I Help People Retire Every Day — Here’s the Most Common Retirement Mistake People Make

Maybe you were an old soul — or just a smart one — and you started saving for retirement as soon as you entered the workforce, whether you were making the coffee or picking it up for your boss. Or maybe, after years of grinding it out, you’ve gotten wise to the fact that someday, you’ll want a financially secure life in your golden years. So, you learn everything you can about saving for retirement, because you’re committed to doing things the right way.

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Spoiler alert: You won’t get everything right. Nobody does. That’s why experts like Steven Chen, financial coach and CEO of Call To Leap, are here to help. Chen’s passion for guiding others toward financial independence has helped thousands of people just like you build emergency savings, eliminate high-interest debt and invest strategically — all essential parts of a secure retirement.

Chen has encountered his fair share of people making avoidable mistakes when preparing for retirement, and he spoke with GOBankingRates for our Top 100 Money Experts series. He shared the biggest misstep he sees: not having a clear plan for saving and withdrawing money. Plenty of people skip this crucial step, and it can create unnecessary stress and financial shortfalls down the road. Fortunately, with some care and thoughtfulness, it’s easy to sidestep this common mistake.

If you were driving somewhere new for the first time, you’d want a map, right? A plan to get where you want to go — and if it happened to come with the location of every cool diner on the road, even better. Since retirement is one of the most important “destinations” of your life, it makes sense that you’d want a plan for getting there.

But Chen says many people don’t have those plans in place for retirement.

“Instead of mapping out spending, taxes, and healthcare costs, they rely on hope — and that can drain savings fast,” he said.

You don’t have to go it alone in building a plan. A financial advisor can help you create both short- and long-term savings plans tailored to your income, lifestyle, and goals. Crucially, preparing for retirement involves so much more than just contributing to a 401(k) through your employer — though that is a strong start. (And yes, if your employer offers matching contributions, don’t leave that money on the table.)

You’ll also want to explore a mix of traditional and Roth IRAs, along with other tax-advantaged accounts and investment strategies.

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“Making your retirement savings last starts with shifting your mindset from just saving to strategically spending and investing,” Chen said.

He teaches the people he works with to use a “bucket strategy” that divides your retirement savings into three timelines:

Short-term (0-2 years): Keep this money in a high-yield savings account for predictable expenses.

Medium-term (3-10 years): Invest in conservative vehicles like bond ETFs or dividend-paying funds.

Long-term (10+ years): Keep a portion of your portfolio in stock ETFs to maintain growth potential.

Chen says a big part of having a solid retirement plan includes mapping out how you’ll withdraw your money — not just trying to save as much as you can. People often put so much effort into saving that they forget to plan a withdrawal strategy.

Others lock into a plan so rigid that they can’t adjust when life circumstances inevitably change. While Chen encourages people to start with the 4% rule — as in, withdrawing 4% of your savings during your first year of retirement, then adjusting for inflation — he notes that it shouldn’t be treated as gospel.

“Many people stick to the 4% rule but overlook strategies like coordinating withdrawals from taxable, traditional and Roth accounts to reduce taxes,” he said. “Using a flexible approach instead of a fixed rule can help savings last much longer.”

The prospect of living without a regular paycheck can be daunting, especially if you’ve been working since you were young. And while visions of cocktails on the beach are common, retirement can also bring anxiety and uncertainty.

Sometimes that fear can compel people to become overly conservative with their money, hoarding cash or refusing to invest entirely. They can live so far below their means that retirement loses its joy.

But Chen wants you to know that, as with anything else in life, approaching retirement savings with a balanced perspective can make all the difference.

“Retirees don’t have to choose between growth and safety,” he said. “It’s about finding the right balance. With a smart mix of low-risk income sources, growth investments and a cash buffer, savings can stay protected while still growing over time.”

In other words, being too cautious can be just as risky as being reckless — especially in a retirement that could last 20 to 30 years or more.

When it comes to retirement, not having a solid financial plan in place is the No. 1 mistake people make. But if you take the time to create a smart and flexible savings and withdrawal strategy that’s guided by expert advice and not fear, you’ll be much better positioned to enjoy a long, fulfilling, and financially secure retirement.

This article is part of GOBankingRates’ Top 100 Money Experts series, where we spotlight expert answers to the biggest financial questions Americans are asking. Have a question of your own? Share it on our hub — and you’ll be entered for a chance to win $500.

I Help People Retire Every Day — Here’s the Most Common Retirement Mistake People Make

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