Top 10 Retirement Blunders Most People Make (And How You Can Avoid Them)
Allow me to share a few scary facts. One: Insomnia can be fatal. Two: Crows remember faces and hold grudges. And three: half of American households have NO retirement savings. If the first two facts didn’t scare you, I’m quite certain the third one sent a tiny shiver down your spine! That’s one of the many retirement blunders older (and younger) adults can make. However, it’s not the only mistake out there. In fact, there are hundreds, if not thousands, of ways you can sabotage your retirement. Have I got your attention yet? Good! Because I’m about to share more about the TEN most common retirement blunders. Better yet, I’m also about to tell you how you can avoid them.
1. Not adjusting your lifestyle after retirement.
If you’re retired, congratulations! Now is the time to kick back, relax, and do all the things you told yourself you wanted to do once you retired. Within reason, of course. Retirement isn’t an excuse to start spending money like crazy. Remember, you’re on a fixed income! While you can still take that trip to the Grand Canyon that you’ve been daydreaming about for decades, spend your money wisely. Create a new budget to reflect your post-retirement reality. Also, make sure you have some money set aside for emergencies and long-term care! While you might want to age in place like the majority of older adults, life might have other plans. So, adjust your budget (and, if necessary, your expectations) so you can enjoy retirement without stressing about your finances!
2. Not rethinking your investment strategy.
According to First Western Trust, you should begin reassessing your investment strategy before you even retire. That means adjusting your portfolio and incorporating a few income-based assets, like stocks that pay dividends, real estate investment trusts (REITs), and bonds. And don’t forget to work with a financial advisor! They can help you figure out where to invest your money and even tell you how to fix your portfolio if it isn’t profitable.
3. Claiming Social Security too early.
Sure, you can claim Social Security benefits early. However, much like with skydiving or sticking your hand into a hornet’s nest, just because you can doesn’t mean you should. Most experts recommend delaying Social Security for as long as possible. Claiming your benefits too early means receiving a reduced monthly payment. For every year that you delay benefits once you reach retirement age, your benefits increase by 8% a year, maxing out at age 70. While you shouldn’t delay your benefits for too long, you definitely shouldn’t claim them too early, either! Try to hold off for as long as you can for the sake of your monthly payment!
4. Not being vigilant about fraud and scams.
In a particularly memorable scene from The Office, Steve Carell’s Michael Scott says, “You know what, Toby? When the son of the deposed King of Nigeria emails you directly asking for help, you help.” While fans of The Office might laugh at that scene and Michael’s gullible nature, fraud is no laughing matter in real life. According to an FTC report, $12.5 billion was stolen through scams and fraud in 2024. Unfortunately, fraud and scams can drain your retirement savings even faster than Prime Day. Always be on your guard. If someone calls claiming to be from Apple or Microsoft, don’t take them at face value. Do your homework and stay up to date about the latest scams targeting elders.
5. Cashing out pension prematurely.
Sure, some circumstances allow you to cash out your pension early. As I stated a few paragraphs ago, just because you can doesn’t necessarily mean you should. For example, you can withdraw money from your 401K early. However, if you do so before the age of 59 and a half, the IRS may hit you with a 10% tax as an early distribution penalty, according to NerdWallet. Even withdrawing a smaller amount, such as $5,000 from a $100,000 retirement savings account, could result in over $11,000 of lost savings over fifteen years. So, think long and hard before you decide to dip into your 401K.
6. Overpaying taxes.
Yep, it happens. Sometimes, you can overpay on your taxes, especially with IRA distributions. While contributions to these accounts are usually tax-deductible in the year you make them (per Investopedia), the money will be taxed if it’s withdrawn as retirement income. Plus, if your IRA custodian doesn’t keep good records, you might end up accidentally being double-taxed. Don’t just rely on a third party to keep track of your contributions. Make a ledger and update it regularly! Also, talk to a tax professional and have them look over your records and make sure you aren’t overpaying on your taxes.
7. Financially supporting adult children.
Most people love their kids. When they’re adults, you might even have a hard time seeing them as all grown up. Unfortunately, that mindset can hurt you and your bank account if you aren’t careful. For example, if one or more of your adult kids have gotten themselves into a financial pickle, remember that it’s not your duty to help them out. Unless you’re financially secure, you shouldn’t just fork over loans at the drop of a hat. While it’s normal and even noble to want to help your grown-up kids, don’t help them at the expense of your peace of mind! Don’t let your heart make important financial decisions without your brain’s involvement!
8. Not staying socially and physically active.
If you don’t stay socially and physically active in retirement, you’re doing yourself a huge disservice. I understand that it might not be easy to make friends or keep up with old ones in retirement. After all, you didn’t have to work too hard to maintain your work friendships. You just had to show up five days a week at your workplace! Believe it or not, loneliness can be as deadly as smoking and obesity, so make time for your friends and loved ones. Enroll in a class or join a local club. If you aren’t active in a church, check out some of the churches near you and see if you can spark some potential friendships.
Don’t let your new, slower-paced retirement life lead to laziness. Now is the perfect time to join a gym and hit the nearest walking trail! Make it a point to stretch every day and stay active. You don’t necessarily have to join a gym to stay moving. Get up off your couch every twenty minutes or so and walk a few laps around your house. Even cleaning can burn some calories, so try to keep up with your chores and do a little something every day!
9. Jumping right into a big move.
Maybe you’ve dreamed of living in Florida ever since you visited Disney World as a child. Or maybe California’s rocky beaches and redwood forests are calling your name. Or maybe, just maybe, you want to trade a sleepy small town for the hustle and bustle of the Big Apple. Whatever the case, retirement is the perfect time for a big move. My suggestion? Try before you buy. Visit your dream retirement locale in person more than once to get a good feel for the local culture and hotspots. Research the real estate market and cost of living. Some cities have a lot for young people, but might not be able to offer you quite as much. Sure, Florida is beautiful, but it also has hurricane season and some of the hottest summers this side of the equator. Meanwhile, California is occasionally jostled by earthquakes and other natural disasters. Do your research and don’t assume the grass is greener on the other side of state lines!
10. Not saving for long-term care.
Did you know that a staggering 90% of older adults want to age in place? With numbers like that, I think it’s a fair assumption that a lot of seniors don’t exactly have a long-term care fund. Some might have no savings in that department at all! And while you probably don’t want to imagine a future where you trade your cozy home for an assisted living facility, you need to prepare for it, anyway. As in, you should start a long-term care fund and contribute a little to it every pay period. While your insurance and even Medicare might cover some long-term care costs, they can’t pay for it all. Have at least a couple of thousand dollars squirreled away for the future.
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Originally published July 18, 2025
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