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Common Mistakes to Avoid with Retirement Money

Common Mistakes to Avoid with Retirement Money

| October 03, 2019
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After spending your entire professional career saving retirement money, the last thing you want is for a minor mistake to set your finances back and impact your retirement years. While you’ve been disciplined to build a solid foundation of retirement money, you can easily compromise your financial future if you’re not meticulous with your finances every step of the way.

Over the course of saving for retirement, there are many common mistakes you can make that could potentially derail your retirement plans. Along with investing poorly and paying costly fees, there are a host of decisions you need to start preparing for to help circumvent common retirement mistakes.

To help you avoid any potential retirement planning pitfalls, we’ve compiled six common mistakes to be aware of. 

Unnecessary Retirement Mistakes

The six most common mistakes to avoid with retirement money include:

  1. Making uninformed investment decisions – While new investment opportunities can often sound full-proof, it’s vital not to jump on the first investment that crosses your eye. Taking your time to research the investment will ensure you do your due diligence so you’re not investing into a Ponzi scheme or other fraudulent investments.
  2. Over investing in stocks – While stocks can offer significant returns, they also come with large amounts of risk. If you do decide to allocate some of your retirement money toward stock investments, make sure you can afford to lose any stock investment.
  3. Not Matching Your Employer’s Savings Plan – If your company is offering to match any of your savings contributions up to a certain percentage, they’re basically offering you free money. Many companies will also match your contributions to your 401(k) so make sure you are maximizing all your investment accounts with your employer.

With nearly 30 percent of people saying they wished that had better maximized employer plan benefits, according to the Insured Retirement Institute, now is the time to alter contributions to optimize your retirement money.

Source: Insured Retirement Institute


  1. Retiring and cashing out too early – While you may be satisfied with your retirement fund, one of the more common retirement mistakes is dipping into savings before you actually retire. With the average yearly income needed for retirement around $35,000 according to the Insured Retirement Institute, withdrawing can have drastic effects.

Source: Insured Retirement Institute


Electing to take Social Security benefits early can also hinder your retirement years. You can begin taking out Social Security at age 62, but it can reduce your monthly benefit by 30 percent. Taking out early withdrawals from your IRA can also subject you to additional income taxes.

  1. Putting too much into real estate – While it may be tempting to enter into real estate with a chance for big returns, you need to be strategic with your real estate investments. Putting a large amount of money into a nonliquid investment can be challenging and risky with many uncontrollable factors influencing the outcome.
  2. Failing to adjust finances before retirement – While the early years of your professional career can be used to take riskier investments with your finances, nearing retirement age is a time to adjust and conserve. Predicting how the market will act is difficult, but adjusting your stock allocation away from risker investments will help protect your account against sudden volatile swings.


Regardless of your financial situation, you worked hard to earn your retirement money and taking unnecessary gambles can severely hinder your retirement plans. To help formulate the best retirement strategy for your needs, speaking with a financial advisor can help you achieve your retirement goals.


Matt Logan is experienced with answering retirement planning questions and developing strategies for his clients. If you need help with common retirement-related questions and strategies that will fit your financial lifestyle, don’t hesitate to reach out to Matt Logan to see how he can help your retirement planning. Give a call today at 336-540-9700.

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