The 401(k) Decision People in Their 70s Regret the Most

When you retire, it seems like the moment has finally arrived. All of your planning and hard work over the past few decades has led you to this point. However, many people in their 70s end up struggling to manage their retirement funds. In many ways, it can be unnerving to stop working and live off of everything you've built.

Fortunately, with the right tools, planning, and mindset, people in their 70s can learn how to make a retirement plan that lasts. And, by understanding some of the regrets that people in their 70s have when it comes to their 401k, it can help later generations plan for their non-working years, too. Here are a few examples of the top regrets retirees in their 70s have.

Taking withdrawals without a plan

The biggest regret people in their 70s have about their 401(k)s is withdrawing money without a concrete plan. Sometimes retirees withdraw money to meet immediate needs rather than considering long-term projections.

Instead, retirees should consider working with a financial planner to choose an appropriate withdrawal rate. Ideally, finding a safe, consistent number to withdraw every month or every quarter can help retirees make their investments last longer.

Failing to live on a budget

For many people, retirement may be the first time that they're living on a fixed income. If that's the case, paying attention to the money coming in and out can go a long way toward making sure you don't exceed your means in retirement.

Even though a budget sounds restrictive, it's really a record of how much you spend each month. These records will be key in ensuring that your retirement funds last for your lifetime. A recent brief from the Center for Retirement Research at Boston College found that retirees spend 10% of their income on unexpected expenses.

So, make sure that you set up an emergency fund, know your monthly expenses, and live within your means, whatever they may be.

Treating all distributions as spending money

Many people view retirement as a time to withdraw 401(k) funds, but it can also be a time to continue investing in other accounts. Some people live into their 90s, and investing can go a long way over that time horizon.

So, some retirees regret treating all their distributions purely as spending money, rather than an opportunity to put aside a portion of it for investing in other assets, like real estate or a general brokerage account.

Underestimating how much retirement costs

Another regret that people have in their 70s is underestimating how much retirement costs. The Wall Street Journal reported in 2024 that one in eight retirees planned to return to work. That's because many people were unable to afford basic necessities due to rising costs.

Additionally, a Fidelity Investments' 2025 Retiree Health Care Cost Estimate found that retirees could spend over $170,000 just on health care costs during their retirement years. These types of expenses can erode retirement savings if you don't have a plan.

Disregarding tax strategies

Another mistake many retirees make in their 70s is failing to consider tax strategies. It's important to know how different retirement accounts affect your taxes. For example, retirees are typically able to withdraw from Roth accounts tax-free, but you'll usually be taxed for traditional 401(k) withdrawals at your ordinary income rate.

Understanding which accounts to withdraw from first and developing a tax strategy are important parts of having a financially sound retirement. Consult with a tax planning expert if you need advice.

Not adjusting withdrawals after market dips

People who are just starting their working years have a much longer time horizon than those in their 70s. For that reason, market dips might not negatively affect younger generations.

However, when market dips happen during your retirement years, retirees might consider adjusting their withdrawals and living off less for a period of time. Retirees who don't do this after market dips might use their savings faster than intended.

Assuming expenses will decline with age

Many people believe they will spend less in retirement, especially if they plan to have their mortgages paid off and their kids out of the house. However, assuming expenses will decline with age is another regret many people in their 70s have.

With health care costs, long term care needs, and sometimes helping adult children and grandchildren with expenses, many retirees find they spend more than they expected during their non-working years, not less.

Bottom line

If you want to retire comfortably in your 70s, it's important to be aware of some of the regrets many retirees have. The biggest regrets people have tend to be about how they handle withdrawals and day-to-day living expenses. However, by monitoring your expenses and not living beyond your means, it's possible to enjoy your retirement years more knowing you have a plan.

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