When most people dream about retirement, they picture spending time with family, traveling, or finally doing the hobbies they love. But even the best retirement plan can run into problems if you are not prepared.¹
The good news is that many of the biggest retirement roadblocks can be avoided with good planning. Here are five common challenges that can hurt your retirement, and what you can do about them.
1) Claiming Social Security at the Wrong Time¹²
Many people claim Social Security as soon as they can at age 62.¹ While that may be the right choice for some people, it can also mean getting a smaller monthly benefit for the rest of your life.¹
If you wait until your Full Retirement Age, you can receive your full benefit.¹ If you wait even longer, up to age 70, your benefit grows by about 8% each year because of delayed retirement credits.¹
There is no “best age” for everyone.² The right choice depends on your health, your savings, whether you plan to keep working, and whether you are married.² A married couple may be able to increase lifetime benefits by carefully planning when each spouse claims.²
Before claiming Social Security, look at how your decision may affect your income for the rest of your retirement.¹²
2) Not Having a Plan for an Elder Care Event³⁴
Many people expect retirement to be about vacations and family time. Few plan for the possibility that they—or a spouse—may someday need long-term care.³
Long-term care can include help with everyday activities like bathing, dressing, eating, or moving around the house.³ Care may happen at home, in an assisted living community, or in a nursing home.³
The cost can be very high, and Medicare generally does not pay for most long-term custodial care.³ Without a plan, retirees may have to spend down their savings much faster than expected.³
Planning ahead may include:
- Building extra savings.
- Considering long-term care insurance if appropriate.
- Creating legal documents such as powers of attorney and health care directives.
- Talking with family members about care preferences.⁴
A health event can quickly become a financial event if you do not prepare for it.³⁴
3) Putting Too Much of Your Money in One Type of Investment⁵⁶
It can feel comfortable to keep investing in what has done well recently. Some people own mostly stocks. Others keep nearly everything in cash. Still others have too much invested in one company or one part of the market.⁵
The problem is that no investment performs well all the time. Markets go through good years and bad years.⁵
A balanced portfolio spreads money across different types of investments, such as stocks, bonds, and cash.⁵ Diversification cannot guarantee profits or prevent losses, but it may help reduce risk over time.⁵
As retirement gets closer, it is also important to review your investment mix regularly. A portfolio that was appropriate at age 40 may carry too much risk at age 65.⁶
Don’t let one investment or one asset class determine the success of your retirement.⁵⁶
4) Underestimating How Much Retirement Will Cost⁷⁸
Many retirees spend less on commuting and work clothes, but they often spend more on health care, travel, hobbies, and home repairs.⁷
Inflation also makes everyday expenses more expensive over time.⁸ Even if prices only rise a little each year, the cost of groceries, utilities, and medical care can become much higher over a 20- or 30-year retirement.⁸
Creating a retirement income plan—and updating it regularly—can help you prepare for changing expenses throughout retirement.⁷
Retirement is not just about saving enough money. It is also about planning how you will spend it over many years.⁷⁸
5) Not Reviewing Your Retirement Plan Regularly⁶⁹
Life changes. Markets change. Tax laws change. Your retirement plan should change too.⁹
Many people build a retirement plan and then leave it alone for years. During that time, investments can drift away from their target allocation, spending may increase, or new tax planning opportunities may appear.⁶
Meeting with your financial professional each year gives you the chance to:
- Review your investment allocation.
- Update your retirement income plan.
- Discuss tax-saving opportunities.
- Check your beneficiary designations.
- Make sure your estate documents are still current.⁹
Small adjustments made over time are often much easier than trying to fix a large problem later.
The Bottom Line
Retirement planning is about more than growing your savings. It is also about avoiding mistakes that could reduce the income you’ve worked so hard to build.¹
By making smart Social Security decisions, preparing for possible long-term care needs, keeping a diversified portfolio, planning for future expenses, and reviewing your plan regularly, you can improve your chances of enjoying the retirement you have imagined.¹⁻⁹
Schedule time with a Millstone advisor to review how your plan can manage these common roadblocks in your personal journey through retirement. Visit www.millstonefinancial/net/contact-us/ to get your complimentary consultation today.
Sources:
- ¹ Social Security Administration. Retirement Benefits (SSA Publication No. 05-10035) and Retirement Planner: Delayed Retirement Credits. https://www.ssa.gov/retirement
- ² Social Security Administration. When to Start Receiving Retirement Benefits and Retirement Planner. https://www.ssa.gov/benefits/retirement
- ³ U.S. Department of Health and Human Services, Administration for Community Living. What Is Long-Term Care? and How Much Care Will You Need? https://acl.gov/ltc
- ⁴ National Institute on Aging. Advance Care Planning: Health Care Directives and Getting Your Affairs in Order. https://www.nia.nih.gov/health
- ⁵ U.S. Securities and Exchange Commission (SEC). Asset Allocation, Diversification, and Rebalancing. https://www.investor.gov
- ⁶ FINRA Investor Education Foundation. Diversification and Portfolio Rebalancing. https://www.finra.org/investors
- ⁷ Employee Benefit Research Institute (EBRI). 2025 Retirement Confidence Survey. https://www.ebri.org
- ⁸ U.S. Bureau of Labor Statistics. Consumer Price Index (CPI). https://www.bls.gov/cpi
- ⁹ CFP Board. Financial Planning Practice Standards and retirement planning guidance. https://www.cfp.net
Disclosure:
Advisory services are offered through Millstone Financial Group Limited Liability Company, a Securities and Exchange Commission Registered Investment Advisor located in the State of New Jersey. Insurance products and services are offered through Millstone Financial Group Limited Liability Company. Millstone Financial Group is not affiliated with or endorsed by the Social Security Administration or any other government agency.
All material discussed is for informational purposes only. Opinions expressed are solely those of Millstone Financial Group Limited Liability Company and staff. All topics covered are believed to be from reliable sources; however, Millstone Financial Group Limited Liability Company makes no representations as to its accuracy or completeness. Investing involves risk including the loss of principal.
This information shall in no way be construed as a solicitation to sell securities or investment advisory services to residents of any state other than New Jersey, or where otherwise permitted. All information and ideas should be discussed in detail with your individual adviser prior to implementation.
Millstone Financial Group Limited Liability Company dba Millstone Financial Group does not offer tax planning or legal services but may provide references to tax services or legal providers. This material is intended to provide general financial education and is not written or intended as tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel. Millstone Financial Group may also work with your attorney or independent tax or legal counsel. Please consult a qualified professional for assistance with these matters. You should always consult with a qualified professional before making any tax or legal decisions.
