Will You Be the Next Greeter at a Famous Big-Box Store?

27% of retirees are either working or seeking work in retirement.

Gone are the days of retiring at 62 with visions of endless travel and relaxation. Today, the reality for many is different. According to a T. Rowe Price Retirement Study, 20% of Americans work in retirement, and another 7% are actively seeking employment. For those who’ve already retired, it may feel too late—but it’s not. Here are 7 key retirement mistakes to avoid so you can enjoy a work-free retirement:

1. Not Saving Enough
2. Withdrawing Money Too Early
3. Investing Too Conservatively
4. Overspending in Retirement
5. Not Delaying Social Security
6. Underestimating Healthcare Costs
7. Not Having a Financial Plan

Many retirees could have avoided these common pitfalls with a bit of planning. Let's dive into each and see how to make retirement more secure and enjoyable.

Not Saving Enough

Most pre-retirees only save what their employer matches. While many employers match up to 5%, financial experts generally recommend saving 10–15% of income for retirement. Your savings should ideally provide enough income to cover your expenses comfortably in retirement.

Withdrawing Money Too Early

Once you start withdrawing from retirement savings early, it can be challenging to stop. Early withdrawals can disrupt compound growth, reducing your future nest egg. Before tapping into your retirement accounts, assess if there are alternative solutions for your current needs.

Investing Too Conservatively

Fear often drives overly conservative investment choices, such as keeping savings in CDs or government bonds like the G Fund. While these might seem safe, they often lag behind inflation, eroding purchasing power over time. A balanced approach with the guidance of a financial advisor can help mitigate these risks.

Overspending in Retirement

After years of hard work, it’s natural to want to celebrate in retirement. However, it’s essential to strike a balance. Budgeting can help ensure you enjoy retirement without jeopardizing your financial future.

Not Delaying Social Security

Deciding when to start Social Security is crucial and should be tailored to your financial picture. Each year you delay increases your benefit by approximately 7%, potentially providing greater security over time. A financial planner can help you determine the best age to start Social Security for your unique situation.

Underestimating Healthcare Costs

Healthcare expenses, including long-term care, are often underestimated. In 2023, the average retiree spent about $6,874 annually on medical expenses. Planning for these costs can protect your budget and help you avoid tough decisions in retirement.

Not Having a Financial Plan

A financial plan is essential. Without it, you risk compromising your lifestyle and security in retirement. While having a plan doesn’t guarantee success, it addresses critical retirement risks and provides a roadmap for your financial future. If you haven’t started yet, now is the time.

Sources

- [Bankrate Retirement Savings Survey](https://www.bankrate.com/retirement/retirement-savings-survey/)

- [USA Facts on Retirement Savings](https://usafacts.org/data-projects/retirement-savings)

- [T. Rowe Price Study on "Unretiring"](https://www.troweprice.com/personal-investing/resources/insights/unretiring-why-recent-retirees-want-to-go-back-to-work.html)

- [KFF on Healthcare Costs](https://www.kff.org/medicare/issue-brief/how-many-older-adults-live-in-poverty/)

- [Historical CD Rates - Forbes](https://www.forbes.com/advisor/banking/cds/historical-cd-rates/)