a comfortable retirement. For high earners, the benefit will be even lower in relation to their pre-retirement income.
Instead of relying on Social Security as your primary income source, consider:
Maximizing your 401(k) and IRA contributions
Building a diversified investment portfolio
Using tax-efficient strategies to accumulate wealth
It’s important to view Social Security as a supplement, not the backbone, of your retirement plan.
The Takeaway: Social Security should support your retirement strategy, but long-term security depends on building income sources you control.
3. Not Adjusting Your Asset Allocation Over Time
Your investment strategy should change as you approach retirement. Many people make the mistake of staying too aggressive—or too conservative—once they reach a certain age.
Here’s the strategy we recommend:
In your 30s and 40s: Focus on growth assets like stocks and equity-based funds.
In your 50s and 60s: Start shifting to a more balanced mix of stocks, bonds, and cash equivalents to reduce risk.
In retirement: Focus on preserving capital and generating income but still maintain some growth potential to account for inflation.
A good rule of thumb is the “100 minus age” rule for asset allocation. For example, at age 60, 40% of your portfolio should be in bonds and cash equivalents, with the remaining 60% in stocks and other growth assets.
The Takeaway: As retirement approaches, your investment strategy should evolve to balance growth, risk management, and income sustainability.
4. Failing to Account for Healthcare Costs
Healthcare costs are a major concern for retirees, and many people don’t plan for them adequately. Medicare doesn’t cover everything, and out-of-pocket expenses can add up quickly.
Consider the following:
Medicare premiums: While Medicare itself is affordable, you’ll still need to budget for premiums, co-pays, and other out-of-pocket costs.
Long-term care: As you age, the likelihood of needing long-term care increases. Traditional Medicare doesn’t cover most long-term care services, so having a long-term care insurance policy or alternative plan in place is crucial.
We recommend setting aside a specific portion of your retirement savings for healthcare expenses. Research Health Savings Accounts (HSAs) if you’re eligible, as they provide tax advantages for medical costs both during retirement and before.
The Takeaway: Planning for healthcare and long-term care expenses is essential, as these costs can quietly become one of retirement’s largest financial burdens.
5. Ignoring Required Minimum Distributions (RMDs)
Once you turn 73, the IRS requires you to start withdrawing a minimum amount from your tax-deferred retirement accounts, such as a 401(k) or traditional IRA. These are called Required Minimum Distributions (RMDs).
Here’s the problem: Many retirees fail to plan for the tax implications of RMDs. These withdrawals are considered taxable income, which means they can push you into a higher tax bracket, increasing your overall tax liability.
To minimize the impact of RMDs:
Consider Roth conversions while you’re still working, when your tax bracket may be lower.
Plan your withdrawals strategically to avoid large, taxable RMDs later in retirement.
The key is to understand how RMDs will affect your income and taxes—and plan accordingly.
The Takeaway: : Proactive tax planning before retirement can significantly reduce the impact of RMDs and help preserve more of your wealth.
How to Get Back on Track
If you recognize any of these mistakes in your own retirement plan, don't worry. It’s never too late to get back on track. At Heyman Wealth Management, we work with clients to build custom retirement plans that:
Anticipate future expenses
Minimize tax impact
Maximize your income potential in retirement
We help you avoid the costly mistakes that derail retirement plans and guide you toward a comfortable, secure retirement.
Schedule a consultation to revisit your retirement plan and ensure you’re on track for the future you deserve.
