5 Mistakes That Can Hurt Your Chances For Retirement

Sadly, there are many out there who do not save enough money when preparing for retirement. In fact, according to Zacks Investment Research, 72% do not save enough for retirement each month. Also, according to a different survey done by Bankrate.com, 36% of people in the United States have absolutely NOTHING saved for retirement. These numbers are very alarming….

Michelle Schroeder-Gardner

Last Updated: May 25, 2023

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Check out this list of mistakes that can hurt your chances of retirement. This is a great list!Sadly, there are many out there who do not save enough money when preparing for retirement. In fact, according to Zacks Investment Research, 72% do not save enough for retirement each month.

Also, according to a different survey done by Bankrate.com, 36% of people in the United States have absolutely NOTHING saved for retirement.

These numbers are very alarming.

I believe that saving for retirement is possible, and it’s something more people should be working towards and succeeding at.

While many believe the economy ruins their chances for retirement, in reality most retirement preparation problems have to do with the specific beliefs people have towards retirement.

There are many reasons for why a person might be horrible at saving for retirement. By looking at the various reasons for why preparing for retirement doesn’t seem to be working for someone, I feel that more people can be aware of and overcome their retirement preparation problems.

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Below are five different ways you may by hurting your chances for retirement. Continue reading if you are interested in preparing for retirement but want to avoid common mistakes!


1. You skip saving for retirement altogether.

Many people skip out on saving for retirement for many reasons. These include:

  • Believing you don’t have enough money to save for retirement.
  • Thinking that you’re too young to care about retirement or that it’s too late to start.
  • Relying too much on pensions and social security.

No matter how young or how old you are, you should be saving and preparing for retirement. You never know when you will need it, and I am all for a person being in charge of their own retirement plan instead of relying too much on other sources of retirement (such as relying on social security 100%).

The fact that 36% of people in the U.S. save nothing for retirement year after year is a scary number. These people will all have to retire one day and I’m not sure what they will do when the time comes.

Now is a better time than never.

Side note: I highly recommend that you check out Personal Capital if you are interested in gaining control of your financial situation. Personal Capital is very similar to Mint.com, but 100 times better. Personal Capital allows you to aggregate your financial accounts so that you can easily see your financial situation. You can connect accounts such as your mortgage, bank accounts, credit card accounts, investment accounts, retirement accounts, and more, and it is FREE.


2. You take on debt for others yet don’t put money towards retirement.

I talked about this topic in the post Should I Ruin My Retirement By Helping My Child Through College? There’s rarely a week that goes by where I don’t hear from a parent telling me their story about how they cannot afford to live any longer or that they know they will not be able to retire because they are paying for their child to go to college.

If this is your situation, I say STOP. Unless you are on track for retirement, I honestly think you need to seriously think about what is important. Your child will be fine without your monetary support if you cannot afford it. Try supporting them in other ways such as finding a job, helping them find scholarships, and more.

You can take out loans for college, but you cannot take out loans for retirement.


3. You think you’ll never have to retire, so you skip preparing for retirement entirely.

Recently, I read an article about someone who made hundreds of thousands of dollars a year, had a monthly budget of around $30,000 (yes, MONTHLY!), and yet hardly saved anything. This person said they didn’t really feel the need to save for retirement because they enjoyed their job so much.

Assuming you will love your job forever can be a huge mistake, as it’s hard to judge what you will love decades down the line.

Also, you never know if something will come up in the future that will completely prevent you from working, such as a medical issue or some sort of major life change.


4. You misjudge how much money you’ll spend in retirement, which can greatly impact preparing for retirement.

Many people just assume they will spend less money in retirement, but that is not always the case. Medical expenses may come up, you might decide to travel more, and in truth, usually retirement spending is not too different than spending from before you retire.

You might find some ways to save money, but you are still going to spend money on housing (even if you pay off your home completely, you will still need to pay property taxes, utility bills, etc.), food, clothing, entertainment, and so on.

Some make plans to become super frugal after they enter retirement, but life doesn’t always work out so perfectly. If you want to eventually be frugal, just start now!


5. You use your retirement funds for expenses other than retirement.

I’ve heard of far too many stories where a person has taken money out of their retirement funds in order to pay for a vacation, a timeshare, pay off low interest debt, and more. When preparing for retirement, this is a HUGE mistake.

While I don’t know everything about taking money out of retirement funds, I do know that this can usually hurt you more in the long run. Taking funds out of a retirement account can usually lead to large penalties and paying extra towards taxes.

You should always just use your retirement funds purely for retirement.

Do you think you will have enough money to retire and how are you preparing for retirement? What age do you expect to retire? What crazy retirement mistakes have you heard of?

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Michelle Schroeder-Gardner

Author: Michelle Schroeder-Gardner

Hey! I’m Michelle Schroeder-Gardner and I am the founder of Making Sense of Cents. I’m passionate about all things personal finance, side hustles, making extra money, and online businesses. I have been featured in major publications such as Forbes, CNBC, Time, and Business Insider. Learn more here.

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  1. Here in the UK we also have a similar issue with people not saving (enough) towards retirement. The government has just started a new policy which automatically means everyone working will be enrolled into a pension scheme which their employer must contribute towards. It means everyone should at least be saving something.. however the amounts set are pretty low and I fear too many people will think that saving 4% of their salary is going to be enough for a comfortable retirement.

    Too many people have a nasty shock coming to them when they retire.

    1. Yes, I too believe that too many people believe 4% is enough. It’s not!

  2. Petrish @ Debt Free Martini

    There is a nasty myth that if you don’t have a couple of hundred dollars to put aside into your retirement fund that it is a waste of time to save. This is so far from the truth and people should put aside what they have regardless of how much they have. Have a little on the side saved is so much better than having nothing on the side. Just saying…

  3. The biggest mistake I see people making is not taking advantage of “time” and getting started early. Starting your retirement savings in your 20’s rather than your 30’s can make the difference between a six figure or seven figure nest egg by the time you’re ready to call it quits. Get interested and take advantage of your opportunity to capitalize on your youth!

    1. Yes, saving earlier in life can mean a huge difference!

  4. I think consistency is key. You just can’t throw some money here and there at retirement. It has to/should be done routinely, as in every month. We put some aside out of every paycheck and plan to do so for the next 25 years.

  5. Robin @The Thrifty Peach

    I pretty much try to assume social security won’t be there when our generation is ready to retire. Regardless, I’d rather be over prepared for retirement than under prepared.

    1. Yes,I too would rather by over prepared.

  6. In that case, save extra 🙂

  7. It’s certainly alarming just how many people forgo saving for retirement altogether. I think sometimes people who read/write for personal finance blogs have trouble comprehending the thought process. In all honesty most people are ill informed about what they need to do to properly save for retirement.

    1. Yes, many people are definitely ill informed when it comes to retirement. It’s sad. They should require it in high school.

  8. We will definitely be able to retire as long as we stick with our plan. We save a ton of money in our retirement accounts and we are debt-free. We just need to stay the course.

  9. A huge mistake that I made initially was in thinking of retirement as simply retirement and not financial freedom. I assumed that I would have to work until I was 70, so that was part of my mindset. Once I shifted my mindset to financial freedom over retirement, it made saving and planning even more compelling because financial freedom does not have to be as far away as retirement, especially if I commit to it.

    1. Yes, that is definitely a great way to motivate yourself to save.

  10. nicole dziedzic

    These are some awesome tips, and great post to give those who need a boost to stop slacking on saving for retirement, like myself. Great pointers to really think about here, and I leaned.

  11. Saving for retirement is so important and I wish more people understood that. So I will glady share this post and tell everyone I know, because those numbers you mentioned are so shocking. I’ve had many people tell me I’m too young to worry about retirement and I think that’s just a load of crap. No one is invincible and it’s foolish to not prepare for your future and save.

    1. Yes, too many people think that being young means you can skip saving for retirement. That is a disaster!

  12. I think the worst mistake is not contributing to a 401K program that has an employer match. You’re throwing away free money if you don’t contribute! But even if you don’t have a match, or are self-employer, you should still be contributing to a retirement savings vehicle. And, like you said, don’t use that money for anything other than actual retirement!

    We’re in good shape for retirement since we started saving in our early 20s, which is something I wish everyone did!

    1. Good job on starting young!

  13. I wish all my previous employers had provided a 401K program. I’m glad I can take advantage of it now!

  14. Elroy

    I do believe most people will end up spending less in retirement. We plan to. We’ll have our home paid off, I’ll have more time to mow the lawn and do maintenance on our house, no “office clothes,” less driving, less eating out, kids are gone, etc.

    Sure, you want to travel and add in some hobbies, but the general direction is you’ll spend less in retirement than your working years.

    1. While it is possible to spend less in retirement, I think most people over estimate the amount of savings.

  15. Bridget


    I’m really glad I got on the retirement-saving bandwagon early in my 20’s. As a result, I’m entering my 30’s with tens of thousands of dollars saved. It’s HUGE — and I was one of those people that didn’t think I needed to save anything (because of all the reasons you listed above!) I just did it because PF blogs told me to 😉

    God bless the PF community because I’m set up to be a rich old lady now =p hahaha

  16. Melane @ Good Job Mom

    Great post! Having helped our two kids thru college, I totally agree, don’t use your retirement money for their education! We made a plan to cash flow college, it wasn’t easy and we did expect our children to pay for half of their tuition costs. As a result both of our college grads are debt free. Hard work pays off!

  17. Linda Moffitt

    We have started but more then likely will have no where near enough to live comfortably Thanks for sharing the articles I will have to go read them

  18. Rust

    I’m definitely behind. I appreciate your very informative articles.

  19. I saw many of my elderly family members make these mistakes, and it’s been so sad to watch them struggle through their retirement years with next to nothing. I think another common retirement mistake is that people don’t realize that often times their retirement plans change throughout the years. We always thought that Rick would work till 60 and then retire. Well, he wants out at 50 now as opposed to 60, so we are working on ways to make that happen, but it would’ve been much easier had we planned for a changing plan.

    1. Yes, too many people do not realize that things can change. Good luck Laurie! I’m sure your family will do well.

  20. Amy

    We fell behind a bit when I stopped working full-time, and therefore lost any sort of employer match. I do have Roth IRAs, though, which helps. Also, paying off our debt is more of a priority now, since we don’t want to have to use retirement savings for that later. But it’s important to find the right balance, so we don’t lose the advantage of compounding.

    I think a mistake that people make is assuming they’ll need less money when they’re retired. The chances of needing pricey prescription medications, long-term care, and home modifications increase dramatically after retirement. There may be a period od lower costs, but the longer we live, the more we need to shell out for healthcare.

    1. Yes, exactly! I’m not sure why people think they will start saving hoards of money once they reach retirement.

  21. It’s amazing how many people save nothing at all for retirement. I hear so many saying they will never retire so they don’t bother saving. That is fascinating because there are so many ways you can be FORCED into retirement but no one ever thinks about those. I’m definitely glad I started saving in my twenties and already have a little start.

    1. Good job on starting!

  22. For years I really didn’t save anything towards retirement. I recently opened up an online account that is specifically for retirement.

  23. Sandy Klocinski

    These days, many employers are automatically enrolling workers into the company 401(k) plan. While that has helped boost participation rates, it has also given some employees a false sense that they are saving enough.

  24. Dina Eighties

    interesting post

  25. Thankfully, my hubby is all over the retirement stuff and has made sure we will be prepared with a few different income streams. I’m so happy he was into it when we were young and I didn’t care so much. So far, we haven’t had to touch our retirement accounts and hopefully won’t have to. College for the kids is a whole different story.

  26. Great points here! I find the main challenge to be the fine line between enjoying life now AND planning for retirement. My father, who saved a lot, died before he could even enjoy retirement. On the other hand, I plan to live a very long life, and that will require money… 🙂

    1. Yes, the same thing happened to my father. A healthy balance is important.

  27. Pamela Gurganus

    This post came at the perfect time! My husband and I were just talking yesterday about re-evaluating our retirement plans. Thanks for the information!

    1. Welcome Pamela 🙂

  28. Barrie

    We’ve been saving for retirement for many years. We have a retirement advisor and are right along schedule.

  29. I am saving for my son’s college, but I’m also on track for retirement. I see it as why not help him and myself. You can do both if you know how to save and budget. It also doesn’t hurt that I hustle my ass off to earn extra income outside my job!

    1. Yes, I see no problem with doing that as long as you are on track with your own finances. So many parents are not and decide to help their children anyways. The emails I receive on this subject from readers/parents make me very sad!

  30. I know many people who don’t save for retirement at all thinking that they’re still young and have time. But time flies and compounding works wonders so it works best when you start saving early. Also, many people will claim they can’t afford to save, yet somehow have the money to buy the latest and greatest tech gadget or new car, etc.

    1. Yes, I agree Andrew!

  31. Rust

    I shared this very informative and helpful article. Thanks!

  32. The rates are alarming and across generations. A positive light I see is that millennials are starting to save for retirement earlier than previous generations. Millennials on average at age 22 while other generations started at 35 yo.

    1. Wow that’s great to hear! That’s a huge difference.

  33. I hope you can start soon Catherine 🙂

  34. AnnieG

    It’s not only “free money”, it’s calculated into your pay rate. In other words, not taking advantage of the match is the same as declaring “I don’t want my whole salary! “

  35. Great post. My husband and I are looking to start saving for retirement but I literally have no idea where to start… They don’t teach you this stuff in school. Do you have a post that addresses the basic how-to’s of retirement savings? I need Retirement Savings for Dummies. 🙂

    1. Thanks so much! I will read through these.

  36. Brandon Roberts

    Thanks a ton for talking about this Michelle! Both of my parents are planning their retirement right now, and they really make sure that they do it right. And now that I looked through this site, it got me worried about they might be doing some of these things. I’ll have to talk to them about this right away. Glad I was able to find this website.

  37. Retirement is something we’ve been working on and planning for recently. During my 20’s, I didn’t think too much about it. But now, I feel the pressure is really on. We both have a decent percentage withheld from our paychecks, and I have an additional amount put into a Roth IRA since my salary is pretty low. Thank you for this post on retirement! What % of your salary do you recommend saving for retirement?

    1. As much as you can! 🙂 There’s no right or wrong answer. I think what the news will tell you is that 5% to 10% is enough, I say save at least 20%. If you can save 40-50%, even better 🙂