The Six Biggest Retirement Mistakes

Written by: Andrew Briesacher, Senior Wealth Manager

Many times, we’re asked, “What are the most important considerations when retiring?” On the flip side, we also hear, “What are the biggest mistakes you see people make?” 

While this isn’t meant to be an all-inclusive list, these six points highlight the most common “red-flag whoopsies” we see from retirees who didn’t receive comprehensive guidance from a full retirement-planning firm like Wheelhouse. You may be surprised to learn that while some mistakes are strictly financial, others fall more on the emotional and psychological side. As we often say, retirement is 49% math, 50% emotion, and 1% dumb luck! 

1. Underestimating Expenses 

• Many retirees incorrectly assume their costs will drop dramatically. However, expenses like healthcare, travel, home maintenance, and taxes often remain high. We often say that while most near-retirees focus on how much they need to save, the more important number is actually how much they spend. It’s essential to sit down and put pen to paper to map out your true expenses: retirees rarely change their lifestyles simply because they stop working. 

2. Not Accounting for Inflation 

• Inflation quietly erodes purchasing power over time. A 3% annual rate can cut your buying power in half over 24 years. We often see retirees relying solely on pensions or Social Security, even though many pensions lack cost-of-living adjustments and Social Security COLAs rarely keep pace with real inflation. It’s important to consider this when planning to avoid outliving your money, especially as healthcare and long-term care costs continue to rise. 

3. Being Too Conservative or Too Aggressive with Investments 

• Some investors assume there’s a one-size-fits-all approach to retirement investing. In reality, it’s crucial to understand your goals, the role your investments play in reaching them, and your personal risk tolerance. As the old boxing adage goes, “Everyone has a plan until they get punched in the face.” In retirement, market volatility feels very different when you’re withdrawing money instead of contributing to a 401(k). 

• On the other hand, being too conservative can mean falling behind inflation. A well-balanced portfolio should include some growth for funds that need to last over a 20–30-year retirement. 

4. Not Having a Withdrawal Plan 

• Without a structured withdrawal strategy, retirees risk overspending early, withdrawing at the wrong time, or dipping into accounts with penalties or market-driven losses. Using a “bucket strategy” ensures you always have a backup plan for your backup plan. While we view a 4% withdrawal rate as a reasonable guideline (or lower being even better), preparation for unexpected events is equally important. 

5. Retiring Without a Purpose 

• Work provides structure, identity, and social connection. Many retirees struggle emotionally when those elements disappear. It’s essential to have hobbies, travel plans, volunteer commitments, part-time work, or other meaningful activities to stay engaged. 

• Relaxation is wonderful, but once the “honeymoon phase” fades, boredom and apathy can set in. Finding your passion in retirement is critical to your mental health, well-being, and overall happiness. 

6. Supporting Adult Children Too Much 

• This topic can be sensitive because the desire to help family comes from a good place. Many retirees continue financially supporting adult children, grandchildren, nieces or nephews, even when it strains their own resources. While generous gifts, occasional support, or helping during true emergencies can be appropriate, ongoing assistance that enables unhealthy financial habits can jeopardize your retirement. 

• Just like on an airplane, you must secure your own oxygen mask first. You cannot sacrifice your retirement stability for someone else’s repeated financial missteps. In some cases, helping that family member access professional financial counseling is the healthier, and more sustainable, solution for everyone involved. 

Certainly, there is a lot to consider when planning for retirement. This list isn’t meant to scare you, but rather to highlight that retirement involves both financial management and emotional adjustment. Hiring a financial advisor can be critical, not only for the numbers, but for guidance through the psychological shifts that come with retirement. If you’re worried you may have “speed bumps” or any other unexpected detours that could arise in your plan, reach out to Wheelhouse to see where we can bring you value.