5 Retirement Planning Mistakes That Cost You Thousands
Avoid these costly retirement planning mistakes. We share the errors we see most often and how to fix them.
After more than 25 years of helping Kansas City families prepare for retirement, we have seen patterns. Certain mistakes show up again and again, often costing tens of thousands of dollars in unnecessary taxes, lost growth, or depleted savings.
Here are the five most common retirement planning mistakes we see and how to avoid them.
Mistake #1: Not Having a Tax Efficient Withdrawal Strategy
Many retirees simply withdraw from whichever account is most convenient. But the order and timing of withdrawals can have a massive impact on your lifetime tax bill.
The fix: Work with an advisor who integrates tax planning into every withdrawal decision. At Windward, our CPA heritage means tax is not an afterthought. It is central to everything we do.
Mistake #2: Claiming Social Security Too Early
Taking Social Security at 62 can reduce your lifetime benefits by 25 to 30 percent compared to waiting until 70. For many people, those extra years of delayed benefits are worth far more than the early payments.
The fix: Model multiple scenarios. Factor in your health, other income sources, and whether you are married. Sometimes early claiming makes sense, but it should be a deliberate choice, not a default.
Mistake #3: Underestimating Healthcare Costs
A 65-year-old couple retiring today can expect to spend over $315,000 on healthcare in retirement, according to Fidelity. And that does not include long-term care.
The fix: Build healthcare costs explicitly into your retirement plan. Consider the premiums for coverage from ages 60 to 65, Medicare premiums, supplemental coverage, and potential long-term care needs.
Mistake #4: Investing Too Conservatively or Too Aggressively
Both extremes can potentially cause problems. Too conservative, and inflation can erode your purchasing power. Too aggressive, and a market downturn early in retirement can devastate your portfolio through sequence of returns risk.
The fix: Find the right balance for YOUR situation. At Windward, we believe in preserving wealth while seeking smart, long-term growth. A forward looking yet conservative approach that balances opportunity with discipline.
Mistake #5: Going It Alone
Retirement planning involves tax strategy, investment management, insurance decisions, estate planning, Social Security optimization, and ongoing adjustments. These pieces interact in complex ways.
The fix: Work with a team that integrates all these areas. At Windward, each client works with a team of dedicated advisors, supported by tax professionals, investment analysts, and service specialists.
The Bottom Line
Retirement planning is not about hitting a magic number. It is about building a comprehensive plan that addresses taxes, income, healthcare, investments, and legacy; and adjusting that plan as life unfolds.
Want to make sure you are not making these mistakes? Schedule a Discovery Meeting with our team
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This content is provided by Windward Private Wealth Management Inc. (“Windward” or the “Firm”) for informational purposes only. Investing involves the risk of loss and investors should be prepared to bear potential losses. No portion of this blog is to be construed as a solicitation to buy or sell a security or the provision of personalized investment, tax or legal advice. Certain information contained in the individual blog posts will be derived from sources that Windward believes to be reliable; however, the Firm does not guarantee the accuracy or timeliness of such information and assumes no liability for any resulting damages.
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