The 5 Most Common Mistakes in Retirement Planning

Legendary basketball coach John Wooden once said, “It is what we learn after we know it all that counts.” That quote perfectly captures one of the greatest challenges in retirement planning.

As human beings, we like to feel respected and knowledgeable—and we really don’t like being wrong. That feeling often grows stronger as we get older. Unfortunately, when confidence turns into pride or overconfidence, it can lead to costly consequences, especially when it comes to your health and your money.

Over the years, we’ve seen it time and again: people allowing pride to stand in the way of sound financial decisions. A few weeks ago, a good friend and client summed it up perfectly when she said, “I imagine the hardest part of your business is protecting people from themselves.” She was right.

We can’t battle someone’s pride—we’ll lose every time. We can only help those who are open to being helped. With that in mind, here are the five most common mistakes we see people make when planning for retirement—or while already living in it.

Mistake #1: Making Assumptions from the Start

Most people have a rough idea of when they want to retire and where their income will come from. Beyond that, things often get fuzzy. Unfortunately, the details people gloss over are usually the most important ones.

We often hear statements like this from couples nearing retirement:

“We plan to retire in three years and live off Social Security, Ronald’s pension, and the interest from our investments.”

At first glance, that sounds like a solid plan. But critical questions quickly surface:

• Will that income support your current lifestyle—or the lifestyle you want in retirement?
• Will it still be enough 10 or 15 years down the road?
• What safeguards are in place to prevent running out of money?
• If Ronald passes away, what happens to his Social Security?
• Will his spouse continue receiving pension income?

Assumptions can create a false sense of security. A well-thought-out plan replaces assumptions with clarity.

Mistake #2: Failing to Protect Your Retirement

If the bank didn’t require homeowners insurance, would you still insure your home? Of course you would. It’s one of your largest financial assets—why risk it?

So why do so many people risk their retirement?

Retirement comes with a unique set of risks, any one of which can be financially devastating if left unaddressed:

• Living longer than expected
• Dying too soon
• Short-term or long-term disability
• Loss of independence or long-term care needs
• Serious illness
• Lawsuits
• Inflation
• Market volatility
• Taxes and interest rate changes

The question isn’t whether these risks exist—it’s whether you’re protected from them.

Mistake #3: Paying Too Much in Taxes

Whether you love the tax system or hate it, one thing is certain: taxes can quietly erode your retirement if you’re not careful.

Many people are surprised to learn that the amount of Social Security that gets taxed depends on your total income. In other words, higher income doesn’t just mean higher taxes—it can also mean paying taxes on benefits you thought were tax-free.

Here’s a simple illustration of how powerful taxes can be:

Imagine you start with $1 and it doubles to $2. Then it doubles again…and again—30 times in total. Without taxes, you’d end up with over $1 million.

Now imagine Uncle Sam takes 25% every time your money doubles. Your final total? $72,570.64.

That’s the silent impact of taxes over time—and why proactive tax planning is essential.

Mistake #4: Emotional Investing

Are you emotionally attached to your money? Of course you are—we all are. You worked hard for it, and the thought of losing it is unsettling.

But emotional attachment is often the root cause of the biggest investment mistakes:

• When markets are booming, we hear success stories and get greedy—buying when prices are high.
• When markets decline, fear takes over—and we sell when prices are low.
• When uncertainty dominates the headlines, we retreat into cash or CDs, quietly losing purchasing power to inflation and taxes.

Successful investing isn’t about reacting emotionally—it’s about having a disciplined strategy that keeps emotions in check.

Mistake #5: Piecemealing a Plan

Many people spread their assets across multiple financial institutions and consult several advisors, tax professionals, and attorneys each year. While the effort is admirable, this approach often creates serious problems.

Why? Because it leads to gaps and overlaps.

We often ask clients, “How does one advisor know what the others are doing?” The answer is usually, “I tell them.”

In a world this complex, relying on memory—and hoping nothing gets overlooked—is risky. When we’re finally given permission to review everything together, we almost always find unnecessary risk created by disconnected strategies.

Think of it this way: if something feels off with your health, do you go straight to a heart surgeon—or start with your primary care doctor? Everyone needs a general financial doctor—someone who sees the whole picture and brings in specialists only when needed.

A Final Thought

Retirement is one of the most significant life transitions you’ll ever make. You may spend more years in retirement than you did working—and that reality demands careful, intentional planning.

A rock-solid retirement plan isn’t built on assumptions, emotions, or fragmented advice. It’s built on humility, coordination, and preparation.

We dedicate thousands of hours each year to studying, learning, and applying new strategies through the real-life experiences of our clients—and we’re still learning. That commitment exists for one reason: to help people retire successfully and stay retired successfully.

If you have questions or want to take a closer look at your own plan, please feel free to give us a call.