Mistakes That Could Derail Your Retirement

By Riley Crosswell

Retirement planning is a trip—and like any trip, there are potholes in the road. Regardless of your age—20s, 30s, or 40s—there are cash missteps that will ruin even the best of plans. The good news: Most of them can be skipped if you know what to look out for.

This is Part 5 in our series of decade-by-decade saving and investing. If you have missed previous posts, start with Part 1 (Why Retirement Planning Can't Wait) and work forward through to Part 4 (Saving and Investing in Your 40s – Catch Up and Course Correct).

Retirement planning is full of pitfalls — but avoiding them starts with the right knowledge and tools. My book AI Wealth Strategies: Smart Paths to Prosperity in the Age of Artificial Intelligence explores how AI can help you make smarter financial decisions. Check it out here.

Mistake #1: Waiting Too Long to Begin

The largest wealth killer isn’t poor investments — it’s procrastination.

• In your 20s: Waiting until you “earn more” typically costs you the most powerful compounding years.
• In your 30s: Postponing family or housing expenses savings can feel rational, but it adds up to more pressure down the road.
• In your 40s: Starts are late, and catch-up is usually with behemoth contributions you may have skipped along the way.

Fix it: Start where you are. Each $25 a week makes a difference more than nothing.

Mistake #2: Ignoring Employer Matches

If your employer offers a 401(k) match and you’re not taking it, you’re leaving free money on the table.

• Skipping the match is like turning down an instant, risk-free return.
• Even if budgets are tight, contribute at least enough to get the full match.

Fix it: Treat the match as non-negotiable — it’s part of your paycheck.

Mistake #3: Cashing Out Retirement Accounts Too Early

Job change? Financial crisis? Too many people cash out their 401(k) or IRA, intending to “replace it later.” Most don’t.

• Early withdrawals tax and penalize you.
• Worse damage: you lose decades of possible growth.

Fix it: Roll old accounts into a new 401(k) or IRA rather than cashing out. Use emergency money — not retirement money — for emergencies.

Mistake #4: Not Adjusting Your Approach Over Time

What worked at age 22 won’t work at age 42.

• In your 20s: You can ride aggressive growth investments.
• In your 30s: Grow and diversify.
• In your 40s: Start gradually trending toward stability but still growing.

Fix it: Rebalance your portfolio at least annually.

Mistake #5: Underestimating Healthcare and Inflation

Two stealth retirement assassins:

• Healthcare expenses: A couple retiring today can expect to need hundreds of thousands just for medical bills.
• Inflation: Prices double about every 20–25 years.

Fix it: Put both in your retirement plan. Consider HSAs, and keep investments that grow more quickly than inflation.

Whether it’s underestimating healthcare costs or delaying investments, AI-powered insights can help you spot mistakes early and adjust. I break down practical strategies in AI Wealth Strategies, available here.

Mistake #6: Saving for Kids’ College Before Your Retirement

This one’s hard to swallow for parents. But here is the truth:

• Your kids can use scholarships, grants, or loans.
• You can’t borrow for retirement.

Fix it: Save for your retirement first. If you do both, great — but don’t delay your own security.

Mistake #7: Thinking “Later” Will Be Easier

Life doesn’t become cheaper with time.

• During your 20s, it's student loans.
• During your 30s, it's mortgages and day care.
• During your 40s, it's doctor bills, college tuition, and elderly parents.

Fix it: Don’t wait for an ideal moment — it never arrives. Develop the habit now.

Quick “Avoid These” Checklist

❌ Waiting too long to begin

❌ Missing employer matches

❌ Withdrawing accounts prematurely

❌ Sticking to one way of doing things

❌ Forgetting health & inflation

❌ Placing children’s college over your retirement

❌ Believing “Later” being easier

✅ Instead: Begin early, be consistent, and adapt when life does.

Final Thoughts

Planning for retirement is not perfect — it’s preventing the blunders that cost you the most. You don’t necessarily have to max every account, but you must stay consistent and monitor your progress.

Tune in next time for Part 6: Final Wrap-Up — It’s Never Too Early (or Too Late), where we’ll bring it all together into a handy 3-step plan you can act on today, regardless of your age.

Retirement security comes from avoiding common errors and embracing smarter approaches. AI Wealth Strategies shows how technology can keep you on track at every stage. Grab your copy here.