I’ve observed three common and significant mistakes people make that can derail their retirement dreams. The good news? Even mistakes can be corrected, and it’s never too late to start.
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Everyone dreams of a comfortable retirement, a time to pursue passions, travel, or simply relax without financial worries. Yet, despite this fundamental truth, I’ve observed three common and significant mistakes people make that can derail their retirement dreams. The good news? Even mistakes can be corrected, and it’s never too late to start. The first step is always taking a realistic look at your current financial picture. Then, honestly examine your future needs, factoring in elements like inflation, desired lifestyle, and potential dependent care.
Mistake #1: Hiring the Wrong Financial Advisor
Perhaps the most critical mistake, and one I see far too often, is entrusting your financial future to the wrong kind of advisor. Early in my career, I noticed that something was not quite right with the way financial services companies operated. Many firms were “one and done,” focusing on closing a deal and getting a commission, rather than building long-term relationships and genuinely caring about the people behind those deals. When I meet with clients, they’ll often say, “The last person I worked with didn’t give me all this information and knowledge.” That’s because there’s a crucial difference between an “investment adviser” and a true “financial planner.” Not to mention my own ethical integrity, even if they are just coming in for a consultation and are not a client yet, makes me want to give them the best and wisest information.
This is a different approach in the financial services industry, where most of my peers are “broker-dealers.” These advisors earn commissions or fees based on the financial products they sell, like mutual funds or insurance-based products, which can lead to significant conflicts of interest. They aren’t required to disclose their financial interests in the products they push. In addition, this advice is often “cookie-cutter” and simply doesn’t measure up when it comes to retirement, especially for complex financial situations.
I believe in being a fee-only company, meaning our compensation comes solely from the fees clients pay for our expertise. My team members earn generous salaries, not commissions, so their focus is entirely on the client. Certified Financial Planners (CFPs) are legally obligated to act as a fiduciary for their clients, meaning we are legally obligated and liable to do what is in our clients’ best interest 100 percent of the time. This model is rare, representing only about five percent of the industry.
Mistake #2: Procrastinating on Saving
The second major mistake is simply delaying or avoiding saving for retirement. My father, “Honest Abe,” taught me invaluable lessons about discipline and delayed gratification. I started saving early, purchasing my first company stock just weeks after turning eighteen. I even bought my first house at twenty years old. I was convinced it was possible because in my high school and college jobs at banks, I had studied how the rich get richer and absorbed those lessons.
The core principle of building wealth is simple: We save. You cannot finance retirement in retirement; you must pay yourself first. While it’s never too late to begin, starting early is always better. My experience shows that individuals who set out to understand their retirement picture early are often on track to accumulate significant wealth, even millions, by retirement.
Today, a concerning 56 percent of Americans report they are “not on track to retire comfortably, and 27 percent of Baby Boomers have no retirement savings at all. If you’re a high earner but not rich yet, now is precisely the time to embrace the long game and start saving and investing with discipline.
Mistake #3: Failing to Plan for the Unpredictable
Finally, many people fail to plan for the unpredictable nature of retirement itself. This includes underestimating the length of retirement, the impact of inflation, and the costs of unexpected healthcare needs.
Life expectancy has increased significantly; for example, between 1950 and 2025, U.S. life expectancy rose by a decade. Your money needs to last longer than previous generations’ did, and most people want to maintain or even enhance their standard of living throughout retirement. This means your retirement fund must account for a much longer trajectory, which your current lifestyle spending might not sustain without proper planning.
A significant oversight is inflation. I’ve seen Silicon Valley clients aiming to retire early who don’t realize their current $175,000 annual lifestyle could easily require $350,000 in just fifteen years due to inflation. This dramatically impacts how much you truly need to save.
Another often-missed element is the healthcare gap. If you retire before age sixty-five, you face a period without Medicare, forcing you to secure expensive private insurance or COBRA plans. Even wealthy individuals are concerned about paying tens of thousands in premiums. Beyond that, the need for long-term care (LTC) is substantial, especially as our population ages.
Finally, many people fall into a tax trap they didn’t anticipate. They save diligently in tax-deferred accounts, like Traditional 401(k)s, but by retirement, their wealth has grown so much that Required Minimum Distributions (RMDs) can push them into a higher tax bracket than they ever experienced while working. For example, a $6 million portfolio could trigger a $240,000 annual RMD, creating a substantial, unexpected tax burden. This is why tax planning is paramount, and a truly comprehensive financial planner looks at your entire financial picture to navigate these complexities.
Correcting the Course
The good news is that these mistakes are fixable. It’s never too late to start saving, and by gaining a clear understanding of your financial situation, you can begin to build a robust plan. The key is to find the right financial partner—someone with expertise, a fiduciary duty, and a commitment to understanding your personal dreams for retirement, what matters to you. This partner will help you customize your strategy, account for inflation, unexpected costs, and the unique challenges of your retirement. They will help you make your money work for you, not against you, ensuring your hard-earned wealth helps you achieve true financial freedom.