The 5 Worst Retirement Mistakes to Avoid at All Costs

To do retirement right you need a disciplined savings plan, a good understanding of Social Security, a sound investment strategy and a vision of retirement that provides for adequate self-fulfillment without overspending your fixed-income budget. Behind those simple principles lies a complex set of ways it can all go wrong, ranging from borrowing against your 401(k) to taking up smoking late in life. There are certain things, though, that you’ll want to make sure to avoid at all costs.

It is certainly not impossible or even rare to achieve a financially secure and rewarding retirement. People over age 65, in fact, are much less likely to live in actual poverty than those still working, according to the Census Bureau. And retirees surveyed by the Employee Benefit Research Institute (EBRI) in 2022 rated their satisfaction with life in retirement at an average 7 on a scale of 1 to 10.

That does not, however, mean there’s no way to go wrong. After all, more than 1 in 10 retirees do live in poverty, per Census. And 27% of EBRI’s respondents said their spending was much higher or a little higher than they could afford.

Every retiree’s case is a little different, and it’s likely that the people who aren’t having a great retirement have a multitude of stories about how things didn’t turn out well. Still, we can make some useful generalizations about most important retirement mistakes to avoid. Here are five of the worst:

The biggest single error mistake may be pretending retirement won’t ever arrive when, for a large majority of people, it does. About 67.8% of men born in 1980 will live to age 65, according to the Social Security Administration. For women, the figure is 80.9%. Not planning to retire encourages more mistakes, like failing to budget, save and invest to fund living expenses later in life when working becomes difficult or impossible. It’s worth noting that EBRI’s survey found lower senses of well-being and satisfaction for those who, among other traits, did not use a financial advisor.

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