Top 10 Retirement Planning Mistakes
When planning financially for the future, what are the most common retirement planning mistakes people make?
This chart uses data from the 2022 Natixis Global Survey, which polled 2,700 financial professionals across 16 countries between March and April 2022.
Most Common Retirement Mistakes
According to professionals, the most common retirement planning mistakes are time-related, like outliving savings or not understanding how inflation can affect a portfolio over time.
The number one mistake? According to 49% of financial planners, it’s underestimating the sizable impact inflation has on the value of retirement savings.
| Rank | Most Common Mistakes | Share |
|---|---|---|
| 1 | Underestimating the impact of inflation | 49% |
| 2 | Underestimating how long you will live | 46% |
| 3 | Overestimating investment income | 42% |
| 4 | Investing too conservatively | 41% |
| 5 | Setting unrealistic return expectations | 40% |
| 6 | Forgetting healthcare costs | 39% |
| 7 | Failing to understand income sources | 35% |
| 8 | Relying too heavily on public benefits | 33% |
| 9 | Underestimating real estate costs | 23% |
| 10 | Investing too aggressively | 21% |
Meanwhile, 46% of advisors see the underestimating of life spans as the second-most-common retirement mistake. The longer you live, the more retirement savings you’ll need to supplant income. And that’s not including the healthcare costs associated with aging, which 39% of advisors point out as another common retirement planning mistake.
Most of the other top retirement mistakes revolve around investment planning, including overestimating investment income (42%), investing too conservatively (41%), and setting unrealistic return expectations (40%).
On the flip side, 21% of retirees invest too aggressively according to financial professionals. While investing aggressively can be extremely beneficial especially in one’s earlier years, it can cause big problems later in life. That’s because later on, retirees need liquidity and must have access to their savings to cover life expenses. If a portfolio is volatile or not diversified, it may be hard to make up any short-term or sudden losses.
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