By Max Michalczik CFP® & Kekoa Pfau ChFC®

Introduction

Retirement is meant to be the reward for a lifetime of hard work. However, too many people enter their golden years unprepared and unaware of the mistakes that can derail decades of savings.

The good news? By understanding these mistakes, you can avoid them—and secure a more comfortable, confident retirement.

Mistake #1: Waiting Too Long to Start Saving

One of the biggest advantages in retirement planning is time. Thanks to the power of compound growth, even small amounts saved early can grow into significant sums.

Delaying saving means you must contribute more aggressively later in life to catch up—and many people simply cannot.

Quick Tips:

• Start saving as early as possible – even small amounts add up.
• Take advantage of employer retirement plans and matches.

Mistake #2: Underestimating Healthcare Costs

Healthcare costs often rise faster than inflation and can be a major burden in retirement. Fidelity estimates that the average 65-year-old retired couple may need more than $345,000 to cover healthcare expenses throughout retirement, excluding long-term care. [1]

Without preparing, medical bills can quickly drain your savings.

Quick Tips:

• Factor healthcare into your retirement budget.
• Consider long-term care insurance and HSA savings.

Mistake #3: Relying Solely on Social Security

Social Security provides a foundation but rarely covers all living expenses. According to the Social Security Administration, the average monthly benefit for a retired worker is approximately $2,071[2], which is often insufficient to support most retirement lifestyles.

Relying only on this benefit can lead to shortfalls and financial stress.

Quick Tips:

• Treat Social Security as supplemental income, not your plan.
• Build retirement savings in 401(k)s, IRAs, and brokerage accounts.

Mistake #4: Taking the Wrong Amount of Risk

Some investors take too much risk and face large losses before or during retirement. Others take too little, and inflation erodes their purchasing power.

The right balance is critical depending on your goals, time horizon, and risk tolerance.

Quick Tips:

• Rebalance your portfolio regularly.
• Work with an advisor to align risk with your needs.

Mistake #5: Ignoring Taxes in Retirement

Taxes do not go away in retirement. Withdrawals from IRAs, 401(k)s, and pensions are usually taxable, and without planning, this can significantly reduce your net income.

Failing to account for taxes may force you to draw down savings faster than expected.

Quick Tips:

• Use Roth accounts or conversions strategically.
• Plan distributions to minimize tax brackets.

Conclusion

The mistakes above are common – but they are also avoidable. With the right guidance, you can make smarter choices today that protect your tomorrow.

You do not have to do it alone. A financial advisor can help you navigate these challenges.

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[1] https://newsroom.fidelity.com/pressreleases/fidelity-investments–releases-2025-retiree-health-care-cost-estimate–a-timely-reminder-for-all-gen/s/3c62e988-12e2-4dc8-afb4-f44b06c6d52e

[2] https://www.ssa.gov/faqs/en/questions/KA-01903.html

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_{This content is for educational and informational purposes only and should not be considered personalized investment, tax, or legal advice. The information provided is general in nature and may not apply to your individual circumstances. All investments involve risk, including the potential loss of principal.
The Freyr Group, LLC does not provide legal or tax advice. Any references to tax-related topics are provided for general informational purposes only, and individuals should consult with a qualified tax professional regarding their specific situation.
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