5 Common Retirement Mistakes
5 Common Retirement Mistakes
No matter your current age, you should already be planning for retirement; or the phrase I prefer: Financial Independence. Don’t wait until you’re 50 or older to start planning, as you may discover you waited too long.
Here are some of the common mistakes I have come across in working with clients over the years.
1. Not Investing Early Enough (and Underestimating Time)
This is the most obvious mistake, but it’s still the most damaging. Many fully intend to “get serious” about retirement savings at some point in the future—after their income increases, after the kids are out of the house, or after a few other financial priorities are handled first. Not to mention, when you’re 25, being retirement age seems like an eternity away. But as those of us who are older know, time flies.
Time is the single most powerful factor in retirement planning. Starting early allows compound growth to do the heavy lifting. Starting late means you’re forced to rely on larger contributions, higher returns, or both—none of which are guaranteed.
Why this hurts more than people realize:
Every year delayed permanently reduces the power of compounding
Catch-up contributions rarely make up for lost time
Later starts often require higher risk at the worst possible stage of life
What to do instead:
Start saving as early as possible, even if the amount feels small
Focus on consistency first, optimization later
Increase contributions gradually as income grows rather than waiting for a “perfect” moment
The goal early on isn’t perfection—it’s momentum.
2. Waiting for the “Right Time” to Invest
This mistake often sounds responsible on the surface. I’ve often heard things like “I’m just waiting for the market to pull back.” Or, “I’ll invest once things calm down.” Or, “I don’t want to put money in right before a downturn.”
Unfortunately, the market doesn’t send invitations when conditions are ideal. People who wait for the “right time” usually end up investing after prices have already risen—or worse, sitting in cash indefinitely while inflation quietly erodes purchasing power.
When you’re focused on the day-to-day fluctuations in the market, it can be quite stressful to try and time the perfect entry. But when you zoom out and look at how the market has grown over years and decades, the right time to invest has always been now.
I like to think of it this way. Imagine someone walking up the stairs while playing with a yo-yo. The yo-yo is the daily markets, up and down, up and down. But when you take a step back and look at the bigger picture, you’ll notice the yo-yo is consistently going up, despite the short term bounces.
Start as early as you can and don’t wait to find the perfect entry point
3. Taking Retirement Withdrawals Early
When you’re in a financial pinch, it can look tempting to just withdraw a chunk from your retirement account. After all, it’s your money, and you can always make up for it later, right? When you withdraw from retirement before age 59 ½, not only is the money you take out no longer going to compound over time, but you will be taxed and likely penalized on it (with few exceptions).
In other words, taking a withdrawal of $25,000 from your IRA when you’re 30 may not seem like a big deal. But it is. If you had left that $25,000 invested, it could have turned into over $500,000 by the time you’re 65, assuming an average annual rate of return of 10+%. Even a more conservative return of 6% annually could have grown that $25,000 to over $200,000. This is not even factoring in the tax cost of the early withdrawal.
I’m not saying there are never emergency situations that could justify an early retirement withdrawal. But it’s a costly decision.
4. Not Understanding Social Security Decisions
Social Security is often treated as an afterthought, even though it can represent a meaningful portion of retirement income. Many people default to claiming as soon as they’re eligible, without understanding how timing affects lifetime benefits—especially for married couples.
Common mistakes:
Claiming early without evaluating longevity risk
Failing to coordinate benefits between spouses
Overlooking survivor and spousal benefits
What to do instead:
Analyze multiple claiming strategies, not just the earliest option
Consider health, longevity, and income needs—not just break-even points
Coordinate Social Security decisions with overall retirement income planning
Optimizing Social Security isn’t about gaming the system—it’s about making an informed decision that aligns with your broader plan.
5. Retiring From Work Instead of Retiring To Something
This is perhaps most overlooked retirement mistake— because it has nothing to do with money. Financially, retirement planning gets most of the attention. Lifestyle planning often gets none.
Many retirees underestimate how much of their identity, structure, and social interaction comes from work. When that disappears overnight, it can lead to boredom, loss of purpose, or even depression.
So, rather than just looking forward to being able to sleep in as late as you want and not having to answer to anyone; think instead of what you’ll actually do with your time. What will give you meaning and fulfillment? What will bring you joy and fun? What hobbies do you want to pursue, how often do you want to travel, and what kind of volunteer work might you want to be involved in?
Just ‘not working’ isn’t all its cracked up to be. Human beings aren’t meant to just flounder with no purpose or contribution. Make sure your retirement plan includes the most important aspect of all: your own joy.
A Final Thought
Most retirement mistakes aren’t dramatic. They’re subtle. They compound quietly over time, just like good decisions do.
The good news is that every one of these mistakes is avoidable with planning, education, and a willingness to act before things feel “perfect.” Retirement planning isn’t about predicting the future—it’s about preparing for it thoughtfully. And the earlier you start, the more flexibility you give your future self.
Ryan Page, CFP®, MBA®
Office & Text:720-826-1092
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
This is a hypothetical example and is not representative of any specific situation. Your results will vary. The hypothetical rates of return used do not reflect the deduction of fees and charges inherent to investing.
