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What Is the Biggest Retirement Planning Mistake?

April 20, 2017 • By

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Last Updated: April 20, 2017

Suze OrmanThat’s easy to answer: Not having a plan!

Building a financially secure retirement doesn’t happen by itself. You need to make a commitment to smart financial decisions long before retirement — starting in your 20s would have been ideal — and then keep carrying through on your retirement plan.

Here are some other big retirement-planning mistakes I want you to avoid:

  1. Not maximizing your Social Security retirement benefit. I strongly encourage you to wait until your Full Retirement Age (FRA) to start receiving your Social Security benefit. That’s between age 66 and age 67 depending on the year you were born. The payout will be 25 to 30 percent higher than what you are eligible for if you start at age 62, which is the earliest you can claim.  And ideally, if you are in good health and there is longevity in your family, I encourage you to devise a financial plan that allows you (or your spouse — whomever is the highest earner) to delay starting until age 70. Every year past your FRA through age 70 entitles you to a payout that will grow by a guaranteed eight percent. You can’t get eight percent guaranteed investing these days!
  2. Not saving on your own. Yes, Social Security will be an important source of income in retirement. But chances are it won’t cover all of your basic needs, to say nothing of a few wants. You don’t have a workplace retirement plan? Then, I want you to save up in a Roth IRA. If you are over 50 this year you can contribute $6,500. That’s $125 a week. Please take a hard look at all your spending and see if you can free up more money to build a strong retirement fund.
  3. Not accounting for medical costs in retirement. It’s so important to understand that Medicare doesn’t cover everything, and not many people have retirement health benefits from an old employer. On average, retirees end up needing to cover about 30 percent of their health care costs.
  4. Not Planning for a Very Long Life. There is a 50 percent chance a 65-year-old woman today will still be alive at age 88. And for a 65-year-old male there is a 50 percent chance he will still be alive at age 85. (Check out this free online life expectancy calculator.) Given the possibility of living a long time, you need to make sure your savings will last longer than you! One smart way to stretch your savings is to keep working in your 60s, even if it is part-time work. Delaying your Social Security start date, and reducing your withdrawal needs from IRAs and other accounts in your 60s will provide you more income for what I hope is a wonderful and long retirement.


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About the Author

Suze Orman, Personal Finance Expert

Suze Orman is an award-winning personal finance expert.


  1. Anne R.

    For those who find they can’t work full time, past age 62 as a result of a disability, illness or injury, but who would like to follow this advice to maximize benefits by waiting to retire at FRA, consider if you are eligible for disability retirement in the meantime! You might find you are eligible for disability retirement from age 62 and then be able to convert to age related retirement at your FRA.

    • Richard

      Would you try to “go it alone” regarding disability, or would you hire a lawyer? I assume you are an attorney.

  2. Ms. L.

    Hopefully we have all saved a little nest egg and have recovered somewhat from the financial crisis. Social Security was never intended to cover your every need, only to keep people out of poverty in their old age. At this point, all we can do is wait and see what the government is going to do. Pray that they will not wipe us all out.

    • Gene

      True ss was not meant to cover everything, but pensions used to help. When 401ks were introduced, and employers started to cut pensions, only those very disciplined with a very good income had a chance to save enough for a decent retirement. Just my opinion. Eveyone says, have kids, put them through college, etc., and then somehow at the end of the month, save a little for retirement.

  3. Vern

    I did some planning and calculations also. I did not start my Social Security until age 70, and I am getting 50% more than I would have at full retirement age. Everyone needs to figure out their own situation. Society would be a lot better off if they did more planning and figuring and lot less complaining. Do your homework, it’s hard but satisfying. Good luck!!!

    • Marc

      Well said. It’s not surprising we’re finding ourselves in this frightening situation today when you see people continuing to criticize and stubbornly deny the truth, even when the facts are placed before them.

  4. Janet B.

    I totally disagree with the advice to wait until age 70. I thought that, too, for a long time — until I did the math. I would have to live to age 78 before I “caught up” with waiting until age 70 to take my benefits. Each individual needs to do that calculation, taking into account specifically his/her health and financial situation. Social Security will help people calculate this number for those who cannot do this themselves. However, a blanket statement that people should wait until 70 is totally misleading.

    • John

      You are spot on. If you have to draw down your other resources so that you can wait to draw SS it might be a lot better to take your retirement at age 62. Doing otherwise might leave you with just SS to live on.

    • David

      I also agree and your math is correct. For every additional year you work your leaving social security benefits “on the table”. Add up that 8 years of money and you’d be surprised. I’d rather collect early then take it at 70 only to drop dead 4 years later.

      • Gene

        I am a mathematician. I have done the math. Yes the break even is around 80. As others have said, look at your health and the longevity in your family. In my case I cou,d live from 90-95. If I lived to 90 or 95, waiting to 70 easily beat out of pocket even taking into account what you have to spend of your own money. The other variable is do you have enough savings and/or pension to last to 70. Personally my gut says take it at least when I hit 66, but the numbers keep telling me to wait.

    • Syeda A.

      I am paying social security fr 2003 federal state city and what I am getting in return zero I see hard time every month what the social security did

    • MarcJ

      I agree with you totally. Not everyone lives until that magic age of 88/85. Who has all that money to carry you until you are 70? maybe some do, but I’m pretty sure not many! I would have to drain everything I have to maintain my standard of living for 8 years without collecting. Besides, I would like to do things now that I may not be able to do after 70 or 80!!

    • Michael

      Whether or not to wait until 70 to start taking your SS is a very individual decision. It is always a gamble because you first have to know when you are going to die to maximize the total amount of SS money you receive. I am 68 and still working so I don’t need the additional income right now. It makes sense for me to wait. I picked 85 to be my death year for planning purposes and my break-even age for SS is around 80-81. If you need the money now, take it….if you are reasonably healthy and don’t need the additional now, wait.

  5. Sue C.

    Yes, had planned on three sources: one, pension from company from which retired; two, social security (as long as Congress doesn’t interfere) and three, Roth IRA which got depleted due to market crash. Have replaced #3 with CD that eventually will be converted to annuity to increase monthly income if spouse expires before me. Of course, there will be life insurance that will help with final expenses.

    • Marc

      Companies abandoned pensions in favor of 401 (k)s over 30 years ago, so much for option #1. Social Security is being eliminated by Congress even as everyone sits here posting complaints and criticisms about it, so don’t count on option #2 to be there. As far as your Roth IRA being “depleted by the market crash,” well, that’s exactly what will happen if Social Security is privatized; the stock market is NOT SAFE. Why is it so difficult for people to see the connection?

      Option #3, the CD that converts into an annuity – yeah, good luck with that. Some are perfectly acceptable, most are scams. Hopefully you worked with a genuine financial advisor and not a broker who directed ypu into an annuity that generates the highest commission for himself and the biggest profit for his company while leaving you high and dry. Hopefully you read the fine print and had the whole thing reviewed by a competent attorney before forking over/tying up your life savings.

      As for the life insurance, well, hopefully they won’t find some trumped-up reason to deny the claim or, at best, delay payout. I honestly wish you the best.

      • AKA

        We see what you don’t like, any practical suggestions or are you just going to complain?

        • Marc

          Not complaints, stating facts easily discoverable. And you must have missed the “practical suggestions,” I gave, like checking into the credentials of investment brokers either selling annuities or handling your IRA, having an attorney review everything to explain all the details and make sure it’s legally sound so you won’t be swindled, and hopefully, keeping a close watch on the FACTS about what Congress is doing with Social Security, which can be found on Are THOSE “helpful suggestions” clear enough for you now?

  6. Shirley W.


    • MarcJ

      Your children are not there to help you if you mismanaged your life. Hopefully they have their own family to take care of, that is their responsibility. NOT to take care of you, and support you through your golden years!!!

  7. Shirley W.


  8. Alicia B.

    I am 68 yo and have $40000 in debt. On a fixed income Soc. Sec. and Pension. Around $3800 a month.I have a mortgage and the credit cards are getting paid but I am a hostage to them. Thank goodness for overdraft protection. Is a refinance the best way to go? Help, I am diabetic and cannot go back to work. Children are no help

    • Bob D.

      file chapter 7

  9. Free T.

    I would say the biggest mistake in planning for retirement is allowing our so called government to take 14% of our money and give back maybe 3% after several decades of inflation. And they do this by force with threats and weapons. Not a very neighborly thing to do. It is certainly not helping.

    • Marc

      Don’t worry, you won’t have much longer to worry about your government doing terrible things – like ensuring your ability to survive in you golden years – much longer. The GOP is passing literally dozens of bills every day that terminate every single service, resource, benefit, or protection the government has ever provided for the good of all of us average Americans, redirecting every dollar to the their corporate owners and the ultra-wealthy. Thanks to these willfully ignorant complainers who never bothered to learn anything about their government, like how it works, or the vital and useful services it provides us all, the equally ignorant buffoon they voted in to “drain the swamp” is rapidly turning America into quicksand, gleefully signing everything they put before him, and we’re all going down fast. Keep complaining; maybe you won’t notice as you’re circling the drain. You’ll be there about two seconds before me; I’ll be sure to wave as you go by.

      • AKA

        Your remark is total Liberal BS. And the shame of it all is a lot of people believe in that drivel.

        • steve

          if you cant see the truth your as mentally ill as trump is. I voted for trump and now i’m saying my god what have i done.And i’m a republican .Dark days are coming

        • Marc

          No, it’s factual information easily found on, where you can read the full text of the actual bills Congress is proposing, passing, and repealing every day. That website is one of those services I was referring to. You can also find the same information on the Federal Register site, which also contains all the history of every bill passed since Congress began, at every stage of those bills’ development. You can even sign up to receive this information daily via email so you don’t even have to look it up yourself – along with everything else our government does every day. You can choose what you’d like to track and receive email notifications and links to all of it.

          The only part of my comment that was opinion was the “buffoon” remark, and that’s an opinion shared by millions of Americans, “liberal” and conservative alike, who love this country and who have the common sense to know the difference between facts and uniformed “BS.” Speaking which, where can these nice readers find the facts behind the “statistics” you cited? Or was that YOUR right-wing opinion?

          • eric

            these lies are the drivel that got us here. figure out how wealthy you COULD be if g bush had been able to privatize it. the dems blocked it because wealthy people would start asking questions so they could hold on to their money. the dems HAVE to keep people poor so they can control them.

        • SSmith

          Read Paul Ryans Book–The Way Forward and get your head out of the sand

          • Marc

            PAUL RYAN??? Ann Rand worshiper; a man raised on Social Security survivor benefits, and government grants pay for his college, who is now the architect of the very plan designed to eradicate those very programs for the rest of us?

            I see now. You put forth one plutocrat’s selfish beliefs against over 200 years of Congressional work to build a country where everyone can live and thrive. I see now that I’m wasting my time providing facts. If you truly believe that one man’s personal political beliefs should replace over 200 years of documented Constitutional legislation, the actual original documentation of the birth and development the United States, then it’s you that needs to pull your head out.

            There’s no profit in arguing with irrationality. Take away this: you and those who choose to believe as you do have the demise of millions of your fellow Americans – and the demise of ths great country – on your heads. So be it.

      • Free T.

        I guess I do not see how stealing from neighbors and giving to other neighbors is a good thing? It has racked up Trillions in Debt. How can you demand that your government does things to your neighbor’s that would put you in jail? How does any of this make sense? What happened to “Liberty and Justice for All”?

      • Worried S.

        Thank you, so true.

      • Kim M.

        You are soooo right! Not liberal it literal!

      • Judy W.

        What ever happened to the increase Pres. Trump was giving?

    • Bob D.

      Many of us cannot save or the savings went for debts, unforeseen events, medical bills etc, most Americans will never be wealthy, because most of the wealth is in the hands of a few, we continue to live “The American Nightmare”, Suzy is a lot of hot air.

  10. Ronald r.

    Thanks for tips from former cbs

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