5 Common Retirement Planning Mistakes [Video]

Wondering what your retirement plan is missing? In this video, we share five common retirement planning mistakes that we see as financial advisors, and how we help clients avoid them!

Video Transcript

When it comes to retirement planning, do you find yourself up at night wondering if you’re doing everything right?

Hi, my name is Michelle and I’m a financial advisor here at Financial Design Studio. We help business professionals retire in a tax-efficient way. So if retirement is getting close for you, we have a free retirement planning guide that you can download, which is linked below.

You’ve probably realized that a successful retirement isn’t just about the numbers. It’s about peace of mind. So in this video, I want to share the risks we see to retirement plans that you may not know to plan for.

1. Longevity

First, is longevity. No one knows how long they’re going to live. But something you want to plan for is a long term of life. Maybe you’re going to live a lot longer than you thought you would. Or also, maybe you’re going to live less time than you planned. And maybe not you and your spouse, but maybe just one of you passes away sooner than expected. These are two things that you want to plan for.

For example, to make sure that you’re not outliving your money, you could run your planning scenarios out to age 100. This helps you make sure that your assets will last if you live that long.

Another way is, you could run your plan with one of you passing away before the other. So maybe one of you passing away at age 75 or 80, and the other living longer. What you’re really checking for is to see the tax implications of the brackets of a single individual versus a married filing jointly.

So if someone passes away much before the other person now if you have a lot of retirement assets that can put you in the single the individual filing tax bracket and that could really increase your taxes more than you planned.

2. Healthcare

Next, let’s talk about healthcare. So while you’re working, you get insurance through your employer. But in retirement, healthcare costs can be higher. Now you’re paying for Medicare, maybe a supplemental policy, prescription, things like this.

Part of this is long-term care planning. And so what we’re talking about here is when you’re no longer able to live in your home or you are living in your home and you need additional care. So this is either in-home or out-of-home (maybe in a facility).

Either way, you need care beyond what a family member can give you. Sometimes this can last maybe up to five years. So this can be a really large expense. For example, that could be 80,000, $100,000 per year for that long term care expense in that facility. Again, you need to run your plan with costs like this to make sure that your assets will last if you need them to.

You can learn more about long term care in our video here!

3. Inflation

Next let’s talk about inflation to cost of living. Now when you’re running your plan you want to be sure your putting in the expenses that you’ll have each month. But you also want to make sure that you’re adding in a cost for inflation. This is just the increase in price from year to year for normal goods that we buy, whether that’s gas, groceries, things like that. It’s common to use a 3% increase per year.

Now as you get closer to retirement, what I will see some people do, is they get nervous and they want to make sure that they have money in cash. They want to have liquid assets to pay for those expenses for that year the next year. But what can happen is people will say, “well let’s hold three years of cash.”

But if you planning projections assume that your assets are going to grow, let’s say, at 6% to 8% a year, it can’t do that as cash. And so you have to be really careful that you’re not holding too much in assets that are not growing at what you assumed in your plan.

4. Policy

So next let’s talk about policy changes. This could be at the federal level and it could also be at the state level. You always want to be paying attention to this, because every so many years there’s changes to our tax code. For example, the Secure Act, Secure Act 2.0, the big beautiful bill. There’s several different legislation changes that have happened just in the recent history that we can think through.

It’s super important that you’re paying attention to how that affects and impacts your plan that you had set in motion years ago. Rules you were depending on might not exist anymore.

5. Estate

And then finally, let’s talk through estate complexities. So this can be your estate or assets that you inherit.

If it’s your estate, you want to make sure is that your estate is in place. Your estate planning documents need to be in place so that your assets will go how you want them to go. These are your will, your trust, healthcare powers of attorney, property powers of attorney. You really want to make sure that there’s nothing left to chance because you didn’t put these documents in place.

Likewise, if you find yourself inheriting an estate or value from someone else, inheriting assets, you want to make sure that you’re retitling those as part of your plan. If not, you want to make sure you are passing those on because you don’t need the assets.

It’s really important that you update those pieces as they happen rather than just leaving them and saying, someday I’ll take care of that when I need to because no one really knows what tomorrow is gonna bring.

How Do You Avoid These Mistakes?

So finally, how do you address all of these risks all of the time? Here at Financial Design Studio, we really want to cover these four core areas all year, every year. And so that looks at your insurance, investments, taxes, and estate planning every year. So we’re making sure there’s nothing that’s being missed. So every year, everything’s getting reviewed because legislation changes. Like we mentioned, there’s a lot of pieces that can change frequently. Your life changes, people’s lives around you.

Your Next Steps

And if you want a team of financial advisors to support your retirement plan, this is what we do best. Our team specializes in tax efficient retirement planning for individuals with executive compensation. So you stay on track all year, every year, reach out to our team at to schedule a 30 minute consultation.

We’ll see you there or in the next video!

Bonus: Our Free Retirement Planning Guide!